Today markets again, are acting predictably. I believe for the equity indexes to trade around this range some time before continuing an upward trend. Considering the technology woes with weak earnings reports, the nasdaq is not lagging significantly at the start of the day. Though, technology stocks and the ^soxx are suffering. Despite Bernake's statement about subprime losses i expect, by now people have already hedged positions, or the markets priced in such losses. As we can see today the markets are reacting to other news such as M&A action, Strong earnings reports, and steady economy. More specifically having a tight labor market. Most interestingly Bonds are reacting to housing statements made by Bernake, as the dollar strengthend agaisnt the euro and yen. It is no doubt that housing is a drag, but not enough so far to choke the economy, there is in my opinion, no reason for the Feds to raise rates at this point. This is quite possible we will be on hold if the economy keeps up, and housing keeps dragging through the next year.
I would like to note, about early on my poisition on energy specifically oil, it is often a newbie as myself, gets to intangled with his own ideas and ignores what is actually happening, It is perhaps as i said in my Eton Park entry, that summer seasonality is still holding strong, and i when writing my report already missed the slight down turn. I expect oil to stay in the mid 70's range until people start pricing in for the upcoming winter. (oil referencing to light sweet crude).
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