Wed 12/28/11 4:00 PM – It’s a Risk-Off Day Today

Stocks are down 1% – 2% today in the US and Europe. Bond prices are higher and the US dollar is up sharply. Gold and oil are down at least 2%. The higher dollar and lower stock prices are in spite of short-term sovereign debt auctions in Italy and Spain that went much better than expected, with yields falling dramatically.

Today is the first day of the year that stock trades will settle in 2012 and along with the holidays, that is probably reducing demand for stocks. It won’t surprise me at all if Thursday and Friday trade the same way or are flat.

Payrolls are due out tomorrow and Friday and that may move the market a little higher if the payroll #s continue to be improving.

I will probably post some thoughts next week on what to expect for 2012. I expect similar volatility to 2011. Let’s put it this way – stock performance worldwide will depend a great deal on how things go for Italy and Spain and China.

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