4.25.08

    4.25.08

              For the week just past there were over 150 S&P 500 companies that reported earnings for the quarter. Some were good and some were bad. The worst of the lot was Ambac Financial the bond and mortgage insurer. The street expected them to report a loss of $1.51. Instead they showed a loss of $6.93 and the stock got creamed.  The financial sector however finished the week to the upside by 2.1%. Take into account the fact that Bank of America disappointed on Monday, and these two events together would have sent the market down by triple digits. This is a strong          indicator that market sentiment towards financial stocks has improved.  

            We are still faced with the problems in the oil sector. At $120 a barrel it is raising havoc in many of the other areas of the economy. Airlines are the most visible because we all use them and see the effects each time we fly. Ticket prices keep going up and up. As more people are priced out of the market it hurts the airlines. Go to the grocery store and you find that every single item on the shelves have gone up in price. It costs money to deliver goods to the retailers and that cost gets passed along to the consumer. Most of the problem, as I see it, is we urgently need to address the oil situation ASAP. Let’s hear from the 3 running to become our leader. That’s were we need to see who they are. When is the last time any of them went shopping for bread, eggs or milk?

             What do we think about the current market conditions? Well they are showing some good signs, but at the same time we must need to be cautious. There will be a big break out to the upside sometime and we would want to partake in that move. There is a huge amount of cash sitting on the sidelines. Money market funds are at an astonishing $3.25 trillion dollars. The entire stock market is only worth $13 billion. If a real rally starts and investors start feeling that the worst is behind us, we have a chance see a real melt up type of rally.

             For right now we are 100% in cash and will be looking for a reason to go long. Maybe as soon as later this week? 

   Till next time 

The MTA Staff