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Doug Kass
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| Riding the Upgrades on BAC |
6/11/2009 7:02 AM EDT
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Morgan Stanley raises Bank of America (BAC) estimates and Keefe Bruyette upgrades the stock to outperform.
Position: Long BAC
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Tom Graff
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| Watch Out with Municipals |
6/11/2009 7:59 AM EDT
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A couple days ago I mentioned that 10-year munis were only 79% of Treasury yields, about as low as at any time in the last 10 years.The last few days has seen munis sell off sharply in a sort of delayed reaction to what's been going on with Treasuries.
A warning, though: Most brokers don't actually hedge their muni inventory. Rather, they just try to sell their bonds at yesterday's prices in hopes of picking off some unsuspecting buyer. Don't be that buyer. Wait for general interest rates to level off before adding to positions.Same goes for muni mutual funds. They are priced at NAV based on pricing models, which are notorious for lagging in a fast-moving market. Long-term munis are probably overvalued by the pricing servies by 4-5 points right now.It might happen that Treasury bonds bounce off oversold levels and thus muni prices don't actually "correct" by that 4-5 points. But still, I'd rather add to positions after that happens than before.
Position: None.
The dollar remained under pressure overnight against dollar block currencies, the British pound sterling (GBP) and the Norwegian krone (NOK) with underlying positive sentiment for these currencies. Today's U.S. retail sales (expected at 8:30 EST -- advanced sales are expected up 0.5% while ex-autos are expected up 0.2) and jobs data (expected at 8:30 EST to be 613,000) are likely to see the currencies give up gains providing a new buying opportunity. Markets continue to keep an eye on a possible shift away from quantitative easing, but the U.S. dollar Libor/OIS spread tightened today. Global sovereign bond markets are generally weaker with yield curves flattening as the shorter end sells off.
Position: None.
Jobless claims and retail sales came in about as expected. No big surprises, and the market did not react. ... We have a pretty good pattern of early selling and later-day buying which repeated yesterday. ... I was not expecting much predictability, but we found some very good trades such as American Axle (AXL) jumping on a CNBC mention from $4 to $4.95. ... I am going to look for the same thing as yesterday, some early chop but a nice downdraft from the open then look for recovery later. ... Apple (AAPL) is looking weak again and should drop 2 bucks from the open. ... Human Genome Sciences (HGSI) has some so-so news, positive results in phase II concerning lupus. I will be interested around $3 to $3.50 possibly...
Position: NM
How can this professor still be quoted on oil and on the dollar? What does he do, issue releases? Tell hedge funds first? Why is his every move news?
Position: none
956.25 = 96.10
950 = 95.50
948.50 = 95.35
945 = 95
942.50 = 94.73
937.50 = 94.25
935 = 94
928 = 93.25
923.50 = 92.80
Position: Short SPY
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Bob Byrne
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| Morning Trade |
6/11/2009 9:17 AM EDT
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The only thing yesterday's action did was scare a few bulls and annoy a few bears. The two levels I continue to watch the most are 945 and 937.50. Traders who are afraid of missing the next breakout begin to buy stock above 945 only to turn around and puke it back out when we hesitate near 950. As we breach the 937.50 area (our halfway mark of the current range), shorts become giddy and start hitting bids ... then they too give up as we approach the lower end of the range (923.50-928). So unless you enjoy living in a blender, wait for the eventual breakout ... up or down.
These late-day squeezes have now become too obvious. It's too easy for the bears to sidestep them and the bulls to take a breather. ... I suspect these ramps will end shortly with either a "real" breakup or breakdown. If you want to be aggressive on the long side, watch for a close above 942.50 rather than 950 (June contract). Our current high close has been 942.50, so a close above this may be enough to get traders buying.
As long as the bulls keep us above strong support at 937.50, they can work their way back up to strong resistance at 945. A level this closely watched tends to produce fake breaks and choppy trading. A more conservative approach on a break of this area would be to buy a retracement and just accept that if we break out and run straight up, you are going to miss out. Above 945, and it's on to moderate resistance at 948.50 and strong resistance at 950 and 956.25.
