Today's prudentbear -->
Pause To Refresh?
Asia was mixed last night as Japan fell a percent, and Hong Kong rose
a percent. Europe was up a percent this morning, and the US futures
were up slightly. We had a little selloff at the open, but it didn’t last
long before the buyers rushed in to send us to new highs for the day.
Then we sold off again and so on and so forth as we oscillated back
and forth in a slow chop to end near our lows. Volume was chunky (1.3
bil on the NYSE and 2.3 bil on the NASDAQ.) Breadth was slightly
negative on the NYSE and slightly positive on the NASDAQ. Big
winners were in the banks as the BKX rose 2 percent. Big losers were
in the golds as the HUI lost 6 percent.
CHRT, the #3 semi foundry in the world, warned last night but
maintained a hopeful view that things would rebound in the second
half. CHRT ended down a whopping 2 percent on that news as
investors yawned. Semis were a little weaker on the back of that with
MU being a standout 4 percent slider as DRAMs traded at new lows
again last night. The SOX slipped 2 percent, otherwise known as a
hiccup. Tonight we get the N.A. semi equipment book-to-bill ratio for
April. It'll be a stinker. The question is will anybody care? Elsewhere,
it was pretty mixed. Unlike yesterday, there weren’t any big movers to
the upside. There weren’t any huge losers for that matter either. It
was a pretty range bound day for the most part, which probably
continues to favor the bullish view for the moment although we’re
certainly getting very overbought. Financials were stronger on the
day again. The BKX rose 2 percent to a new high for the move, while
the XBD only rose a hair and ended near the low of the day after
trading higher this morning to a new high for the move. GE slipped a
percent. FRE and FNM both bounced 2 percent. Credit cards were
generally higher by a couple percent with many nearing new highs.
Retailers were mostly quiet as the RLX was flat. Dow cyclical-type
names like AA, MMM, UTX, etc that have had big runs were sold pretty
hard today and accounted for most of the loss in the Dow.
Oil fell 26 cents on the July contract to end at $30, and gasoline edged
slightly higher to another new high. The XOI fell a percent, and the
OSX fell 2 percent. Gold fell 30 cents to $285.50 and continues to “act
well” on the pullback. Lease rates continue to hover around 2
percent. The HUI slipped 6 percent. The US dollar index rose a
percent and above its 2001 high as it appears Uncle Al’s rapid
reduction in interest rates and the faltering US economy do not seem
to bother anybody one bit, at least in terms of the euro. While the
dollar has weakened against most other major currencies, the euro
continues to languish and hold the dollar index up. The Europeans
got the flipside of our perpetual motion machine as the zero took out
its 2001 lows and slumped to 86 cents ahead of tomorrow’s ECB
meeting. Treasuries were a little weaker on the day.
Tomorrow, we get the ECB meeting, and it’ll be interesting to see what
they do, if anything, in response to the renewed collapse in their
currency. If the euro doesn’t turn higher soon, it may have a major
breakdown, as strange as that sounds given what is going on in the
real world . It should be noted that gold broke out to a new
post-Washington Agreement high in euros last Friday. Despite today’s
pause to refresh, stocks continue to hold up rather well in the face of
deteriorating fundamentals as we continue to reside in
“nothing-matters-land” where everyone continues to delude
themselves into thinking that the second half will get better thanks to
Uncle Al’s printing press. We’ll just have to keep watching for signs
that the herd is waking up from their dream because the alarm clock
will indeed go off at some point. |
