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Jim Cramer
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| Deficit/Hedge funds |
6/16/2009 6:34 AM EDT
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I think that the notion of turning the spigot off because of the deficit is something that failed in the 30s. They will err on the side of recovery. We should have SOME faith in Bernanke who, since Lehman, has be consistent and great..They are worried about unemployment and a lack of lending... .Meanwhile, Bloomberg has a great story about how hedge funds are beginning to sprout again. This is good news because, theoretically, that means more capital returning to the market that will tak risks.
Position: none
Last night, Celgene (CELG) released results from a phase II study of apremilast in psoriatic arthritis and the data look good. Apremilast is an oral drug and was able to significantly reduce the symptoms of psoriatic arthritis with a relatively clean safety profile.
At this point, Apremilast's efficacy doesn't look as potent as the biologics (injectable TNF inhibitors like Amgen's Enbrel, for instance) used to treat the disease today, but then, apremilast has the advantage of being a pill. If the drug's safety profile remains relatively benign, oral dosing could be an advantage.
This is the first bit of good news from Celgene in quite awhile, so we'll see how the stock reacts. I don't think apremilast is a big enough drug to make investors forget about the ongoing worries over Revlimid growth, etc. that have dogged Celgene, but good news is good news.
Getting back to the Genzyme chatter from yesterday, it's still not clear why the company cancelled a series of European investor meetings. Genzyme didn't return my call and the company isn't saying much to the sell- side either.
My post yesterday focused on speculation that Genzyme could be making an acquisition – and guesses as to the possible target were all over the map. The other possibility is more dour – another delay in the FDA approval of Lumizyme, the company's drug for Pompe disease.
"Current company guidance is for approval by the end of 3Q. We understand that the FDA re-inspection of the 2,000 liter facility is now complete. Thus, it is THEORETICALLY POSSIBLE (we do NOT know if this is the case - we are speculating) that the FDA has supplied Genzyme with some sort of feedback on this inspection (a form 483?)," wrote Deutsche Bank analyst Mark Schoenebaum last night.
Schoenebaum notes that the stock's 5% sell off Monday prices in a Lumizyme approval delay.
Position: none
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David Peltier
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| SPX Earnings Estimates raised at Morgan Stanley |
6/16/2009 7:42 AM EDT
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This morning, Morgan Stanley boosted its earnings estimates for the S&P 500 by 28% for 2009 and 9% for next year. The brokerage now sees a third quarter earnings trough (ex-financials).
They may not have been the first brokerage to do this, but reflating of earnings expectations is an important part of the bull case for sustaining the recent stock market rebound.
That said, Morgan Stanley sounds a little skeptical of the run itself, raising their year-end price target on the SPX to just 900.
Position: none
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Marc Chandler
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| Dollar Down ahead of Turn Around Tuesday |
6/16/2009 7:44 AM EDT
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The Yen is up, and dollar lower after failing to extend gains overnight. A better than expected ZEW report, and continued dollar bashing talk from BRIC countries have been euro positive.
Bourses are mixed, with Asia following the US lower as concerns over Obama's financial system overhaul, dragged financials down. However, European markets and commodities are flat/firmer, and indicators suggest firm US open.
Asian bond yields are down with 10-Year JGB to 3-week low. Markets are mixed in Europe. 10-year gilt yield is down on high future demand expectations. Moody's warning of some investment grade companies unable to meet requirements has boosted CDS.
Position: None.
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Tom Graff
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| Bonds slightly weaker, flatter |
6/16/2009 8:00 AM EDT
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Treasuries are slightly lower (in price, higher in yield) after solid gains yesterday. The yield curve is flatter, with the long bond flat, and the 2yr 3bps higher in yield.I think the easiest trade going in the Treasury market is a flatter curve. Classically, the yield curve flattens during periods of low inflation (check), extended unchanged Fed funds target (check), and strong demand for certainty (check). So why is the curve at all-time steep levels? I think its because of a misguided fear of inflation and/or the deficit. While philosophically I'd love to see the government spend less, our current debt level is manageable. If we can calm down the BRICs by showing we'll pay down the debt when the economy improves, the curve will get much flatter, with the long bond rallying strong.If the Fed does feel the need to hike rates sometime this year (which I doubt, but its possible), then the curve also flattens, with the front-end selling off more than the long end. That's probably a bear flattener (all rates rise, but front end rises more) so only a hedged long bond position would work.
