MARKET COMMENT
February 12, 2007
One way or another investors need a catalyst.
When none is perceived profit-taking
ensues.
Friday and today contained no
stimulus, volume was relatively light and markets fell across the board.
Investors are fickle in these environments
choosing to ignore upgrades on semiconductors and the positive aspects of lower
oil prices while seizing on comments that Latin American markets have moved too
far too fast.
And, Semiconductor’s were being touted as value plays today
but instead of rallying they just got more valuable.
It’s not all one way for any high-flying Emerging
Market.
As in India last night got hit by the
combination of overbought markets coupled with, “Worries about rising inflation
and hardening interest rates combined with the mega deals by Hindalco and Suzlon to put the
bulls on the defensive yet again. And, even the strong industrial production
data failed to entice the bulls” [per Indiainfoline.com].
Looking at the broader US market sectors, there weren’t any
winner’s of note today.
Elsewhere let’s just look at China for today.
Clearly the authorities are pleased that the yuan is moving the way “they want it”.
They’re on and off concerned about
overheating stock prices but can’t seem to reach any conclusion about what to
do about it.
Today was sort of rambling post.
Sometimes I get questions about why we cover
the same sectors so frequently.
The
answer is these sectors are what market investors are focused on.
You never know where market moving news will come from.
Today investors are focused on Bernanke’s testimony to see if he’ll continue the tough rhetoric
used by his comrades about the need to raise interest rates if inflation
threatens.
Given that bullish investors are
searching for a catalyst to keep the party going higher focusing on Bernanke may be a poor bet.
Have a pleasant evening.
Disclaimer:
Among
other issues, the ETF Digest maintains positions in: ILF, FDN, INP, SPY, MDY,
IWM, GLD, SLV, DBP, EFA, and EEM.