Buzz Bits: Dow, Nasdaq Jump
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The Latest News from Stagflation Town - Lance Lewis - 3:53 PM
1) Note that spot gold has now confirmed the HUI's new high for the year with one of its own. See the chart here.
2) A more inflationary CPI tomorrow could provide a catalyst for upside acceleration in the yellow metal as well as more downside acceleration in the dollar index. Also note that the dollar's increasing weakness wasn't even mentioned by the G7 over the weekend. That's a tacit approval of the move by the powers that be. Additionally, note that gold completely ignored more chatter last night about the IMF potentially selling gold and rallied today despite it.
A more inflationary CPI tomorrow could also cause potential problems for the equity market if the data triggers more weakness in the bond market. The result would be downside acceleration in Dow/Gold ratio that you see here...
Position in gold, gold shares
Still not quite a "Best" Buy... - Jeff Macke - 3:11 PM
Poking through some of the strong retailers today, I note that Goldman Guru Matt Fassler upgraded Best Buy (BBY) from "Neutral" to "Buy," though he kept a price target of $56.
I've spoken of BBY on Fast Money where I offered that I thought the chain could beat earnings estimates (correct!) and surmount the $50 price level (wrong!) in the April time frame. With the stock well under my strike price target and four days until expiration, the trade isn't going to work but a BBY investment (meaning "Longer than 12-months") still might, in my opinion.
From where I'm sitting, Best Buy is far and away the class of the electronics world. Think of Circuit City (CC) as AMD to Best Buy's Intel (INTC); CC gets uppity for brief periods of time every now and again but, at the end of the day, it's Best Buy's world and CC barely gets to live in it.
While I've purged my book of trading retailers, I am always looking to add investment ideas (to go with my JWN and SWY positions). With BBY down nearly 20% over the last 52 weeks, there's plenty of "the consumer is dead" thinking already in the shares. As an opinion (always distinct from advice), BBY can work from these levels, for those with Patience.
Position in JWN, SWY
Some Big Stats on Commodity Demand & Inflation - Sally Limantour - 2:11 PM
- China imports hit a record high in March at 76.6 bln. Imports are up a mere 500% from five years ago. Crude oil jumped 8.9% in March from a year ago.
- Due to a large trading surplus, China is going on a buying spree. They are expected to spend $12 bln in US agriculture and industrial goods.
- In 2006, China's imports cooled a bit as and the commodity indexes went flat.
- That's called consolidation.
- Base metals have lead the commodity advance with nickel as the front runner..
- India has 1.1 bln consumers and the economy is growing at 9.3% - fastest pace in 18 years.
- Above the 6.5-8% rate is the level economists say will ignite inflation.
- The Reserve Bank of India (RBI) has inflated M3 by 22% from a year ago levels.
- From April '06 to Feb. '07 exports grew by 19% or 109.1 bln.
- From April '06 to Feb '07 India's imports were up 28% to 165 bln. (note: India's imports in Feb. only 20% of China's 77 bln.
- Bottom-line: There is a price tag for a stronger economy and exploding money supply - Inflation
Noah's Lark! - Todd Harrison - 9:20 AM
Greetings from Rubyville where I'm currently stuck in the warm confines of Del Boca Vista. Despite Herculean efforts to return to NYC, Mother Nature (and Jet Blue) had a different agenda. While I won't get much sympathy from my tri-state brethren (some of whom were up all night battling floods), take me at my word that I would much rather be strapped into my turret as we ready for this fresh five session stretch. Some broad Monday thoughts...
- This week is an earnings and expiration extravaganza and one that should see a fair amount of volatility. Minyans know that we've been looking at four levels of near-term lore (S&P 1450, BKX 113.50, HGX 218 and GS 210) and they remain rudders as the animals climb on board, two by two.
- I enter this week with a spate of individual situations (centered in the gold sector (including GSS), along with a slab of SunMicro and some Boots & Coots for schvitz and giggles) positioned against my fair share of S&P puts (most of which I failed to roll last week). I've got one eye on the clock (T-minus four days till expiry) and the other on my levels as we kick off this fete.
- Sectors to watch this week include the financials and homies, both of which 1) haven't "confirmed" this latest leg higher and 2) remain below their 200-day moving averages. Big cap pharma, traditionally a 'safety play,' also warrants a nod as it broke out to five year highs on Friday.
- If you Google "Frustration" this morning, you may indeed find a picture of yours truly. In addition to my one, small screen (as opposed to the eight screens at my desk), I am sans trading systems and experiencing intermittent power breaks on both my laptop and, yes, my phone. Is it Mercury Retrograde or something? It sure feels that way, starting on Saturday night when the Maven and i got spanked in Blackjack. Go figure.
- Good luck Minyans and be safe--it's gonna be thin (read: illiquid) today so adjust your risk and keep your right hand up (both ways).
position in gss, sunw, wel, spx
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