Market Recap

The news in the financial complex worsened on Monday after Lehman (LEH) announced a larger than anticipated write-down. The banks weighed on the tape all week as the SPX touched 1331 intraday on Thursday. The Four Sisters and especially the banks reached an oversold level setting up Friday’s rally which mitigated some of the technical damage experienced over the past 5 trading days.

What once was support now becomes resistance, so we feel that SPX 1375 will be quite an obstacle as long as the BKX remains underwater. Risk levels remain high and rallies are opportunities to lighten up on long positions.

The Four Sisters Performance



ETF Watch

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Top Headlines

The Labor Department reported a 0.6% rise in consumer prices for the month of May, the largest jump in six months largely in part to a 5.7% increase in gasoline costs. (6/13)

For the fifth time this year, the Chinese central bank raised the reserve ratio by a full percentage point to a record 17.5% in an effort to strengthen liquidity management. In response to this measure, the Shanghai stock index dove 7.7%. (6/11)

After the deal between Microsoft (MSFT) and Yahoo (YHOO) fell apart, Yahoo has turned to Google (GOOG) to strike an advertising partnership. Shareholders at Yahoo are quite disappointed in CEO Jerry Yang for not accepting Microsoft’s earlier bid of $33/share. (6/13)

The dollar gained ground this week behind hawkish commentary from Fed Chairman Bernanke. Big Bad Ben insinuated that inflation trumps growth concerns right now. (5/10)

This week was a week to forget for Lehman Brothers (LEH) as it saw its market cap decline by nearly a third between last Friday and Thursday’s close and had a management shake-up. The beaten down shares spiked 10% as shorts booked profits. (6/13)

Controversy is heating up for Anheuser-Busch (BUD) as it contemplates the offer it has received from Belgian brewer InBev (INTB.BR). Anheuser-Busch also is engaged in talks with Modelo. (6/13)

Market Movers: Winners & Sinners