Hi James, Todd Harrison who is the head trader at the hedge fund Cramer Berkowitz, did a really tremendous
job of illustrating how important the SOX, BKX, and XBD indexes are for indicators just about every day. He was
doing this late in 2000 and then during the first half of 2001.
Art Cashin and especially Steve Shobin used to and I'm sure still do talk about them in their daily briefings.
I've looked at these periodically, in prior years, but I've found it really pays off to watch them all of the time.
speaking of brokerages... a bit of pre open news... If the brokers don't sell off much and trade like there are not
many sellers on the GS downgrades and Q4 eps cuts, then it will show us some underlying strength in this
sector and it could be extrapolated to the overall market. :
:
Brokerages : -- Before Open - Reacting to the financial services group strong performance in recent weeks, brokerage firms cut/raise estimates and downgrade stocks in the sector. Goldman Sachs downgrades MWD to MARKET PERFORM from Recommended List on MWD's 60% share appreciation off their 9/20 low (see today's In-Play coverage); Goldman Sachs also cuts Q4 estimates on C, MER, JPM, and LEH on valuation concerns; brokers now trade at a slight premium to the 5-yr average on "lackluster fundamentals;" recommends C as a defensive play and MER as they believe cost initiatives will provide upside to earnings. Morgan Stanley assigns a new rating to JPM on a change in analyst coverage; the stock is now rated NEUTRAL, revised from Outperform, and cuts 2001-2 EPS estimates. Morgan Stanley has near-term concerns about credit, private equity, and JPM's exposure to ENE's difficulties; Morgan is bullish in the longer term, although they don't foresee an inflection point until H2 2002. CSFB adjusts their Q4 2001 estimates for their brokerage coverage universe up (except LEH which is adjusted down modestly) on some unusual upswing factors: higher percentage of compensation in non-cash instruments and ENE write-offs. In general, CSFB sees further downside risk on their expectations of mid-to-low teens returns in 2002; top pick is C with a Strong-Buy rating and price target in the mid-50s and expects company to yield 20+% returns next year. |