The bears gain traction with a sustained trade under 937.50 and should have little trouble pushing us to (and through) moderate support at 935 and 931.50. Yesterday's rebound occurred around the 928 area, and if I had a description between moderate and strong I would apply it here. A break of 928 may cause a quick flush pushing us to strong support at 923.50, but it will take a daily close under this area to convince traders to change their stripes.
Position: none
Talking book, but you are not going to keep Qualcomm (QCOM) down over the next few days.
Position: qcom
Lazlo Birinyi on ETFs on CNBC, about the hazards of the ultras. I think you can get all of this from Oberg, Furber and Dion. We have pioneered this work. I like Birinyi very much, and he has had a lot of great calls...
Position: none
I am turning increasingly bullish on large-cap financials and REITs and increasingly bearish on oil. My thoughts are related not just to fundamentals but also to how the markets are acting.
The wall of worry and frequent fits and starts and corrections taking place in large-cap financials and REITs looks like bull market behavior to me. The lack of any profit-taking, enthusiasm and overextension in the oil market seem to have all the elements of short-term speculation rather than a bull market.
Also, I do not think we can have $100 or even $80 oil and a lasting bull market or an economic recovery because of the negative impact on long-term bond yields and the effective tax on an already damaged consumer. I could see oil heading back to $60 very soon, and that would be very good for the economy.
Position: none
Amazed that Goldman raises Regions Financial (RF) and Fifth Third (FITB) to buy. They say they are cautious on regionals, but those are down and dirty buys. ... The upgrades of BB&T (BBT) and Huntington Bancshares (HBAN) to neutral from sell are easier to swallow...
Position: none
Here a second to Captain Cramer's remarks on Ultra ETFs. These things are toxic. Not only do they place two times and three times leverage in the hands of anyone who wants it, without review or approval of compliance and management as in futures and options, they can cause indiscriminate buying and selling in the direction the ETF is mimicking. It is bad enough that ETFs are 30% of all trading activity right now, but to lever those sector or market bets is criminal.
A properly functioning stock market allows investors to invest in corporations and participate in rising earnings, growing assets and dividends. Speculators play a role, providing liquidity and sometimes the volatility to help markets function. However, speculators should be a subset of the marketplace, not the majority. When we lose all the long-term investors in individual common stocks, as we seem to be doing, markets no longer function properly. It is just a casino at that point.
Position: none
I have to say that Tom's comment regarding munis and pricing practices in that market is one of those almost offhand gems that makes this site great.
Position: None
Chris, the marginal barrel of crude oil demand is set outside of the U.S. The replacement cost for the marginal barrel of supply is set outside of the U.S., too. In the short term, it is set by OPEC in the form of withheld production. In the long term, it is set by the diminishing return on investment upstream.
The market-clearing price where the two intersect will not be established by the behavior of the American consumer. Our pain will not be felt.
In addition, there has been one and only one period since 1983 when the correlation of returns between crude oil and U.S. equities has been consistently negative, and that was between the end of August 2007 and June 2008. Much of that can be attributed to the macro shock imposed by the unraveling housing market. Prior to that, the U.S. had been able to absorb higher crude oil costs as the marginal unit of economic output exceeded the marginal cost of crude oil.
If and when pressure on the consumer returns, it will come more from financial market conditions than from higher crude oil costs.
Position: None
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Alan Farley
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| Speculator vs. Long-Term Investor |
6/11/2009 10:41 AM EDT
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The majority of stocks are lower now than they were eight, nine, 10 years ago, even after adding in dividends.
Wall Street has always been a casino. The big lie has been the "suits" telling the public otherwise. The nature of boom-bust cycles make the classic investment "model" unrealistic, at least for equities.
Position: nm
Howard, I don't disagree with anything you said about the marginal barrel pricing and historical correlations. However, I think historical correlations work until they don't work, and the U.S. consumer is still very important to economic activity in the rest of the world. Also, I think the consumer is in a lot more trouble today than at any time in the last 30 years. Further, part of my point related to just how the oil market is acting. It is very frothy, and that is usually a sign of heavy speculative activity in any market.
