The Hanging Curve
IBM should stand for "I've Been Mushed!"
The Minx blinks out of the gate and the south side scatter is underway. The economic data was marginally better and a handful of industrials (Coca Cola (KO:NYSE, Caterpillar (CAT:NYSE), United Technologies (UTX:NYSE)) have some green steam. However, the outlooks from tech were rather muted and that's been weighing on the early morning mindset.
With the industrials and drugs establishing a firmer tenor and the tech tone decidedly muted, an S's over N's tape is starting to emerge. Meanwhile, the bonds are once again drippy and that continues to factor into the equity brew. If (big if) the perception of higher interest rates starts edging into the collective psychology, that could put a crimp on the rally. Yes, Brian, I understand that actual rates aren't at that level yet. I'm simply wondering when portfolio managers start factoring in the prospect.
Breadth has been stanky all morning with losers trumping winners 2:1 across the board. Again, there are areas of select jig--mostly in the industrial sector--but there's also alotta good news baked into this cake. Microsoft (MSFT:NASD) will provide the icing tonight and the Redwood deadwood will certainly help shape tomorrow's tape.
One quick little factoid before I go and this comes complements of my friend Elmo at UBS Warburg. Over the years, July 18th is the most consistent down day in equities (76% of the time). For those of you without a calendar, that would be tomorrow.
As always, I hope this finds you well
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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