Position: None
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Adam Feuerstein
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| Genzyme manufacturing plant hit with viral infection |
6/16/2009 8:37 AM EDT
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The Genzyme (GENZ) mystery is solved and it's not good news. The company just announced the temporary shutdown of its manufacturing facility outside Boston due to a viral infection in one of the bioreactors. The shutdown of the manufacturing plant will cause supply constraints for two of Genzyme's key drugs – Cerezyme and Fabryzyme – but the company is not quantifying the financial hit yet.
Position: none
The QQQQ is trading up this morning from 35.90 to 36.10 ... PPI and Housing starts numbers came in slightly in favor of the bulls but there is little reaction... It does not appear to be a game changer so I am going to look for more selling at the open.... Yesterday we saw a change in the market pattern of early selling and later day recovery... The later day recovery was weak, the QQQQ only rising about 30 cents from the early lows... I will be looking for an early short and look for a bottom around 35.50... Keep an eye on the cheap biotechs, JAZZ did very well yesterday as did CYCC...
Position: NM
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Alan Farley
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| Metallic Opportunities |
6/16/2009 8:46 AM EDT
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Industrial metals stocks sold off hard on Monday, following their strong rally runs. It's likely that triple witching expiration is contributing to downside pressure, because the strongest sectors tend to act poorly during these quarterly events.
I'd view any additional selling into lower strike numbers as a buying opportunity, but its best to remain cautious until Thursday afternoon, when we got a decent snapshot of Friday's expiration levels.
My favorite plays in the sector:
- Teck Resources (TCK)
- Allegheny Technologies (ATI)
- US Steel (X)
- Thompson Creek (TC) (non-optionable)
Teck Resources (TCK) chart here.
Position: n.m.
Doug, I could see your earnings take proving correct and providing you with a 2010 surprise for your annual list. The surprise (to bulls) would take the form of a material (5%-ish) inflation component to nominal earnings gains in 2010 vs. 2009, and I think 5% may be conservative. On a "real" basis, there won't be much improvement as the impact of stabilizing factors in financials (m2m changes, etc.) will largely be in the 2009 comps.I bet in that environment we see SPX multiple contraction, a stagnant range-bound market and outperformance of current-account surplus economies and commodity-rich economies. It will be a very narrow market that will continue to weed out the buy side.
Position: None
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Marc Chandler
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| Housing Data Have Little Market Impact |
6/16/2009 9:23 AM EDT
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Housing data suggests that the market may be stabilizing, as starts rose 17.2% to a 532,000 pace, which is above the 485,000 expected. Building permits rose 4.0% to 518,000, when 508,000 was expected.
PPI data showed core prices falling over last month and rising slower than expected over last year. This should hush talk of a near-term rate hike, as the Fed's Richard W. Fisher said just yesterday that it is not appropriate to consider a policy shift in a still-slack economy.
CPI, due tomorrow, should show core figures up 0.1% over last month.
Position: None.
Please understand that option pinning is more powerful than Nucor's (NUE)narrow loss or Baltic dry freight or housing starts, so expect no real rally until expiration madness is fully digested.
Position: none
Apple (AAPL) and Research In Motion (RIMM) showing post-pin action -- RIMM reports tonight, so that may be invalid. But as usual, those led us lower, so it might be a good sign...
Position: none
The ability of GM to sell off Saturn, Hummer, Opel, Vauxhall and now Saab really makes me wonder how that once-mighty firm could have been run so badly for so long. It also makes me wonder how the various buyers of the separate pieces will be able to compete.
As GM always ranked near the top of corporate advertisers, it could provide the various brands with some measure of public awareness. Can Penske plug Saturn as much as GM could, especially in an increasingly fragmented advertising market? Can the various subsidiaries absorb all of the fixed overhead once swallowed in Detroit?
If the industrial production and capacity utilization numbers released this morning were weak, how much weaker will they get as all of the support structure for the auto industry continues to reel?
Finally, will the non-UAW foreign names producing cars in the U.S. be allowed to compete on a level playing field against GM and Chrysler legacies enjoying some measure of state subsidization?
It was almost 30 years ago when the word "reindustrialization" was all the rage on the conference circuit. We were supposed to have a national industrial policy directing state aid to things like the auto and steel industries. These policies failed. The current UAW life-support plan will be an even more expensive failure. I think we are just coming to grips with the magnitude of the auto industry's forthcoming damage to U.S. manufacturing.
