Financials lead the way, and Gold margin requirements increase ($GLD)

  • US Equities advanced after two economic reports showed orders for long lasting goods spiked to a four month high, while home prices rose in June by the most since 2005.
  • Subsequently, the bellwether indices gained huge traction out of the opening gate, while Treasuries were sold led by longer dated issues as interest rate expectations rebounded, albeit towards still near record low levels.
  • Gold dropped the most in three years as investors sold precious metals amid the recovery in risk sentiment and CME raising the margin requirements of a futures contact by 27%, while the Dollar bounced on economic growth prospects. Volumes were fairly light overall.
  • Financials were the session leader after the Money Centre Banks – Bank of America ($6.99, +11.0%), Citigroup ($28.45, +4.1%), JPMorgan Chase ($35.83, +3.0%), Wells Fargo ($24.43, +2.1%) – spiked on bullish analyst commentary after tumbling towards multi-year lows.
  • Investment Services – Credit Suisse ($27.68, +1.5%), Deutsche Bank ($39.58, +1.1%), Goldman Sachs ($110.31, +3.2%), Morgan Stanley ($16.33, +3.6%) – were also bid amid supportive valuations. “Many banks are selling below their liquidation values, let alone their franchise values,” a leading analyst wrote in a note.
  • Dow Jones +1.29% S&P500 +1.31% NASDAQ +.088%
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