Week in Review: June 6. 2008
A look back at the week that was.
The wild ride on Wall Street got a bit wilder this week after Thursday's pop and Friday's larger drop. We have warned that risk levels remain extremely high and perhaps this sentiment is best reflected by the Banking Index (BKX) hitting a 5-year low this week. With the banks in horrid technical shape, it appears that the short-term support level of SPX 1375 will not hold. The next level of support lies below at SPX 1325 with the 2008 lows of SPX 1275 as major support.
In light of Friday's technical damage, I feel it appropriate to direct you to a piece I wrote two weeks ago highlighting the "re-test" of the cyclical bull market break which occurred in January. Keep this piece as a frame of reference as we enter into the latter part of the year. Enjoy the weekend as history is tested once again at the Belmont tomorrow.
The Four Sisters Performance
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The Labor Department reported a spike in the unemployment rate to 5.5%, the largest monthly rise since 1986. However, payroll losses were not as great as analysts expected. (6/6)
The Board of Directors at Wachovia (WB) ousted CEO Ken Thompson after increased losses at the bank. (6/3)
Senator Barack Obama assumed the title Democratic presidential nominee after a historic and challenging contest against Sen. Clinton. Polls show a tight race between Sen. Obama and Republican nominee McCain. (6/4)
Oil prices hit another high on the heels of dollar drop, tension in the Middle East, and a Morgan Stanley analyst note. (6/6)
After leaving interest rates unchanged for the month of June, it now appears the hawkish European Central Bank will raise interest rates next month to curb inflation expectations. (6/5)
Homebuilders Toll Brothers (TOL) and Hovnanian (HOV) posted better than expected losses but gave cautious outlooks. (6/3)
Retail sales largely beat estimates in May with discount retailers leading the way as the consumer tries to navigate through these difficult times. (6/5)
Geopolitical tension mounted on Friday after Israel said it will not hesitate to attack Iran if they continue to develop nuclear weapons. This was the main catalyst that drove crude $10 higher on Friday.
Market Movers: Winners & Sinners
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