Week in Review
A quick look back on the week that was...
Last Friday's hawkish tone left a "sour" taste with the Bulls, but the "Four Sisters" were able to get back on track this week behind "sweet" words from Fed Chairman Bernanke and a wave of buybacks and acquisitions. And speaking of sweet, isn't it appropriate that Bernanke gave the Four Sisters a Valentine's Day lift as Wall Street's love obsession with the new Fed Chairman continues to grow? Further supporting the tape were 3M (MMM), Caterpillar (CAT), and Honeywell (HON) announcing major stock buybacks over the next several years. With spreads between corporate bonds and treasuries historically tight, stock buybacks and M&A will be a trend to follow closely.
On a closing basis, the DJIA, SPX, and NDX were able to close above the mentioned short term resistance levels outlined in this week's Morning Cup of 'Jo.
The dovish language from Bernanke sent the dollar lower and gave a lift to the precious metals and bonds. Gold is currently trading right below a key technical level of $675 and the past several sessions have seen some profit taking. A close over $675 for the "yellow fellow" would flash a bullish signal. Lastly, Dow Theorists have plenty of reasons to smile as the DJT confirmed its breakout from two weeks ago as rails exhibited strong leadership for the group.
The Four Sisters Performance
Federal Reserve chairman, Ben Bernanke maintained his position on inflation readings. "There are some indicators that inflation pressures are beginning to diminish," Bernanke said Wednesday in his testimony before Congress. (Wed 14th)
Aluminum giant Alcoa (AA) jumped as Wall Street speculated on rumors of a takeover. (Tues 13th)
Struggling automaker Daimler Chrysler's (DCX) shares were up close to 5% as rumors of a General Motors (GM) takeover circulated the Street. (Fri 16th)
Dow components 3M (MMM), Honeywell (HON), and Caterpillar (CAT) announced plans to repurchase shares. (Fri 16th)
Producer Price Index fell 0.6% in January due to lower energy prices. The drop is in line with expectations, and should not conflict with the Fed's current position on inflation. (Fri 16)
Coca Cola (KO) shares declined despite exceeding analyst expectations, as the beverage maker continues to lose domestic market share. (Wed 14th)
John Deere (DE) shares rallied as the farming equipment leader realized success in the global market. (Wed 14th)
Guess? (GES) share price was up more than 10% as earnings smashed expectations, with potential for growth ahead. (Thurs 15th)
Campbell's Soup (CPB) shares hit a 52 week high following its earnings announcement. (Fri 16th)
Goodyear (GT) reported a $358 million dollar loss in 4Q due to lost market share resulting from labor strikes. (Fri 16th)
Chipotle Mexican Grill (CMG) 4Q profit sent shares up almost 5% to levels not seen since May '06. (Fri 16th)
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