Crude oil jumped to a hair over $73/barrel this morning, due to a weakening U.S. dollar and attacks on oil installations in Nigeria. Despite this surge, the United States Oil Fund (USO) was down nearly 1.5% in morning trading.
It appears that fund managers seem to think that an economic recovery is on the near horizon as investor equity holdings rise to the highest level they have been at all year. Based on a survey of 12 U.S.-based fund management firms, 62.5% of their assets are in equities, up from 61.6% the prior month. Equities have started to become more appealing because of an increase in money supply, stabilizing unemployment claims, a bit of life in the housing markets, narrowing credit spreads and rising durable goods orders.
Overall, all three major U.S. indexes are down in morning trading with the Dow Jones Industrial Average leading the way posting a decline of nearly 1.1%, followed by the S&P 500 down about 1% and the Nasdaq dropping 0.5%.
Kevin Grewal contributed to this article.