Position: None
I am thinking JPM might be the "tell" of the day as this one should ideally be working its way back to $35 given the immense number of June 35 uts that need to be sold... Again, we are so not out of the woods with most stocks..
Position: JPM
I am adding to a position in AGO below 12.60. The stock is trading down on news of an offering to pay for the acquisition of FSA. I believe the acquisition will be highly accretive for this Wilbur Ross name.
Position: long AGO
My bad, RIMM' s wednesday, which is tough because the option pressure will play havoc and determine whether people think the quarter is good or not..
Position: none
Mark, your comment on AGO reminds me of the muni monoline crisis of early 2008. So many crises, so little time.
Does Assured Guranty have a balance sheet sufficient to back up its policies, or is it going to be playing the same game we saw with AMBAC, MBIA, etc, on the muni side and frankly that we saw AIG playing with corporate CDS?
On a broader level, why is muni insurance a necessary business? An investor in an uninsured muni gets a higher yield than on an insured muni; isn't that difference in yield an insurance premium? The insured issuer presumably has to pay the insurance company a similar amount.
Position: None
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Gary Morrow
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| Best Buy Down on Heavy Trade
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6/16/2009 11:16 AM EDT
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Best Buy (BBY) is off 5% this morning after its disappointing first-quarter report.
Selling is very heavy in the early going, with volume already well above the stock's daily average. Assuming BBY remains negative into the close, this will be the heaviest downside day for the stock since last November.
In the short term, I expect more downside for Best Buy and a retest of strong support just below $35.00. The stock held this area last month and will likely do so again once the current heavy selling eases. I am not in the stock at this point but will be a buyer on the expected further weakness.
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TradeStation |
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Position: No positions
GameStop (GME) has gone down for several sessions in a row, ever since it popped to about $24.80 on rumors last week that Best Buy (BBY) was interested in it.
I don't believe the rumors, but that said, I think the stock is a good value here. It trades for 9 times earnings and 7 times forward earnings. It has a decent balance sheet with a small debt load that can be easily covered with cash on hand and cash flows.
I believe the stock is being unfairly beaten up because of worries that video games will continue to slump, but the state of the video game market has been no secret, and a stronger game pipeline later this year should help. I'm happy to buy this stock for a short-term trade as a snapback play. I may keep some of it on for a longer-term value play or I may just watch. Either way, I think this is a good value here.
Position: Long GME for a trade.
Howard, Warren Buffet's comments on Muni insurance in his most recent Berkshire letter echo your concerns (and may drive business to Berkshire). My bet, and I think Wilbur Ross's bet, is that the business isn't going away, that even if we see an unprecedented rise in Muni defaults, recovery rates will be high, and AGO has the opportunity to gain share from the collapse of ABK and MBI.
Position: long AGO
Awesome piece by Adam to the right with biotech calendar. I would clip it and save it as these stocks have incredible potential and exploding volume. Take a look at it--it is fantastic!
Position: none
I really would have liked to have seen a lower housing comstruction number. Some seem to think that the 17.5% jump in housing starts is good news. I will take the other side of that coin. With all the inventory on the market why is it necessary to build at all. There is a lot of low priced inventory in just about every market in the US right now. The margins for a new home have to be incredibly slim with the competition form short sales and foreclosures. We are still about 455 below last years construction levels but I would like to see us 80% or more below that level. Inventories need to clear and building at a 500,000 plus clip does not help us do that.
Position: none
Actually it is NOT bearish, here's why. These guys have a real good idea about inventory including foreclosed inventory since many of the houses--if not most--are in their developments. You see a volume spike, they see it as a chance to be able to use their land and get it off the books. Remember, the trick is to recognize that the goal is NOT appreciation. A bottom has NEVER led to price appreciation.. Only to prolonged stabilization. Believe me these guys wouldnt build a single house if they didn't see stabilization because it costs them about $180,000 to build a house and the average price is about $190,000. They know more than we do because they know their own cost which is what matters... It will never be perfect. The goal is not to catch it going up but to catch it stable, which is what it has now been for three months... except in isolated areas like New York--last to fall, last to bottom....
Position: none
Tim, perhaps higher housing starts are greeted warmly as evidence of restored credit flow. That is part of the necessary renormalization process. In addition, there is a baseline start level required for maintenance purposes as old housing stock is torn down, upgraded or replaced due to fire, flood, etc.