Position: none
Many stocks that are perceived to have "disappointed" people, such as Hewlett-Packard (HPQ) and Monsanto (MON) are realling soaring here. Meanwhile ones that surprised to the upside, such as Home Depot (HD) and Qualcomm (QCOM), are soggy. I think its a bad judgment by the market, but the market is rarely wrong.
Position: HPQ, QCOM, HD
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Geoff Johnson
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| Oil Price Shock May Be So 2004 |
6/11/2009 11:15 AM EDT
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I think oil anywhere up to around $90 will cause only a short-term shock to the system as households re-readjust to higher pump prices, etc. Back in 2004, when oil made its first burst higher during that recovery, retail and restaurant sales had a material hiccup, and it contributed to a rather unpleasant late spring/summer for the market (and my portfolio). However, the consumer readjusted and moved on.
Revisiting $90 oil will mean, no doubt, that some dinners at Cheesecake Factory (CAKE) will not be consumed and some tres sexy jeans from True Religion (TRLG) won't be bought. I noted recently that I was all but out of my retail (and since have moved out completely). Given that oil-price reflation could drive some level of negative retail surprises, I'm not rushing to buy back. However, I hope I get the chance to do so. (Of course, if oil slumps from here, maybe I'll get no chance at all.)
One positive in this picture is natural gas. Usually it is up with oil. If it remains in a bear market, then rising costs for those who depend on it for cooling/heating/industrial will not face added costs.
Position: none
Chris, do they still sell cans of "Olde Frothingslosh, the pale stale ale with the foam on the bottom" on the East Coast?
I will disagree on the characterization of the crude oil market as frothy. Key spreads such as the sweet-sour, Gulf Coast 3-2-1 crack and Brent-WTI have remained very stable during this rally, indicating a lack of imbalance and an absence of internal stress.
Technically, a market moving in a steady and confined channel is reflective of rising underlying economic value. That value is being pulled higher globally as the short-term income elasticity of demand is overwhelming the short-term price elasticity of demand.
If we start to see the term structure move away from its present carry or implied volatilities start to rise sharply, I'll shift my opinion on whether we're stretching this market.
Position: None
I agree with your characterization of the crude market. I don't see the crazy speculation that some see at this time. That doesn't mean that I think crude will keep going up or should go up, and indeed, maybe the next move is $10 down. Trading commodities and the stocks tied to them is a constant series of roller-coaster moves, even within the big long-term trends, and so far this feels like that to me.
With that said, fundamentals still matter for me. For oil to continue upward and be justified in my view, I want inventories to begin to show continued progress to the downside.
Position: none
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Geoff Johnson
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| Credit-Related Names Working Well in My Portfolio |
6/11/2009 11:28 AM EDT
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I like the stable and upwardly biased action of the banks, insurance and biz dev companies in my portfolio. Many, though not all of them, have been chosen for the low-quality portfolios they own, and they seem to be doing well. Makes me feel better about the market as a whole.
Position: none
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Marc Chandler
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| Déjà Vu: The IMF Adjusts Global Growth Forecast |
6/11/2009 11:41 AM EDT
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The IMF has yet again adjusted a growth forecast, raising projected global growth in 2010 to 2.4%, from the 1.9% figure in March. Excessive adjustments of a notoriously difficult to predict figure may lead to loss of clout and gravitas.
The 2009 figure was adjusted four times from 3.0% to 2.2% to 0.5%, then finally to 1.3%. While the IMF has played a major positive role in throughout the crisis, don't be surprised to see more forecast revisions later this year.
Position: None.
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Tim Melvin
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| Huntington Buying |
6/11/2009 12:01 PM EDT
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Huntington Bancshares (HBAN), a stock mentioned favorably several times in the recent past by Jim Cramer and others, is seeing substantial insider buying. Officers and directors of the bank have purchased 460,500 shares worth over $1.5 million in recent weeks.
The company raised $324 million of equity this week, and much of the buying was done on the offering. There are some direct purchases scattered in the buying as well. The folks running the company seem to feel that the bank will recover from the problems of the credit crisis and do very well in the future.
