Putting Friday's rally in perspective
Excerpts from INVESTECH hotline: Saturday, May 6th 2000
"If there's any surprise to Friday's rally-response to the unfavorable employment report, it should be that
the rally wasn't stronger. The Nasdaq closed up only 96pts. As we said on Wednesday's special update,
3 of the last 4 Unemployment reports have seen the Nasdaq rally over 150pts. We can only guess the
reason for this coincidence - but just imagine if Wall Street firms dumped "buy" programs on the market
AFTER the Unemployment news hit. Of course, it would trigger a short-term rally ... opposite of what
everyone expects, but boosting confidence ... and then public psychology would take over. Of course,
that's just speculation ... Still, it's interesting that the Nasdaq rallied 178pts on LAST month's
unemployment numbers ... then, in the next week, fell 1,125pts.
Key developments this past week:
1) ... Friday's unemployment report ... stronger ... than expected. IF the stock market isn't plummeting by
the 16th, we expect a full 1/2%pt hike from the Federal Reserve.
2) 30-yr T-bond yield jumped almost a full 1/4% pt ... Another 1/4%pt, and we think the DJIA will be slicing
through 10,000 in short order.
3) Bellwethers ... already rolling over ... Both Advance-Decline Lines are within one big down-day of hitting
new lows.
... liked ... Franco Nevada's quarterly earnings report this week ... consider the stock a bargain. |