No one can argue the slack in the industry. What is harder to ascertain is how many of these unsold homes are in exurbs or were put up on really half-cocked builder speculation in a place where demand was non-existent. There are probably housing developments quite literally worth their scrap value less the costs involved in salvage.
There's an interesting item here in Chicago on the fallout of the housing bust. A local furniture chain, Plunkett's, is going out of business. They blame the housing bust. The multiplier effect of housing starts on furniture, appliances and decorating is huge, and anything pointing upwards in that market will be welcomed by many.
Position: None
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Tim Melvin
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| I hope I am wrong |
6/16/2009 12:23 PM EDT
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Jim, I really hope you are right and I am wrong. I would like to think the builders actually had that type of superior information. When visiting my new favorite companion this weekend in a Baltimore suburb I saw a lot of construction activity in an area where I KNOW there is excess inventory and a lot of foreclosures on the market. I found it somewhat confusing to say the least. I can see where apartment demand may be increasing and drive some starts of multi family but the new single family construction is a mistake in my opinion. If the builders really have better information that we do, why did they get caught with all that raw land inventory and options at the top?
I do hope you are right I would LOVE to be wrong about this. Housing is the key to a recovery. I agree they do not need to go up but I am yet to see signs of lasting stabilization
Position: none
Real estate is a regional cyclical biz. The cycle bottoms when the selling explodes upward but the price stops going down. I dont know what else there is to say. There will not be a judge saying "this is the bottom." It will be doubted until prices appreciate but then again then it will not have bottomed it will be going up--and that's not what i care about.
Position: none
Bank of America is under perhaps the most option pressure at all to finish at $12.50-seems like it has to get there and it is really being banged down....
Position: bac
Best Buy's statement regarding the recent drop off in sales has the retail sector sloppy today. As I expected, higher gasoline, higher interest rates, and higher unemployment should temper the recovery in the retail business. And that makes recently spiking retail stocks a sell. Retail ETFs at 2007 prices?? Give me a break. One has to admire Cramer's no nonsense call on the housing bottom. I think that he's a bit early and there is another 10+% downside in the national housing market. That's also the consensus, so Cramer's call is contrary. We shall see. Either way it's not really a tradeable call on housing/related stocks either, though it would help the economy in general. I would avoid bottom fishing Wall Street related real estate like the plague. That means Manhattan and the Hamptons.
Position: no positions in stocks mentioned
I do agree with Jim that in many markets at the lower end including starter and first move up homes there is limited downside at current prices unless we see a big jump in long term interest rates or another leg down in the economy. This is because the rent versus buy at the lower end is very favorable in many markets right now. However, each market is different. Real estate is local. Also, I think there is still a lot of downside in most markets for higher end and luxury homes. That market has not corrected very much and there is tremendous pent up supply and very little demand based on what I'm seeing. I would also not buy the homebuilders here. They have major balance sheet and legacy issues as well as business models that aren't really good anymore.
Position: none
Thanks Chris. I always want to point out that if you were in New York when California peaked and started going down you would say that NO WAY has housing peaked. In fact Toll Brothers was building big apartments right then on false assumptions of still rising market. It is a regional market but you had to call the peak in q-4 2006 ahead of where it peaked because it peaked in key areas. Same thing now the other way...
Position: none
I expect some short-term market support at the S&P 906.80 level, which is the 200-day moving average.
Position: Short SPY
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Jim Cramer
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| Doug --Housing bottom--market has work to do |
6/16/2009 1:20 PM EDT
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We are in close agreement--Doug and I--on housing and the market---
Position: none
I'm glad Jim brought up that point about how New York housing (particularly Manhattan) peaked way after California and many other markets. I can remember having discussions at that time with my New York real estate friends and hearing their explanations for why housing in New York and Manhattan were different and wouldn't crash with the rest of the country. Another reminder that bubbles can make even very smart people create bizarre rationalizations for what is happening.
Position: none
Wilbur Ross has excellent insight into whatever is going on in the municipal financing market via his position at Invesco, which bought Ross' investment firm WL Ross in 2006. Ross now has his hands on about $400 billion in assets, much of it municipal and state money, that Invesco advises on. There are very few people who know the state of the world in terms of who is defaulting in the municipal space as much as Ross.
Additionally, he's in an excellent position to drive business to Assured Guaranty (AGO). I'm buying this dip and holding for the long run.