Huntington has 345 branches in six states. Although no takeover is looming, they fit the profile of a perfect acquisition in the banking consolidation boom that I see as inevitable next year.
Position: none
As a follow-up to Cramer's bullish rave for the aero names (and my counter), I believe that we're within a couple of days of a short-term top in aero. My take is that following the sharp, green-shoot run-up, an unrealistically optimistic scenario for global air traffic is now discounted in the stocks.
Meanwhile, I expect a sell-the-news reaction to the 787 first flight, which is imminent, and I seriously question when the first delivery in the first quarter of 2010 and production goals will be met. While first flight of this next-generation plane is a tremendous achievement, the time-line set forth for first delivery will be extremely difficult to achieve.
I think the next few months will be 'fess-up time, and we could see a push back (again!) in the 787 production and delivery schedule, a cut to 737 production, further aircraft deferrals and continued weakness in air traffic. Brace for impact.
Position: n/a
First, Charles, thrilled to see you and love your insights. I am banking on Paris Air Show to move Boeing (BA) higher, and I think it sandbagged today. Second, Tim, love your insights, too, and feel exactly like you on Huntington Bancshares (HBAN). That insider buying is amazing. Finally, angry at myself for not pushing U.S. Steel (X), as I told people to take profits after that huge gain from the secondary. But look at that action, it is up 18 points since that secondary!
Position: none
Wall Street Journal, page 2, toxic bonds are the problem. CNBC talking head saying toxic bonds are a problem. These bonds are screaming north, given that housing depreciation has stopped. How can these people not know this? And why should these banks sell these bonds when many are not even unfairly valued anymore? Why not hold on?
Remember, 2005-2007 are the real problems. Home-equity bonds should be valued at zero. But first mortgage should be kept on the sheets! We just dont know the truth about what they own.
Position: none
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Robert Marcin
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| Consumers and Interest Rates/Gasoline |
6/11/2009 12:56 PM EDT
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I think consumers will face not insignificant headwinds from rising interest rates and energy prices, especially since households are still highly levered. Afer looking at the Fed's flow of funds data, households remain overlevered with less debt repayment in the first quarter than in the fourth quarter of 2008. Both mortgage and consumer credit remain out of whack with histroical norms. I continue to prefer tech, industrials, materials and energy over consumer discretionary, financials, telecom and utilities. Although at some long bond yield and oil price, the whole thing becomes suspect again. Till that point, keep riding the good stuff.
Position: none
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Tom Graff
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| Long Bond Auction Extremely Good |
6/11/2009 1:14 PM EDT
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Go figure. The 10-year auction yesterday was terrible. Today's long bond auction goes great. It looked like it was going to be 4.80% just before the auction, but came in at 4.72%. I can't remember such a large miss to the upside on a long bond auction.
Bid/cover was 2.68, which is the best we've seen all year for the long bond. Indirect bids (which is an indicator of foreign buying) was a whopping 49%. That's the best since the first re-opening of the long bond in 2006.
Interesting to note that the 10-year is having an even better day than the long bond. I'm still short TBT but might take some profits for now and see if another entry point comes my way.
Position: Short TBT
Look, a lot of people were leaning the wrong way in stocks betting on a bad auction. They didnt get it, so expect much more scrambling than this. ..Plus drugs on fire... total revenge of the nerds..
Position: none
I mentioned yesterday how the USDA crop estimates underscore the ongoing rally in corn and soybeans. Today old crop soymeal is limit-up, with its price having gone from just over $250 per ton in early March to $433 per ton today.
Soymeal shows up everywhere in your kitchen, whether as a direct food additive or as the high-protein feed mix for poultry and livestock. The jump in relative food inflation and the compression of food-processor margins will be real.
I'll have this in detail for my Tuesday column.
