Buzz Bits: Dow, Nasdaq Move Up
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Bell Buzz - Todd Harrison - 3:40 PM
- I always say that the path of least resistance is typically the path of mutual success. If last week (and today) shows anything, it's that higher asset classes and a lower greenback are just that.
- Of course, mutual success is a relative term. Foreign holders of dollar denominated assets aren't as sanguine as Stateside earners and spenders.
- The question, of course, is when that will manifest. "A higher dollar" will be a nice wink, me thinks, but that's more of a scrambled egg than a foul causation.
- It will also be quite interesting to see the collective reaction after the Fed snips rates again. For if the market fails, the crutch of further easing won't be as handy.
- Sour grapes? Nope---not in the least. I'm small potatoes with regards to my market risk, as documented in this space. I do, however, have massive systemic risk as a function of my investment in Minyanville, which is perhaps why I'm entirely more sensitive to the bigger, badder, and broader imbalances that continue to percolate.
- One day at a time, I know, which is why I spend my time chewing through our market tells. They were, and remain, mixed and drifty, so trade 'em and fade 'em seven ways till Sunday but stay disciplined and remember that the ticks will flicker much quicker once Big Ben strikes 2:15 on Wednesday.
Todd and Minyan Peter: Dollar Double Whammy - Minyanville Staff - 1:04 PM
The following is an email exchange between Todd and Minyan Peter.
Peter: I was reading through some research today from Merrill (MER) and was struck by the attached piece by Rich Bernstein. In it he looks at the commodity trade denominated across four different currencies. his concluding point being that the commodity trade appears to be much more a dollar trade than a commodity trade. With the consensus trade being continued dollar weakness, I really wonder what happens to the global equity markets should the dollar bounce. I don't know about you, but it sure feels like that Columbian coffee ad where everyone is sitting on one side of the boat.
Todd: Yes, sir---'Asset class deflation versus dollar devaluation.' We've been collectively of this view for some time.
Peter: On a related topic, I was struck by an ad by Fidelity on page 9 of this week's Barron's. It says "77% of the worlds investment opportunities are outside the U.S." In reading the footnotes it indicates that the 77% is the weighting of non-US securities in the MSCI All Cap World Free Index. Not sure about you, but I have to believe that a 23% weighting for U.S. equities is a record low. It also represents a 15% discount to our 2006 GDP weighting of 27%.
Makes me want to go back through old issues of Barron's to see if in 2001 Fidelity ran an ad stating that "Technology has its highest weighting in the S&P 500 ever. You too need to be in technology."
Todd: I'm curious what it's denominated in too. It could be a double whammy.
Peter: It's dollar denominated - so yes, it reflects the double whammy.
Big Things Ahead for Novellus Systems? - Sean Udall - 12:52 PM
Novellus Systems (NVLS) has added a billion to its existing stock buyback plan. That is a huge increase and management is clearly stating that it feels the company is under-valued. I couldn't agree more.
Additionally, while NVLS has a very strong balance sheet with over $600 mln in net cash, the fact that it increased the buyback by a billion tells me that it feels strongly about its free cash generation going forward.
Moreover, this stock has been basing for about five years and any significant move up could be larger than many expect.
Levels to Watch - Jeffrey Cooper - 10:18 AM
With Goldman Sachs (GS) at a marginal new all time high it will be interesting to watch the behavior of the S&P at the 50% pivot of the October swing which is approximately 1533.
Worth noting may be the 1-2-3 swing snapback pattern to the 1533 pivot which is typically a bearish pattern. Of course if this level is offset with conviction my guess would be another new all time S&P high. Would that be a third marginal new failing high and a nail in the coffin or a legitimate new leg is the question?
The index recaptured this pivot in the early going but a dip and stick (a dip stick?) back below could prove telling especially if the Big Tell in the Sly uh Sky Goldy soups back below its old high, probing the REIT's on the dark side here.
Names I trade there are Avalon Bay (AVB), Essex Property Trust (ESS) and Simon Property Group (SPG) for example.
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