Archive for April, 2010
The Market Explodes Upward
Posted by Jody Eisenman | Filed under Uncategorized
In a continuation of the ongoing rally, the Dow Jones shot up another 102 points today, the biggest move since a 122 point gain on March 5. The S and P 500 crossed 1200 for the first time in a year and a half. These powerful moves have caught most people, including yours truly, by surprise. Although the market is probably overdue for a correction, any small sell off is immediately met by another surge of buying. Although the unemployment rate remains high, the real estate market is still uncertain, and Bernanke continues to ward about the US debt problems, no one on Wall Street seems to care. I get calls from people constantly who are amazed at the depth and breadth of this rally.
Before the opening, Intel and JP Morgan reported better than expected quarters. As such, most of the banks and semiconductors had a strong day on the upside. One of strongest was Citicorp, which rose another 31 cents today to close at $4.93. The stock was trading close to $3 two months ago. On the other hand, Citicorp is still way off its’ high of $50 less than two years ago.
Trying to go short in this market this year has been suicidal. On the other hand, statistics show that the average investor has not really participated in this rally unless they never sold on the way down. Many investors still do not believe that the market is the place to be. With that healthy dose of skepticism in place, it would seem that the market may continue to move higher.
Earnings Season Begins
Posted by Jody Eisenman | Filed under Uncategorized
Once again, earnings season is upon us, starting with Alcoa who reported numbers basically in line after the close. The market closed above 11,000 for the first time since September 2008. In addition, stock and bond markets were aided by the Greek bailout plan. In actuality, I was somewhat surprised by the lack of the rally in the emerging debt markets, where the Ishares Global Emerging Market ETF (EEM) actually closed down slightly. As I have stated several times, the market appears technically overbought to me, but still continues to climb. However, many prominent companies such as Intel and Bank of America are due to report this week. In addition, current Bloomberg estimates for S and P 400 earnings are expected to show a 30% increase from last year. These earnings over the next few weeks will go a long way toward showing whether the market will continue to climb, or pause for a breather.