Position: None
Ok, lets see what the bulls are made of. Additional resistance levels are:
962 = 96.70 strong
968 = 97.30 strong
Position: Short SPY (yep...still hedged)
Individual net worth continues to fall. Individual net worth declined another $1.33 trillion in the first quarter. Falling stock prices and real estate values were, of course, the main culprits for the decline. Individual net worth now stands at $50.38 trillion, the lowest since the second half of 2004. The real estate numbers are by far the worst. Real estate values have fallen 32% since the top in 2006. Homeowners in aggregate now have just a little over 41% equity in their homes. That is the lowest level since 1945. Stocks have rebounded quite a bit since the end of the quarter, but housing prices just keep falling.
It is hard to be upbeat when your net worth has taken that type of decline. More and more my accidental choice to rent several years ago to retain mobility seems like a fortuitous decision.
Position: none
Brazil cut rates by a larger than expected 100bp to 9.25%. A 50bp cut is now probable next month likely followed by a 50bp cut in September. As monthly Q2 data indicates the Brazil economy is still in the process of bottoming
USD/BRL is still holding below 2. With green shoots continuing to appear, though, BRL gains toward 1.80 over the course of H2 are likely. Brazil fundamentals remain sound, and justify currency gains as the global outlook improves. TRY, ZAR, and HUF have also firmed as risk appetite rises, but they have much worse fundamentals.
Position: None
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Bob Byrne
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| No love of AXP... |
6/11/2009 2:00 PM EDT
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Anyone know what's pushing AXP lower?
Position: none
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Geoff Johnson
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The What About Bob Recovery: Consumers Taking Baby Steps Forward |
6/11/2009 2:10 PM EDT
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I believe consumers are moving from shock and denial about their lost net worth and impaired finances and on to acceptance and gaining control. I base this on the fact that more than one of my investors has contacted me to discuss their efforts to revise or create financial plans. (Although I am not a direct part of that effort; I am not a financial planner.) It also seems part of the natural recovery process.
There are plenty of things on which consumers will spend less or not spend at all, but we know that. As they begin to gain a sense of control about their finances and if the economy and jobs continues to stabilize, and housing stops declining fast (which I bet it does by end of the year if not sooner), I believe odds favor seeing some modest level of spending growth resumes.
As I have noted, that modest growth, coming somewhere +/- end of the year as we cycle the economic and stock market crashes, should disproportionately benefit company bottom lines thanks to all the spending cuts. Of course, once the benefits of the cost cutting are in the stock, then we'll need real growth to resume. I can't say I can see that at this time, but will focus more on it then.
Short-term obstacles could make the healing process choppy, (for instance, oil rising), but like Bill Murray's multi-phobic character in the movie What About Bob , I believe the U.S. consumer is taking the first baby steps towards recovery. Of course, in sense the real basket case in the movie turns out to be the psychiatrist played by Richard Dreyfuss. Dreyfuss' role, in this analogy, is unfortunately played by money managers like me. Lots of fun ahead!
Position: none
Donahoe on tape saying good things about eBay (EBAY), one of my faves....
Position: none
FDA regulation of tobacco just passed the Senate; a similar bill has already passed through the House. A new regulatory regime is now certainly a fact of life for the tobacco industry -- and will make the circles in the media for the next few weeks -- but the industry has always operated in a highly regulated environment. I don't believe FDA oversight is a game-changer for the tobacco industry, not by a long shot, and it won't have a meaningful long-term impact on the business.Personally, I don't like this legislation. The FDA is stretched too thin already monitoring the nation's food and drug supply. Adding tobacco-industry oversight to that charter seems like an accident waiting to happen. On top of that, it makes the launch of lower-risk products nearly impossible. That said, FDA oversight will soon be a fact of life, but it is adequately reflected in stock prices.
Position: No stocks mentioned
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Jim Cramer
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| Major Kudos to Doug Kass |
6/11/2009 3:07 PM EDT
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Monster good bond call by Doug Kass yesterday! Way to go, Doug! Huge money call.
Position: none
Charles -- any ideas/thoughts about the junk-food bill in Congress?
Position: none
Jim,
Below is an except of a conversation from last week between John Harwood and Senators Max Baucus and Charles Grassley on "CNBC Reports" that I think sums it up...
Harwood: Well, speaking of health-related, there's been a lot of talk about alcohol excise taxes and potential soda tax or sweetened-drink taxes. Are those dead or are those real-life possibilities for being part of a bill that you would...
