Friday, March 14, 2008
Bear Feeds the Bears
To be honest I always find it a little hard to post when we have no play on. What have we missed since the last post. Well the biggest one day rise on the SPX Wednesday; over 47 points!!
And since then all those gains have been given back!
Today there was much better than expected economic news..but it didn't matter. The Banking crisis came back to haunt the markets. The Dow fell 194.65 points to close at 11,951.09. The SPX lost 27.34 points closing at 1,288.14.
Economic data was supposed to be the focus Friday, but Bear Stearns (BSC) stole the spotlight. This major financial player saw its shares fall a WHOPPING 47.37 percent to a price of $30. This took more than $3 billion away from BSC’s market cap. The stock suffered after the company stated that its liquidity had deteriorated severely in the past 24 hours. S&P also lowered its rating on the company’s debt, leading to news that JP Morgan Chase (JPM) would work with the Federal Reserve Bank of New York to provide a secured loan facility for an initial period of 28 days. JPM shares fell 4.12 percent on the session, hitting a 52-week low on the way. I trade BSC all the time and it was only a few months ago that its share price was over $100!!! How the mighty have really fallen.
Economic data was actually better than expected on the session with consumer prices flat during February overall and at the core. This was better than expectations for growth of 0.3 percent overall and 0.2 percent at the core.
Consumer sentiment was also a bit better than expected with the University of Michigan index coming in at 70.5 in mid-March from 70.8 in February. Estimates were for the sentiment index to fall to 69.5, but the current reading is still very low historically. Within the report, the one-year inflation expectations jumped 0.9 percent to 4.5 percent. However, the five-year figure fell a tenth to 4.5 percent.
The SPX finished the week slightly down. Next week again is another biggie with the Fed meeting Tuesday.
Until next time.
And since then all those gains have been given back!
Today there was much better than expected economic news..but it didn't matter. The Banking crisis came back to haunt the markets. The Dow fell 194.65 points to close at 11,951.09. The SPX lost 27.34 points closing at 1,288.14.
Economic data was supposed to be the focus Friday, but Bear Stearns (BSC) stole the spotlight. This major financial player saw its shares fall a WHOPPING 47.37 percent to a price of $30. This took more than $3 billion away from BSC’s market cap. The stock suffered after the company stated that its liquidity had deteriorated severely in the past 24 hours. S&P also lowered its rating on the company’s debt, leading to news that JP Morgan Chase (JPM) would work with the Federal Reserve Bank of New York to provide a secured loan facility for an initial period of 28 days. JPM shares fell 4.12 percent on the session, hitting a 52-week low on the way. I trade BSC all the time and it was only a few months ago that its share price was over $100!!! How the mighty have really fallen.
Economic data was actually better than expected on the session with consumer prices flat during February overall and at the core. This was better than expectations for growth of 0.3 percent overall and 0.2 percent at the core.
Consumer sentiment was also a bit better than expected with the University of Michigan index coming in at 70.5 in mid-March from 70.8 in February. Estimates were for the sentiment index to fall to 69.5, but the current reading is still very low historically. Within the report, the one-year inflation expectations jumped 0.9 percent to 4.5 percent. However, the five-year figure fell a tenth to 4.5 percent.
The SPX finished the week slightly down. Next week again is another biggie with the Fed meeting Tuesday.
Until next time.
# posted by Paul @ 5:41 PM 
