The bad news is that the large price swings in stocks continue, with the Dow gapping up at the open, moving in a 300 point trading range with ease.
But the good news is that stocks — and traders — are a lot calmer, despite the price swings.
And there's one reason for the markets slow move up today: credit markets are improving. Stock traders are noting that Libor rates continue to decline across all maturities — and in case you're wondering, stock traders have not normally paid attention to Libor, except in the last few weeks.
For example, 3-month dollar-denominated Libor rates have dropped to 4.06 percent, down from 4.8 percent a couple weeks ago, and traders feel it will drop below 4 percent by tomorrow.
How much calmer are the markets? Traders have begun noting the slow emergence of leadership: For the past several days, defensive names like utilities, telecom, and healthcare have outperformed, but today we saw energy come roaring back on a gutsy call from Oppenheimer to BUY OIL AND GAS STOCKS.
Financials are lagging, but that is not agitating anyone.
This is only the third day in the month of October the Dow and the S&P have closed up.
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