Sen. Grassley: I think those are nuisance taxes.
Harwood: Not health taxes?
Sen. Grassley: Not health taxes.
Sen. Baucus: And I might say they're on life support.
Harwood: Yeah. They're not likely?
Sen. Baucus: They're not -- they're not head of the list.
Position: None
So tell us, Uncle Ben, is direct intervention in the securities market a one-way street? Is buying mortgages, stocks and government bonds the ultimate Bernanke/Geithner put? Do we buy to support but never sell? Or do you and the administration have plans to lean into the wind on both sides of the trade? Since the feds are the 800-pound gorilla in the markets today, inquiring minds want to know the plan.
Position: none
This is one of those things that makes your scratch your head. Overnight, Barclays announced that it would be including all mortgage-backed securities held by the Fed in their indices. The Barclays Aggregate is the S&P 500 for bond managers, so this is the bond equivalent of a new company being added to the S&P.The Fed mostly holds 4.5% and 4% 30-year MBS, so suddenly the closet indexers went into these coupons in droves. At one point 4's were up 1.5 points on the day.I still don't like these low-coupon MBS, index technicals notwithstanding. With the 10-yearr Treasury near 4%, who wants a mortgage with a 4% coupon and a 10-year average life? I'd fade this sharp move up if I actually owned any.
Position: None.
A Massachusetts court just ruled employers must pay unused vacation time to discharged employees.
Not residing in the Bay State myself, I have no skin in this game, in homage to a phrase of our times. But I do wonder whether the Law of Unintended Consequences will make itself felt once more.
Will employers force employees to take the time whether they want to or not? Will this affect these employees' performance and make dismissal more likely? Will the co-workers of these employees resent having to pick up an extra load? Will employees fearful of dismissal hoard vacation time and wait for a cash payout? Will a secondary market in unused vacation time materialize?
Anyone who has had to deal with Europeans knows they are forever "on holiday." And unlike we poor dummkopfen here in the U.S. of A., they are insulted at the idea of having to work on evenings, weekends, personal days, sick days, vacation time, etc.
The Massachusetts ruling may reverberate for years.
Position: None
Bears trying relentlessly in the closing seconds to take this market down...
Position: none
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Gary Morrow
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| Utilities Face Stiff Challenge |
6/11/2009 3:57 PM EDT
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The Dow Jones Utilities Index is breaking out of a short-term consolidation pattern this week. The index is up over 2.75% today and at new highs for the month. While this is a very positive development, I expect the utilities to face heavy resistance once the sector reaches its 200-day moving average. It has been almost a year since the index traded above this level. The first test will likely attract quite a bit of selling pressure near the 363.50 level.
UTIL Daily -- Nasdaq
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TradeStation |
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The S&P Select Utilities Fund XLU has seen a huge surge in upside volume over the last two days. The fund is up 2.25% today and is trading at its best level since mid-February. The rally today has lifted the XLU through the top end of a mirror consolidation pattern as the Dow Utes. The XLU is also headed for a stiff test near its downward-sloping 200-day moving average. A move up to the $28.40 area will likely see some resistance.
The volume over the last two days, both well above the daily average, is encouraging, but I expect a pause in the rally. A close above $28.50 on continued heavy trade would leave this area behind and set the stage for more upside. A logical near-term upside target would be $32.00 once the index clears its 200-day.
XLU Daily -- NYSE
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TradeStation |
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Position: No positions
Has anyone considered the potential impact on the market of the Ken Lewis hearing this morning? If he proves his case to the satisfaction of Congress, heads are going to roll at the Fed. This is such a clear violation of securities laws on the part of the Fed chair, former Treasury secretary and Mr. Lewis that it makes the Milken matter pale in comparison. There would appear to be elements of blackmail involved as well if the threat of withholding bailout money if the deal was not closed were used, as seems to be suggested by Lewis.
Bank of America (BAC) collected $45 billion in TARP money as well as billions in guarantees as part of that deal. Without the Fed money, they were insolvent many months ago as a result of the Countrywide and Merrill acquisitions. If it is proven that governmental pressure and threats were used, what is the fallout in the stock market?
