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Week in Review


A look back at the week that was.


Market Recap

The "Four Sisters" were able to start the week on good footing as "Merger Monday" returned and tech bellwether Oracle (ORCL) delivered strong earnings. Wednesday's Fed policy statement delivered another blow to the bears as they were left scrambling to cover shorts as the "Four Sisters" staged a breakout over their short-term resistance levels. The Fed's softening bias initially sent bond yields sharply lower, but they rebounded later in the week after further consideration of the Fed's stance on inflation.

I remain pessimistic with regards to the recent technical action in the equity markets. Most of this week's gains can be attributed to short covering, not institutional money flows. As the "Four Sisters" sit under their late February highs, it is important to remember the technical damage experienced a few short weeks ago will take time to correct … not three weeks.

The Four Sisters Performance

ETF Watch

Top Headlines

The Federal Reserve left interest rates unchanged at 5.25% this week and gave investors a reason to cheer by hinting toward a possible ease of interest rates in the future. (Thurs 22)

Kraft (KFT) was added to the S&P 500 on Friday. (Fri 23)

Sub-prime woes have led to tighter mortgage lending standards, which may prevent many from obtaining a mortgage, possibly furthering the demise of the housing market. (Fri 23)

Private equity giant, Blackstone Group, filed for IPO. (Thur 23)

Housing Starts rebounded over 9 % in February, but remained substantially lower from February of 06'. Existing Home Sales were up in February providing some encouragement, but not enough to send investors shopping as many suspect the housing market has another leg down. (Tues 20 & Fri 23)

Thursday's release of the Leading Economic Indicators suggests "choppy growth" in the coming months. (Thur 22)

Crude oil futures extended this week's gains to trade over $62/bl Friday as Iran seizes 15 British personnel off the coast of Iraq, sparking concerns of turmoil in the Persian Gulf. (Fri 23)

Jobless claims declined to a six week low, but many believe the number is bound to scale higher in the coming months. (Thurs 22)

Earnings Snapshot

KB Homes (KB), the number five home builder, announced an 84% decline in profit , and expects tighter lending standards and increasing foreclosures to hinder recovery in the sector. (Thur 22)

Motorola (MOT) set a new 52 week low as shares dropped more than 6% due to weak sales of its wireless handsets. (Thur 22)

Nike (NKE) shares rebounded on Friday due to expected weakening margins. The company reported an 8% increase in profit assisted by strong sales in Europe and Asia . (Fri 23)

Market Movers: Winners & Sinners

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No positions in stocks mentioned.

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