Yesterday's prudentbear which I forgot to post -->
Market Summary June 21, 2001
Posted Daily Between 5 and 6:30 PM EST
by Lance Lewis
All Aboard For The Pre-FOMC Bounce?
Asia was about 2 percent higher last night. Europe was flat, and the US futures were a touch higher. We opened flat and danced around for a bit before a steady grind higher took over that last the remainder of the day. We had a bit of a selloff in the last hour but still ended near the highs. Volume was very chunky (1.5 bil on the NYSE and 2.1 bil on the NASDAQ.) Breadth was slightly positive on both exchanges. The big sector winner was the banks as the BKX rose 3 percent. The big loser was the oil services as the OSX fell 4 percent.
Contract manufacturer SANM warned last night, which gives us almost a clean sweep of warnings in the big contract-manufacturing guys. SANM actually rallied 5 percent as I guess everybody figured the news had been discounted with the other warnings out of JBL and SLR, etc. We also had warnings out of chipmakers MCRL and TMTA. MCRL fell 9 percent, and TMTA was wasted for 57 percent. That news had the semis lower early on, but the broad market rally put a bid under the chips that hadn’t actually warned as the day wore on. By the end of the day, the SOX had cut its loss to just a touch. The rest of tech was mixed. There was a bid in the Internuts once again for some unknown reason. I suppose some guessers think the charts look like they’re going to bounce or something? The networking shares also had a bid after CSCO reaffirmed revenue guidance. The pattern of the last few days continues to be if you spit up bad news, you get punished but you have to actually come out and say something. Nobody seems to want to make any leaps of logic between companies and industries. Financials were smoking to the upside as everybody gets all lathered up for their 50 bp cut next week. The BKX rose 4 percent, and the XBD rose 3 percent. GE rose a percent, but slid considerably from its earlier highs this morning. Credit cards also had a good day as most rose around 2 percent. The utilities were pasted yet again for another 3 percent loss and another new low for the move.
Oil rose 8 cents. The XOI fell a percent, and the OSX fell 4 percent. Gold rose 20 cents. Lease rates slipped a touch again, and the HUI fell another 2 percent. The US dollar index slipped back to the 119-level after US manufacturers again whined about the strong dollar. The euro rose a touch after the ECB left rates unchanged. Treasuries were a little higher again.
Tonight, we hear from the boys in Boise (MU) and find out what DRAM inventory has ballooned to. We also get the North American Semi Equipment book-to-bill ratio. The fact that the VIX was smoked today for almost 2 points and almost took out its lows is not a good sign for those betting that the current 2 day bounce will continue all the way into the FOMC next week. In fact, that along with the pick-up in volume today could be a sign that we actually saw the peak of the usual pre-FOMC rally today. So maybe this is all we get? It doesn’t really matter. Either before or after the FOMC, this market is going to break badly. The weight of reality is just getting too heavy for the hopers to lug around I think. |
