Top Line: The stock market tried to come back Thursday and did manage to put in an up day. There is some weakness overnight (again?) which could spill over into Friday's trading.
The stock market has had some difficulty over the past few weeks and the main stated reason from the media is the "bank stress tests". Traders are worried that these tests may show that a bank or two might have some trouble. There's a shocker. We would say, it's a classic sell on the rumor and buy on the news but we'll wait for confirmation.
The headlines didn't read too well today with existing homes down 3%, Chrysler possibly headed into bankruptcy, the Fed's losses on its Bear Stearns adventure last year (Maiden Lane), all on top of the uncertainty surrounding the stress tests. After hours the news on earnings was from Microsoft (MSFT) and Amazon (AMZN). MSFT's results were down but about what was expected and the stock rose 3% in afterhours trading while AMZN managed to beat expectations and rallied, too.
Still, in overnight trading, the US futures are down even with MSFT and AMZN being up. The stress tests are getting a lot of attention this evening due to the headlines that say, "Bank Stress Tests Will Enter Critical Phase on Friday".
Meanwhile, gold decided to pick up its head today and get back over $900. That had some positive influence on GDX but it didn't hold up very well going into the close. This evening gold is up some more. The $900 level seems important to the gold market so we will watch to see if it falls below it again. It may not.
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