UP & DOWN WALL STREET

The market dropped more than 1% on Thursday hit by news of a Malaysian Airlines flight being blown out of the sky and the invasion of Gaza by Israel, in response to never ending rocket attacks on Israel by the Palestinians. However, by Friday, the scare seemed to be over as the market recovered most of its losses.

Janet Yellen, in Fed testimony, said that market valuations were not that far above historical averages but that “valuation metrics in some sectors do appears substantially stretched – particularly those for smaller firms in the social-media and biotechnology industries.”

A Fed report also noted that yield spreads on high-yield corporates and leveraged loans were very slim by historical standards. In recent weeks, HYG and HYS have seen pullbacks.

Doug Ramsey of the Leuthold Group says that smart money has been buying puts on the OEX.

Global bond yields are extremely low and the 10-year German bunds hit a record low yield of 1.13% on the 10-year. The 10-year treasury is under 2.5% and the 30 year is at 3.3%.