Position: Long AGO
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Jim Cramer
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| Tried to by California, buying New York |
6/16/2009 1:46 PM EDT
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I went out to buy a house in the Palm Springs area in November of 2007, and prices were in free fall so i figured i had a chance to wait. Then i went out in November of 2008 and there was virtually nothing for sal.. Nothing. It was remarkable. Beginning one month ago i began the search to buy real estate in New York, betting that we will see a bottom at the beginning of next year. It wont be before then because there are 22,000 new units coming on next year. But the kind of building i am buying will take six months to fix up. I bought one last week. I am looking for a second one starting tonight.. These are apartment buildings with four and five apartments in them... Money where my mouth is...
Position: none
Hey Jim, I know a way to guarantee that housing bottom. Have the Feds guarantee all housing prices purchased from some specified time like 2009-2010. If they can backstop the crap at Citi, the garbage at AIG, and the junk in the PPIP program, why not guarantee housing purchases. Just like that new car gimmick, if you lose your job, just send back the mortgage. Just like I predicted in my BURP and FART programs in my 10 surprises for 2009 column.(see archives for acronym definition) You gotta love the Bailout Bubble.
Position: none
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Tim Melvin
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| Buying More Bronco |
6/16/2009 1:59 PM EDT
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The uptick in oil and gas prices could turn out to be good news for one of my book value beauties Bronco Energy (BRNC). Right now only 30% of the company's drilling and work over rigs are being utilized. Higher prices usually lead to increased drilling activity and would be beneficial for Broncos bottom line. The stock trades at just 40% of tangible book value and an enterprise value to EBITDA ratio of just 3.2. Although institutional investor Wexford capital has been paring back it stake in the company, officers and directors have been buying stock in the open market. Keep in mind there was a failed buyout offer for this company at $18 a share not that long ago, more than triple the current stock price.
I am going to put some below market bids in on this one and see if I can add more shares on the cheap.
Position: Long BRNC
What the heck. From my top 10 Surprise column on 1/6/09:In order to mitigate the recession, the Fed and the Treasury announce programs to guarantee all liabilities of every type, for every person in the United States. The government launches Bernanke's Universal Recovery Program (BURP) and the Fed's Asset Rstoration Timetable (FART) in order to stem the economic and financial market malaise.
Stocks respond positively to the governments intervention in what becomes known as the BURP and FART rally. Shares soar 20% into the summer of 2009. However, as the economy continues to take gas (pun intended) and lofty recovery expectations are not realized, shares give back all of their first-half appreciation. By year end, the market is down modestly. For what it's worth. Shares soared all right, but from much lower prices than I expected.
Position: none
Bob, why don't you patent your trade ideas and get royalties from the wonderful folks at Victoria Bay Asset Management who have delivered unto us USO and UNG? They make as much sense as their current crop of commodity ETFs.
In all seriousness, long-only commodity investments are an atrocious concept. Futures markets are designed for price discovery, risk transfer and commerce facilitation via the exchange of futures for physicals mechanism. They were not designed to roll a unidirectional claim forward and clip their investors in the process. The USO contributed to the huge contango in West Texas Intermediate crude oil at Cushing earlier this year, and the UNG is contributing to an incredibly steep storage season contango in natural gas.
The USO threatened to destroy WTI as a benchmark for crude oil pricing. What will UNG do for natural gas?
As an aside, investors are better off in a total return swap for natural gas than in a single-month rolled position. But anyone who has looked at the Dow Jones-UBS total return index for natural gas should leave the room screaming and more importantly, clutching their wallets. It has lost 85% since January 1991. Yeesh.
In contrast, the DJ-UBS total return index for crude oil is up 490% over the same period, and that's down from 1800% a year ago. Incredibly, there are people who think these two commodities should be traded as a substitution pair. What acronym should we assign to their ETF, Bob?
Position: None
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Gary Morrow
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| FedEx Looks Vulnerable
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6/16/2009 2:30 PM EDT
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FedEx (FDX) is down today for the fourth day in a row. The stock is at new lows for the month and has taken out support near the May lows. Volume has picked up during the recent downturn after weeks of levels well below average.
The stock certainly looks very vulnerable going into tomorrow's premarket fiscal fourth-quarter report. Yesterday the stock closed below its 50-day moving average for the first time since the March recovery rally received a powerful buying surge on April 2. The early-April breakout began the second leg of FedEx's spring rally that eventually lifted the stock 75% above its March 9 lows.
