Minyanville's Market Recap: Bulls Still In Charge, Markets Edge Higher
Investors were met with a bit of negative economic news today, yet the markets still edged higher.
Although global indexes ended positive, investors may have been thrown off by news of the European Central Bank's emergency fund, which attracts a rate of 5%, being tapped in the morning for €3.9 bln. (From FT) In addition, news of the Fed injecting a total $38 bln in short term liquidity also concerned investors. The amount was the largest sum since early August, the height of the credit turmoil. For more color, read an exchange between Toddo and Minyan Peter in How European Banks Affect The U.S.
Moving on, despite significant negative news, homebuilders actually gained on the day. Sales of existing homes came in at 795 k less than consensus estimates of 825 k. The figure marked an 8.3% decline to the lowest level in more than seven years. In addition, prices plunged by the most since 1970. (From Bloomberg) However, the Philadelphia Housing Sector Index (HGX) added +1.66% today. Notable stocks include Ryland Group (RYL) and Toll Brothers (TOL) adding +1.6% and +2.25% respectively. Professor Depew talked about "the surprise in unsurprising surprise decline" in New Home sales. Click here to read his comments in his daily column, Five Things You Need To Know.
Investors also saw signs of a waning economy in other bits of economic data released today. GDP figures came in slightly less than expected at +3.8 % versus +3.9% consensus although the Labor Department did announce that weekly jobless claims fell 15,000 to 298,000 on a seasonally-adjusted basis. (From WSJ) The negative data didn't seem to affect the financials. The Philadelphia KBW Bank Index (BKX) added +0.61%. Other notables were Goldman Sachs (GS) adding +1.01%, Morgan Stanley (MS) adding +2.51%, and Lehman Brothers (LEH) adding +2.32%. Bear Stearns (BSC) broke from the pack after news broke that the company was not in talks with Warren Buffet or other investors in selling a minority stake. Toddo wrote on the Buzz late in the afternoon that whether the news will matter today, "it's worth nothing that… Bear is off 3% (still considerably higher than it was yesterday morning) but, as it stands, it hasn't pulled its brokerage brethren lower in synch." BSC closed down -1.50% for the day. For more on Toddo's ideas, click here to read his Random Thoughts.
For more of an in-depth summary of what happened today on the Buzz, please read our Buzz Bits.
On tomorrow's radar, investors will be busy digesting the plethora of economic information. See below for the list of events and click here for the full trading radar.
8:30 Personal Income: 0.4% cons
8:30 Personal Spending: 0.4% cons
8:30 Core PCE Inflation: 0.2% cons
9:45 Chicago PMI: 53.5 cons
10:00 Construction Spending: -0.1%
10:00 Michigan Sentiment-Rev: 84.0
Below is a recap of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.
Some bullish trade or investment ideas: AMLN, BBG, KBH, Gold/Silver, CMC, CHK, NVDA, STLD, CAM, NVT, HOKU, CRK, BZH, DVN, BOW, SPX, ACL, CTXS, APA, KSS
Some bearish trade or investment ideas: RAD, Equity Indexes, DFS, CCJ, Oil, Retail, FXI, BSC
Hope y'all had a great day. Maybe we'll see some of you at the Havard club later for Freeman Days. Have a good night!
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