Today's News and Commentary
Friday, May 16, 2008
MARKET COMMENTARY
May 16, 2008 - Market Overview
The major event on Thursday was strength in equities despite fundamental data that did not justify strong stocks. After all, Initial Jobless Claims continues to trend above 350,000, Capacity Utilization fell below 80, the Philly Fed Index continues to contract with elevated Prices Paid, and the NAHB housing market index dipped to a new record low. Some are calling stock strength a breakout, but not me.
Thursday by the Numbers
Daily
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INTERNATIONAL
Dear MKM,
There is no good book about global trading which is current on the situation now. Maybe I should write one. The older ones are all out of date.
Since they came out, the exit tax for delisting from the NYSE, ASE, or Nasdaq was removed (as a result of Sarbanes Oxley rules). So a lot of foreign ADR companies delisted. Today there are only under 400 listed ADRs in the U.S., about half the level in 2000.
Also the depositaries imposed annual fees for ADRs from some countries which...
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ENERGY
The options on the June crude futures contract expired today and the accompanying volatility was huge. Crude fell from a high of $126.64 in regular trading to a low of $120.76 at 1:PM. Almost immediately buyers returned to push the price back to $124.25 at the close and erasing much of that $6 drop.
The heightened volatility was due in part to the option expiration. The volatility is not over yet as the June crude futures themselves will expire next Monday. With the equity markets in rally mode we could see some traders long crude exit and move into equities. Many traders...
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DIVIDEND
Friday . . . On Tuesday of this week I added a preferred-stock exchange traded fund (ETF) to the Dividend Portfolio. It has low volatility, a low-expense ratio, it's not actively managed and so far the dividend contains no return of capital: nice and boring, that's what you like sometimes. With the dividend (we bought the day before the stock traded ex-dividend) and over 20 cents of price appreciation, the stock is already up some 1.56%.
Most people know that if you hold preferred stock you get paid before the common-share holders in the event of a bankruptcy or other...
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HEDGEFUND
Back in 1996 the attorney general of Texas announced, apparently in all seriousness, that “history will record the modern-day tobacco industry alongside the worst of civilization’s evil empires”; a New York Times book reviewer suggested that “only slavery exceeds tobacco as a curse on American history”; and an anti-tobacco activist and plaintiff called tobacco firms “the most criminal, disgusting, sadistic, degenerate group of people on the face of the earth”.
Certainly, smoking is a messy and shortsighted habit, and tobacco companies are not...
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Below are several sites that provide short-term guidance for
short-term traders.
Phil Erlanger's goodmorningwallst.com
Here is a link to sign up for Phil Erlanger's
goodmorningwallst.com site. He emails daily comments, education and market
commentary.
http://www.goodmorningwallst.com/
Rightside.com
Rightside.com and Chief Market Strategist Richard Suttmeier
provides daily news and commentary that could be helpful to investors and
traders. The news and commentary section is a free service. Here is the link to
the rightside.com website.
http://www.rightside.com/
Mohan's Market Force provides a daily market outlook for the S
& P Mini futures market.
Here is the link to the "Mohan's Market Force".
