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02.10.10
Thanks to the Euro - Pre Market

Yesterday we concluded that bad news had already done a reasonable amount of damage to the indices, setting up conditions for a rally. Sure enough it came.

The advance was attributed to indications that the EU will somehow bailout Greece, which caused a 1-2% relief rally in the Euro and the British pound, and pushed the Dollar Index down 0.7%. The good news coincided with sufficiently bearish sentiment to create short covering momentum and some bargain hunting. Currency dynamics are driving U.S. market movements these days and much of the drama occurs overnight.

02.02.10
Bounce Underway - Pre Market

The Dow rallied more than 100 points on Monday, with commodities in the lead. The ISM Manufacturing Index for January came in at 58.4, up from 55.9 in December. This is the highest reading for the index in 5 years, but don’t forget that manufacturing now accounts for less than 20% of the U.S. economy. Still, the news spurred buying in commodities. A decline in the dollar gave the hardgoods rally a tailwind.

01.14.10
Earnings Kickoff

Earnings season is upon us. The companies in the S&P 500 are expected to post ‘operating’ earnings of $15.80 per share for Q4, up from $5.62 in the same quarter last year. Operating earnings do not account for one-time charges and other types of write-downs. If the figure is attained, it would bring full year earnings to just under $60, about 10% less than 2008, but 30% less than the peak posted in 2006.