MARKET COMMENT
March 26, 2007
I was worried about the escalating Iranian situation over
the weekend and it seems Mr. Market was too--well, sort of.
More damaging in the early going was crummier
home sales data that missed forecasts by a wide margin.
Blame the cold weather?
Well I don’t wanna say, but geez, most industry CEOs haven’t given investors a shred of
hope for positive developments for their industry or company.
Only Wall Street analysts have been promoting
the sector as a “value” play based on some who feel the stocks are now selling
at book value.
But based on what data?
Old numbers generating “garbage
in, garbage out” conclusions?
If
so, it’s a silly and misleading exercise.
Funny thing though, none of the pusher’s on Wall Street believe anything
these CEOs are saying or doing.
As to
the latter, they’re still selling their stock.
Anyway, the one-two punch sent stocks reeling early, gold
and crude oil rallied while the dollar fell and bonds rallied.
By mid-day you would have thought the strong
rally begun last week was as quickly over.
But no…
Let’s look at new home sales.
Jesse at Cross Roads Café has posted this
chart which basically represents the trend.
Obviously, the Iranian situation was on investors’ minds
today.
However, the issue was given an
interesting twist with an article by Walid Phares here
pointing out that domestic pressures from within Iran may be fueling their current
strategy.
Where’s the money coming from to fuel a stock rally?
It doesn’t look like the flow of funds is rally
supportive based on the latest report from AMG Data Services.
But, this is mostly retail investors and as
Cramer says: “the moron longs”.
What a
guy!
So, where else would these funds come from Church Lady?
Let’s see…um, could it be our tax dollars at
work???
Today alone another $9.5 billion
from the Fed and another $3.5 billion from the Treasury were tossed to our
friends at brokers the primary dealers.
A variety of overseas markets are featured below.
I don’t really have a lot to add to the action this
day.
One thing’s for sure, it’s the end
of the quarter and come hell or high water portfolio
managers will dress these markets as best they can.
They might also get a little help from their
friends too.
Tomorrow could be “Turnaround Tuesday” or not.
I suspect Bernanke
is in some “focus group” rehearsing his sound bites for testimony on
Wednesday.
This is probably what
investors are awaiting.
But as always,
the news cycle is a pesky and unpredictable thing.
Have a pleasant evening.
Disclaimer:
Among
other issues the ETF Digest maintains positions in:
MDY, DBE, GLD, DBP, IEF, UDN, FXE, FXA, EFA,
EEM, ILF, IEV, EWN, EWO, EWJ, EWY and EWA.