By MattMcCall on
8/30/2007 5:38 PM
If you are reading this update it suggests you decided to not jump into the minivan and beat the traffic to the beach this weekend and are sticking around for what will likely be a volatile day on Wall Street tomorrow. Or you are the “lucky” one that gets to host the in-laws this year for the unofficial end of summer – Labor Day.
THE FED LOOMS
I for one am hanging around to see what the market has to offer on a Friday before a holiday that is filled with several potential plotlines. For starters, any time Ben Bernanke steps to the podium there is a high probability the market will move. Tomorrow the Fed Chairman will be speaking at a conference in Jackson Hole, WY and will address the current housing and financing issues.
It can be said that the Fed was responsible for both big days this week; down 280 points on Tuesday and up 250 points on Wednesday. Heading into Friday the Dow is off 140 points or 1% for the week. On Tuesday the Fed minut ...
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By MattMcCall on
8/23/2007 4:39 PM
Small losses for the Dow and S&P 500 as the indices close the day where they began. The tech-heavy NASDAQ did not fare as well and lost 4/10th of a percent today with an 11 point loss to 2541. The down day on the NASDAQ broke a four-session winning streak dating back to last Friday.
The small-cap indices had a rough day with the Russell 2000 losing 1.3% and the S&P 600 Small-Cap index tumbling 1.2%. Both indices had entered the day without a losing session since last Wednesday and had rallied since bottoming with everything else last Thursday. They have been the leaders on the upside and downside recently, so does this spell trouble for the overall markets?
Technically the S&P 500 held the 200-day moving average for the second straight day – a positive signal. On the other hand the Dow failed to close above significant res ...
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By MattMcCall on
8/17/2007 5:22 PM
An alert was issued this morning informing investors of the 50 basis point cut in the discount rate from 6.25% to 5.75%. Not only did this give the market a short-term shot today, but it also opens the door for a possible cut of the federal funds rate in the near future.
Last week the fed began to fight the credit issue by pumping liquidity into the market a few billion dollars at a time. When they realized that was not effective they decide to bring in the reinforcements and cut the discount rate today. IF today’s move proves not to be enough the next choice for the Fed will be to bring in the heavy arsenal – a federal funds rate cut before the September meeting.
My opinion is that the crisis will not come to the point where the Fed has to resort to a rate cut before the September meeting, however there are a few wild cards that could prove me wr ...
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By MattMcCall on
8/15/2007 4:39 PM
RANT OF THE MONTH!
Today’s action accentuated a few things for me. First of all, institutional buyers are not yet willing to make large bets on stocks. This is evident by the 5-day losing streak on the Dow, the longest such streak since March. During the selling, the index closed at or near its low on four occasions. Nobody and I mean nobody is willing to buy weakness into the closing bell in fears of what may happen when they are sleeping.
The second issue that was reiterated was the fact we are in a panic-driven market. Take the fundamentals and economics and threw them out the window. A company could be grow a great growth story with undervalued fundamentals and in a sector that is worlds away from the credit crunch, BUT IT DOES NOT MATTER!
This type of frenzy occurs duri ...
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By MattMcCall on
8/14/2007 5:10 PM
The song remains the same as the bears are dancing in the street. And no, it is not the Bull Dance.
The S&P 500 led the major indices lower today with a loss of 1.8% or 26 points to close at the lowest level since 4/2/07. For the year the broad based index is now up less than 1%. The NASDAQ tumbled 1.7% or 43 points to directly on its 200-day moving average. The tech-heavy index has been able to trade above the long-term trend indicator since last September and therefore a breach would be significant. The Dow fared the best, but still lost 1.6% or 207 points to close at 13.028, the worst close since late April. The small-cap stocks suffered bigger losses with the Russell 2000 off 2.2% on the session and down over 3% on the year.
Technically the market has continued to weaken on the concern more credit problems will arise. That being said, ...
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