Position: none
Tim, unfortunately I don't think this will have much of an effect. We as a nation have decided the end justifies the means and we'll sell our souls for one more bull market.
Look at what happened with the auto bonds; some say not to worry because they were just auto bondholders or, worse, distressed securities "speculators."
First they came for the bonds. But I didn't own any bonds, so I did nothing. Then they came for the banks. But I don't like the banks, so I did nothing. Next they came for the executives. But I'm not an executive, so I did nothing.
What will you do when they come for me?
Position: With apologies to Pastor Niemoller
Howard, what's so bad about getting paid for unused vacation time when you get laid off?
Are you comparing us Massachusetts residents to "forever" vacationing Europeans?
Inquiring minds want to know!
Position: Long Red Sox
Nasty close, but a plus nonetheless...
Position: none
Nothing bad, Chris. I've been so rewarded in the past, and I've eaten a few days, too. I'm just wondering whether the legal conference of a property right to that time will produce unintended consequences.
I've already heard from some readers that this should not be a problem. And if it's not, great.
I'll trade you the entire White Sox team for Dustin Pedroia and a case of Sam Adams Boston Lager. And I'll get the better part of that deal.
Position: Long waiting 'till next year
When I think about the outcry over shareholder rights getting trampled by the Fed arm-twisting I can't help but think of Monday-mornign quarterbacking. Sure, let the drama unfold according to due process- it's the risk they took. It's worth considering that we may be quicker to claim affront from the more comfortable perspective of today than we might have during the fall of last year.
It's also worth remembering that the my-way-or-the-highway personality of Ken Lewis may have played a part. I may like the opportunity presented by BAC here, but the weighting I ascribe to his management skill is adequate but not on a par with what I would really like to see for the long haul.
Position: None
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Marc Chandler
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| Asian Markets Should Open Higher |
6/11/2009 4:39 PM EDT
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Asian markets are likely to open higher today, as Asian ADRs rose during North American trading, while Nikkei futures point to a higher open for Japan equities. Weaker yen should help Japan exporters. Yen was also largely weaker but outperformed the buck, so dollar/yen eased back below 98. The dollar was largely weaker vs. the majors, continuing the saw-tooth pattern that we've been seeing of late. The buck initially firmed after the retails sales and jobless claims data, but quickly reversed course to end the day weaker.
Position: None
I had mixed emotions about the close, Dougie, because at 3:45 I had a post that I was going to send which said that it looked like they could close it down ... when it didn't close down, I therefore regarded it as a victory and filed the piece I did. I have to tell you that the selling was just totally off the charts and indicative of the kind of behavior that says unless there is something bad going to happen, tonight was total manipulation. Total!
Position: none
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Doug Kass
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| Having It Both Ways? |
6/11/2009 5:12 PM EDT
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Memo to Jim "El Capitan" Cramer:
Unless I am misinterpreting your comments, Jimmy -- you cant have it both ways.
You can't admire a strong close but disregard a weak one -- from my perch!
Again, I see the makings for an important top at these levels.
Away from my fundamental view of a vulnerable consumer (and the specter of higher interest rates, a surge in energy prices and rising tax rates which argue in favor of a 2010 double dip), it remains my view that the U.S. stock market is ahead of the real economy and that the recent ramp has discounted the short-term production boom I discuss in today's opener.
Technically, the foundation of the Nasdaq -- that you admire -- are increasingly unsound, and the index appears to be rolling over.
Finally, the leadership and breadth are narrowing.
Position: None
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Bob Byrne
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| Airlines and TLT |
6/11/2009 6:04 PM EDT
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A few quick notes: I have exited the last third of my airline position for flats and small losses. The prior two thirds worked well. I have also initiated a position in the TLT -- TLT cycle analysis.
I will be gone for a few days while I pay the price for skiing 70 days a year -- ACL reconstruction. I'll do my best to get my levels out early tomorrow morning (pre-surgery), though I will probably be out Monday and Tuesday.
Position:
Long TLT
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