MARKET COMMENT
April 18, 2007
The headline will read happily that the Dow Jones Industrial
Average has made a new high wiping-out the sharp decline of late February and
early March.
That is that!
Leading markets higher were earnings from important
companies especially financials [banks] that are heavyweights in the DJIA
pushing it higher.
Not to be left out were homebuilders caught in another
short-squeeze.
Mortgage foreclosures up
47% from last year and FRE and FNM decided to pony-up $20 billion to aid subprime borrowers.
How will that work?
How will that
fit in with their delayed financials?
None of our business I guess.
In tech land, earnings were mixed as YHOO was hit hard while
semi’s rallied led by INTC.
Tonight EBAY
will report and that can change the complexion for the Internet space.
Further some cash-rich tech companies in the
semiconductor space are contemplating increased stock buybacks.
So much for research and
dividends.
Less noticed in the DJIA hullabaloo was the declining dollar
which will be pointed to as the villain should markets ever decline again.
In other markets things were just okay since the DJIA is headline
stealing today.
Meanwhile around the planet everything seems to be just
moving along.
The folks who bought you USO [United States Oil ETF] today
launched UNG [United States Natural Gas ETF].
If you have the stomach for trading a market this volatile you’re
welcome to step up to the plate and give it a go.
Just remember, DBE [PS/DB Energy ETF]
includes only a 10% allocation to natural gas for one primary reason,
volatility.
Remember this is the
commodity that caused hedge fund Amaranth to collapse.
An active hurricane season could cause prices
to spike seasonally.
Good luck!
That’s a wrap for the day.
The bulls remain squarely in charge.
I do detect some hesitancy in some overseas markets but they’ve had a
good run and might take a rest here.
More earnings will drive markets.
And once that’s over the condition of the dollar may take center
stage.
But who can predict the future?
Have a pleasant evening.
Disclaimer:
Among
other issues, the ETF Digest maintains long or short positions in: XHB, FDN,
UDN, GLD, DBB, DBE, SPY, MDY, IWM, EFA, EEM, EWW, EWZ, EWC, EWG, EWN, EWJ, EWY,
FXI and EWA.