MARKET COMMENT
November 6, 2006
“Vote early and often.”
Al Capone
Big Al’s famous quote became the staple of politics in Chicago. True story: My father was the campaign
chairman for a candidate running for Cook
County (Illinois) Treasurer when the opposing side
kidnapped him, holding him until he agreed to withdraw his candidacy, which of
course he did. These day’s things are
only different in “style” with lawyers (vote count challenges) and paid talking
heads (spin masters) driving us all nuts.
After all elections and ongoing falling action is big business for the
media.
Now will this election feature surprises? Sure, some real and some just so much “fill”.
But how it affects markets is another matter altogether since Mr. Market may be
indifferent. Market’s rallied sharply today
wiping out declines from a previous week that “today” appears just as a shallow
correction.
What drove markets higher today? “Happy Goldilocks talk” from Fed Governor
Moskow and more merger activity. It’s
widely discussed the heavy cash balances corporations are carrying and, if they’re
not buying up their own shares, they’ll buy all the shares of others.
Let’s just wander around a little and check out some other
markets where investor interest is keen.
Now let’s travel globally and look at some selected markets.
These charts provide a pretty good sampling of global
issues. Tomorrow is the big election in
the US
and when it’s over (let’s hope it gets over!) markets will react “maybe”.
The important thing is the high level of liquidity residing
in corporations, hedge funds and Wall Street trading desks. If there isn’t any inflation as measured by
conventional means, there’s plenty in money supply data which inflates stock prices.
See you tomorrow and have a pleasant evening.
Disclaimer: The ETF
Digest maintains positions in: SPY, QQQQ, IEF, DVY, IGN, HHH, FDN, GLD, PZI,
PZJ, EWW, EWZ, EWA, EWC, EWP, FXI, EWM, IFN and Bombay Stock Index.