Welcome to the extended version of the BAM Market Note. We are not bloggers by nature but have had clients and friends inquire about our thoughts on the market in between our newsletters. The number and content of posts will likely be determined by the conditions of the markets and the interests of our readers. We would greatly appreciate your feedback and comments.
Tuesday, July 31, 2012
Thursday, July 26, 2012
CHOPPINESS
After several days of market weakness, the bulls were inspired by overnight comments by European Central Bank President Mario Draghi. Draghi is the European equivalent to Ben Bernanke and he said that the ECB would do whatever it took to preserve the Euro. This is much the same language that the Fed has used with regards to propping up the US economy. The European markets reveled in the comments as most European indices were up 2% or more. In the US, the markets opened up strongly but have since given back some of the early gains. We will be very interested to see how the market closes today and whether or not the rally has legs into tomorrow and early next week. The market was a tad oversold and was due for a rally of some sort.
The markets remain in the broad trading range bound by S&P 1375 and 1325. Though it is a 4% gap between these levels, much of the movements in between are mostly noise until either the bulls or bears make a break one way or another. Caution is still warranted. The GDP report tomorrow morning could provide fuel for a move either way as well as the continued earnings parade. Facebook will post earnings after the close today but that will be more interesting than it is market moving. Earnings have been largely mixed with Apple's recent miss spooking the technology sector. To this point today, telecoms are a shining star with gains nearing 4% at last check. Our low volatility portfolios continue to slowly move their way upward largely avoiding the day to day gyrations. Until we get a break one way or another, it is not a bad place to be. We will have more thoughts (and maybe a little more clarity) when we send out our newsletter in the next few days.
The markets remain in the broad trading range bound by S&P 1375 and 1325. Though it is a 4% gap between these levels, much of the movements in between are mostly noise until either the bulls or bears make a break one way or another. Caution is still warranted. The GDP report tomorrow morning could provide fuel for a move either way as well as the continued earnings parade. Facebook will post earnings after the close today but that will be more interesting than it is market moving. Earnings have been largely mixed with Apple's recent miss spooking the technology sector. To this point today, telecoms are a shining star with gains nearing 4% at last check. Our low volatility portfolios continue to slowly move their way upward largely avoiding the day to day gyrations. Until we get a break one way or another, it is not a bad place to be. We will have more thoughts (and maybe a little more clarity) when we send out our newsletter in the next few days.
Monday, July 16, 2012
CALM BEFORE THE STORM?
Today has mostly been a quiet and very typical summer Monday. The market has been down from the outset but has tried to get positive all day. Volume has been very light. That could all change as we move into the rest of the trading week. Fed Chairman begins two days of questioning before Congress tomorrow for his semi-annual report. Traders will be parsing his words carefully to catch any hints of any further monetary easing (QE3). There are also a number of economic reports and options expiring on Friday (which leads to much heavier volume and volatility). Companies will also start reporting earnings in droves with many big names reporting this week - Bank of America, Goldman Sachs, Google, Microsoft, Intel, Yahoo, Qualcom and IBM to name just a few. The S&P (currently at 1352) is bound by 1344 on the downside and 1374 on the upside. A breakout either way would provide the near term direction of this market. There will be lots for the market to digest this week so hopefully we will get some clarity. However, we may be in this range bound market through the summer but time will tell.
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