7.20.07

7.20.07

            The week was again somewhat of a mixed bag with Monday finishing with some indices up and others on the downside. The sub-prime mortgage problems continued to hurt the Financial stock index with little or no effect on the rest of the market. Year to date the financial sector is down about -2+% while the other nine sectors of the SP are up close to 10% on average. On Tuesday it was again a mixed market with the Dow up, but all of its move to the upside was due to AXP (American Express). With both Yahoo and Intel posting disappointing quarterly results after the close Tuesday, markets moved lower Wednesday morning but showed resilience by recouping most of their losses by day's end. Positive earnings news from IBM lifted stocks on Thursday, with the Dow Jones Industrial Average closing at a new all-time high, right above the 14,000 mark. Google reported a rare earnings miss after the close, setting a negative tone for Friday's trading. Stocks indeed succumbed, with small caps taking the brunt of the selling.

            We are still on a BUY signal, and the PPP was removed last week, but we are still ultra conservative in our own accounts with only half of our money invested. We are 25% each in the Rydex SP 500 and the NDX. So far the earnings seasons has been somewhat of a disappointment with Intel and Yahoo and Google all putting a damper on the upside. Add to that the sub-prime troubles and it’s a wonder that the market is still showing some resilience. The Russell 2000 (R2K) has been the weakest indicating that money is moving out of the small cap area and into the Tech area. The NDX was the only major index that showed any gain for the week (+0.18%), while the R2K was down 2.25% for the week.

Till next week

The MTA Staff