Monday, September 17, 2007
Fight Back
Stocks battled back Friday to see mild gains after a quite rough start to the session. The Dow ended the session with a gain of 17.64 points to close at 13,442.52. The SPX added a fraction of a point to 1,484.25.
Friday got off to a tough start following the release of the retail sales data for August. Sales grew 0.3 percent, but this was half of estimates with non-auto sales falling 0.4 percent. This news brought up talk of a recession once again and further lifted the odds of a possible 50-basis point cut by the Fed next Tuesday. Ironically, consumer sentiment was actually a bit better than expected in early September. Again go figure!!!!
The University of Michigan reported that its sentiment index rose to 83.8 during the month, up from 83.4 in August. Though not a huge gain, traders seemed to be pleased with the fact sentiment rose at all. However, record high oil prices are bound to push petrol prices higher at the pumps and this could hurt sentiment later on in the month.
Another concern Friday was news that the Bank of England had to provide emergency funding to Northern Rock, a fairly large UK bank which is the fourth largest mortgage provider in the UK. The company blames the world wide credit crunch for its action, which reminded traders of the problems that still remain. I suspect we haven't heard the last of this saga as as I type Monday morning a run on the bank looks a remote possibility.
However, despite all this negative news, traders pushed the major market indices higher this past week.
For this week we have the Fed meeting on Tuesday and the release of the results of the big banks.
For the Fed a 25-basis point rate cut seems to be priced into the market....seems being the key word here. Who knows what will happen after they release their statement?
For the Banks this group is viewed by many to be a leading barometer for the overall market due to their role in the financial markets. Additionally, as current notable underperformers due to their exposure in the credit-market debacle, those reports will likely take on added importance with Wall Street.
As for WHR that fell 0.37 to end on $91.20. We are in the green and looking ok.
It will be an interesting week.
Until next time.
Friday got off to a tough start following the release of the retail sales data for August. Sales grew 0.3 percent, but this was half of estimates with non-auto sales falling 0.4 percent. This news brought up talk of a recession once again and further lifted the odds of a possible 50-basis point cut by the Fed next Tuesday. Ironically, consumer sentiment was actually a bit better than expected in early September. Again go figure!!!!
The University of Michigan reported that its sentiment index rose to 83.8 during the month, up from 83.4 in August. Though not a huge gain, traders seemed to be pleased with the fact sentiment rose at all. However, record high oil prices are bound to push petrol prices higher at the pumps and this could hurt sentiment later on in the month.
Another concern Friday was news that the Bank of England had to provide emergency funding to Northern Rock, a fairly large UK bank which is the fourth largest mortgage provider in the UK. The company blames the world wide credit crunch for its action, which reminded traders of the problems that still remain. I suspect we haven't heard the last of this saga as as I type Monday morning a run on the bank looks a remote possibility.
However, despite all this negative news, traders pushed the major market indices higher this past week.
For this week we have the Fed meeting on Tuesday and the release of the results of the big banks.
For the Fed a 25-basis point rate cut seems to be priced into the market....seems being the key word here. Who knows what will happen after they release their statement?
For the Banks this group is viewed by many to be a leading barometer for the overall market due to their role in the financial markets. Additionally, as current notable underperformers due to their exposure in the credit-market debacle, those reports will likely take on added importance with Wall Street.
As for WHR that fell 0.37 to end on $91.20. We are in the green and looking ok.
It will be an interesting week.
Until next time.
# posted by Paul @ 1:45 AM 
