How Long Will This January Effect Continue?

  • January 9, 2003
  • Vincent Mao

Better-than-expected
results from tech (
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contributing to the rally in stocks was a better-than-expected initial jobless
claims report which showed that applications dropped by 19,000 to 389,000.
Economists were expecting 392,000. This was also the second week in three that
initial jobless claims fell below the 400,000 key level. This is potential
evidence that the layoffs are starting to slow. Tomorrow’s unemployment rate
report will be a key factor to whether this rally will continue. The
unemployment rate is estimated to be near its eight-year high of 6%. The March
S&Ps
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Nasdaq 100 finished up 32 at 1077.

The dollar also benefited from
today’s weekly jobless claim report. After falling to a three-year low
yesterday, the dollar strengthened against both the euro and the yen today.
However, the dollar is still vulnerable in the near term amid the tensions of
war with Iraq. The March dollar index gained
0.04 at 102.29 . 

Crude oil bounced back after selling
off for the last three sessions. February crude once again found support near
the 38.2% retracement or the $30 level. February crude
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Treasuries could not make it to three
in a row today. The better-than-expected initial jobless claims report suggested
to investors that the economic is rebounding and thus are buying the better
yielding corporate bonds. The March 30-year contract
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contract fell 24/32 to 112 19/32.

With the rally in stocks, gold prices
slipped today. February gold
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fell 0.50 to 353.70.