Today's prudentbear --> (I'm not a BLIND bull he he)
Market Summary July 11, 2001
Posted Daily Between 5 and 6:30 PM EST
by Lance Lewis
Indexes Bounce Again, Market Doesn’t
Asia was lower last again last night as Japan fell 2 percent to go
out right at the key 12000 level. Europe was down a percent this
morning with the FTSE falling back just shy of its April low, and
the US futures were a little higher. We opened flat, traded up,
and then tanked to new lows for the day. When we didn’t
collapse in a heap of selling, buyers decided to come in and
walk us back up to the highs of the day. The last couple hours
were spent sliding back down from that high to end in the middle
of day’s range. Volume was beefy (1.4 bil on the NYSE and 1.7
bil on the NASDAQ.) Breadth was slightly negative on both
exchanges. So, while the indexes managed to bounce today,
the broader market did not. The big sector winner of the day
was the golds as the HUI rose 3 percent. The big loser was the
Internets as the INX lost 4 percent.
Last night CPQ preannounced that they were “meeting
estimates,” which isn’t exactly true since they missed their
revenue number. But, nobody seemed to care for now, as CPQ
bounced 5 percent. EMR, which makes electrical products,
warned this morning, marking the first time in 43 years that they
have had a drop in earnings. EMR said, “This is a customer
demand issue of unprecedented magnitude.” On that news, the
stock was busted for 14 percent. We also got a warning out of
CMVT. CMVT said, “the capital spending recession and
macro-economic slowdown appears to have spread throughout
the developed world, and conditions have continued to
deteriorate.” CMVT was trashed on that news for 34 percent.
With all that out, things were pretty mixed. It looked like that if
you were a large cap tech stock and a big weighting in the
indexes (like MSFT and IBM) you seemed to get bought.
Otherwise, you tended to slide or just go nowhere. IBM,
incidentally, announced some more layoffs in their PC business
after cutting some people loose in their services business last
week. Semis bounced a little with the SOX rallying 3 percent
ahead of MOT’s earnings tonight. And, Internets were a little
weaker ahead of YHOO’s earnings tonight. Financials were
heavy again. The BKX fell a hair, and the XBD fell 2 percent as
the brokers continue to act like very sick little children. MER in
particular, which is always a pretty good barometer of the
general market, closed down another 4 percent today just shy of
its March/April low. A breach of that low would not be a good
sign for the stock market. GE slipped 3 percent ahead of its
earnings in the morning.
Oil slipped 38 cents. The XOI and OSX both fell a percent to new
lows for the move. Gold rose $2.10 after the BOE auction was a
healthy 4.1x oversubscribed. Lease rates were quiet. The HUI
rose 3 percent, and it appears we may begin a nice little rally in
gold and its shares after correcting for about a month and a half.
The US dollar index slipped again, but managed to bounce
intraday off the key 118-level. The euro rallied just shy of the
86-cent level. Treasuries were lower in the long end. Normally
when we’re having international worries (currently, the much
talked about fret is Argentina defaulting on their debt as well as
South American markets that have been crashing recently),
you’d see treasuries and the bond rally. But, we didn’t see that
today. Instead, we saw a rally in gold. It may well be that we are
seeing the early signs of a “changing of the guard.” We’ll have
to see if that trend continues or if it was just a one-day wonder.
Tonight we get earnings from MOT, YHOO, and AEIS. Then the
big boy (GE) spits up its numbers in the morning. Today’s
bounce in the indexes looked like the one to two day rally we
discussed yesterday as a good possibility at any time down in
this area. Now, if this rally fails shortly, like I expect, then the
next move down will be mammoth. If not, then we may have to
wait for the fall when the Q4 hopers throw in the towel too. We’ll
find out soon enough. |
