MARKET COMMENT
March 27, 2007
Homebuilder’s having some problems?
And, here I thought they were “value plays”
according to some prominent Wall Street analysts.
The one thing that seems so amazing is that
no one seemed to take seriously any of the warnings, not to mention insider
selling, issued by CEOs of all these firms.
It’s bizarre on the surface but perhaps just reflects the high levels of
cash rationalizing investments.
There’s some spillover as the subprime
story has become a bobber that pops to the surface every few days only to be
pushed lower quickly by officialdom.
Bernanke gets his shot tomorrow with congressional
testimony.
Can the man successfully talk
out of both sides of his mouth?
On the
one hand he’ll be suggesting that the Fed is “vigilant” in fighting inflation
which might help the dollar and push gold lower.
On the other, he’ll be under pressure from
politicians to do something about mortgage issues a la lowering interest
rates.
He can’t have it both ways can he?
Five will get you ten he’s undergoing intense
rehearsals with his handlers tonight.
Does Chucky have
another sequel in him?
Chucky the Consumer had a rough day today.
Consumer Confidence data was slightly
lower.
That doesn’t mean you should mess
with Chucky.
The one story I found
interesting was the supposed rub-off from the subprime
mortgage issues to Harley Davidson where it was reported that their borrowers
are well, somewhat subprime.
So, if you’re looking for a used chopper, you
might get one cheap soon.
The dollar was only slightly lower today despite strong
German data and lousy US
data.
Again, Bernanke
might be ready to say something to lift Bucky.
However, if he does, gold will decline and so
will everything else one would think.
Okay, let’s talk “a little” about the stock market since I
think we’ll see more meaningful and decisive action tomorrow with Bernanke’s testimony.
Elsewhere and overseas…
That’s enough charting for today since tomorrow could be
more significant in terms of volume and trend.
But again, the news cycle is impossible to predict.
[As I write this Beazer
Homes, BZH, is according to the Charlotte Observer under a criminal
investigation.
Its stock, already down
1% during regular hours, is down another 15% in after hours trading.]
I see that bond market Big Daddy Bill Gross of PIMCO stated
that the Fed will have to either cut interest rates low enough so that
mortgages would be at 5% or, he continued, home prices will have to fall
20%.
He says the Fed’s hands are tied.
I just said that which means, well, nothing
at all really.
Have a pleasant evening.
Disclaimer:
Among
other issues, the ETF Digest maintains positions in: UDN, GLD, DBE, DBC, IEF,
MDY, TTH, RYE
and EWG.