Second quarter of 2010 ends with a flurry

The second quarter of 2010 ended today. I noticed there was a lot of trading going on, especially in less-than-liquid issues that tended to trade down. I am guessing there were some liquidations that were part of some window dressing and/or automatic buying/selling for indexing purposes.

In terms of the broader markets, the S&P 500 was down 12.2% for the quarter. The TSX composite was down 6.2%. Spot oil was down 10.0%.

Perhaps the most important broad market financial measure was the 10-year US treasury bond, down from 3.85% at the beginning of the quarter to 2.95% – the market has made a significant deflationary bet over the past three months. The Canadian 10-year bond was down from 3.56% to 3.09% (June 29th data). This decrease in long term interest rates has very interesting implications – banks are parking cash in bonds rather than lending it out.