S&P 500 1,144.94 unch.
NASDAQ 2,029.82 -.14%
Leading Sectors
Homebuilders +2.75%
Iron/Steel +2.03%
Fashion +1.22%
Lagging Sectors
Airlines -.66%
Hospitals -.72%
Semis -1.49%
Other
Crude Oil 36.16 +1.83%
Natural Gas 5.42 +.46%
Gold 396.80 +.33%
Base Metals 113.05 +.13%
U.S. Dollar 87.31 -.40%
10-Yr. Long-Bond Yield 3.97% -1.57%
VIX 14.55 -1.89%
Put/Call .72 +14.29%
NYSE Arms 1.33 +51.14%
After-hours Movers
None of Notes
Recommendations
Janney Montgomery cut ILXO to Hold from Buy. Goldman Sachs recommends buying the Yen vs. the Euro. GS also recommending to go long Puts on June WTI crude with a 29.00/bbl. strike. Goldman expects crude to reach $26.00/bbl. by June. GS is revising their average summer NYMEX natural gas price forecast up by $.75/mmBtu to $5.25/mmBtu.
After-hours News
U.S. stocks were mixed today, as semis led tech lower with most other sectors showing strength. The yield on the U.S. 10-yr. Treasury note fell today as the revised GDP deflator showed little inflation. As well, Fed Governor Bernanke told reporters yesterday the Fed will be "patient and watch the data to see how things continue" on inflation. The U.S. Congressional Budget Office says that President Bush's budget request to Congress would cut the deficit in half by 2007. Deutsche Bank's 40-story tower next to the World Trade Center site will be sold to New York state for $90M and demolished to make more room for redevelopment at Ground Zero.
BOTTOM LINE: The Portfolio finished the day about even. I covered a few cyclical shorts and sold some technology longs near the close to reposition the Portfolio, while maintaining 75% net long market exposure. Bonds are on the verge of breaking out technically. This is very strange considering the continued strength in commodities prices and all of the recent talk of inflation worries. The rotation out of tech and into consumer cyclicals seems to have a little further to go. With interest rates dropping and tax stimulus coming, investors are betting the valuations in retail and homebuilding are too low relative to tech. I expect tech to regain its leadership role in the 2nd quarter.
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