The rally began to show signs of fatigue early last month as FDX neared its 200-day moving average. After a weeklong pullback, the stock found support just above its 50-day moving average at $52.00. Volume remained very light on the weakness and remained that way as FDX rallied early this month. The breakdown this week has brought a surge in volume with it and has left the stock in a very weak position going into tomorrow's announcement. Investors appear to be very unsure of what to expect.
| FDX Daily -- NYSE
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TradeStation |
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Position: none
It is the 12s, sorry, not the 12.5s that are driving Bank of America (BAC) -- it is nasty. But I really want to take the other side of the trade and am restricted for Action Alerts PLUS. It is my fave name in the group...
Position: BAC
Gary, maybe the FedEx (FDX) June 50 puts for a buck? I use the outs, even though they are expensive, because FedEx has been down so much and if Fred Smith says, "The turn is happening," you will be smoked otherwise....
Position: none
Headline on Bloomberg: "Contrarian Manager To Start Distressed Fund."
Does this mean he buys non-distressed securities? Or buys over-priced distressed securities? Or is he short put options on ultra-long ETFs on the credit default swaps on the convertible preferreds? What does this person do for a living, and how does he make the world a better place?
Everyone is a contrarian. Even if they work in a cubicle.
Position: None
It felt like the airlines we own, Continental (CAL) and United (UAUA), were getting "sold out" yesterday and they are bouncing a little today. If they do hold around here, there's probably some room for a decent bounce even in the absence of any happy news. For the moment I remain wrong in them.
Mosaic (MOS) is coming in, but I want to see the whites of its eyes before buying back what we sold (or as the indefatigable rooster said of the crows flying overhead, "Ssshh! They're getting closer!" for those of you who know that old joke),
The inflation seems to be a little less gripping, based at least on the "bump along" economic research notes I have seen today.
Position: Long UAUA CAL TLT MOS PHOS
Oh Howard, it's not a distressed fund. That wouldn't be a contrarian play at all, as you correctly point out. It's a "dis-tressed" fund!
That manager is going to make it cool to be bald -- too bad he's a few years too late on that one, too; Vin Diesel already did it. (And none too soon, now that I have to slather the suntan lotion on the top of my noggin as well.)
Position: None
Here are a few stories you may have missed from our flagship site:
Position: n/a
Apple (AAPL) never came back -- but JPMorgan Chase (JPM) is still well off the $35 strike.
Position: Long JPM.
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Marc Chandler
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| Obama to Introduce Further Overhauls Tomorrow |
6/16/2009 3:41 PM EDT
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Expect:
Expansion of the Fed's powers to regulate large market participants. Some fear it will give the Fed, which is not responsible to Congress, too much power.
Administrative power to break up systemically important companies, especially those in insurance.
Creation of new financial regulator responsible for overseeing consumer-related financial products for investor protection.
Treasury to propose new rules requiring loan originators to retain some of securitized loan credit on books, stricter accounting and standardized contracts.
Already there are complaints that rules will reduce market participation, which helps make credit accessible. Treasury is likely to contend the new rules will establish firm footing.
Position: None.
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Tim Melvin
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| Regions Downgrade |
6/16/2009 4:04 PM EDT
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I see the busy folks at Fitch Ratings have downgraded Regions Financial (RF) today. Fitch said that a high exposure to real estate would continue to cause credit problems for the Alabama-based regional bank.
Even though Regions recently raised $2 billion, the ratings agency is concerned that credit losses will continue to hurt earnings and capital levels at the bank for some time to come.
This sets up another one of those classic battles between stock analysts and bond researchers. Several firms, including Goldman Sachs, have raised the stock to a buy rating in the last week. After the capital raise, tangible book value for the bank is about $7 a share, but that could easily be cut by continuing real estate lending losses. Regions has heavy exposure to the residential construction markets in Florida and the Midwest, and that could cause chargeoffs to rise over the next several quarters.
I think the bond geeks have this one right, and Regions stock does not do much at all for the balance of the year.
Position: none
The dollar was largely weaker as Turnaround Tuesday worked like a charm again. Still, given the negative news stream from Europe, euro bulls continue to find it difficult to take the single currency much above 1.40 even as dollar bearishness remains strong. This week's price action recalls the saw-tooth pattern we saw last week. Sterling outperformed the euro again and so EUR/GBP is making a run at .8400. Yen was firmer again, and outperformed the buck so that dollar/yen tested 96 area. Trading will likely remain choppy this week. EM currencies were mixed vs. the buck, but should continue to recover later this week if green shoots continue to sprout.
Position: None.
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