Morning Call: Friday, May 22, 2009
Good morning. Markets sold off hard and gold broke out. 10 year Treasuries would normally be safe havens but they sold off by more than half a point to yield 3.355%. The UK was warned by S&P of a change on outlook for their AAA rating from Neutral to Negative. As their deficit approaches 100% of GDP, they really need an election but Gordon Brown would like to avoid it. He who hesitates is lost.
Plosser of the Philly FED was quoted as forecasting modest growth in the last half of 2009. He forecast Inflation of 3% in 2010 and 4% in 2011. The reaction was down equities and up gold. The magic number was 946 and we blew through it. Now gold has to break out above $1000 and keep going or at least that's what the stocks are forecasting. Like everything else in the market, when its game on, the game is Dash for Trash. Two weeks ago we were asked for half a dozen gold names by a London Hedgie. We chose large in ground deposits that will look appealing to a major struggling to replace reserves. One web site rated the ounces in the ground for 20 such companies and concluded the market was paying $36 an ounce on average. The cheapest was $3 and we did walkabout with them recently.
Markets should be quiet today ahead of Memorial Day which will be dead. There a big golf "do" on Monday which will ensure that nothing happens. We are at the cusp but not of another bear. Intermediate top maybe, but after that we will push higher.
So we wait to see and get ready to…………………………….Invest the money
SSO US (Bloomberg): Ultra Standard and Poor’s 500 ProShares is an exchange-traded fund incorporated in the USA. The Fund seeks daily investment results that correspond to twice (200%) the daily performance of the Standard and Poor’s Index.
Quote of the Day:
“The final test of a leader is that he leaves behind him in other men the conviction and the will to carry on.”
-Walter Lippmann
Ed Pennock, CFA, Managing Director
416-369-6921, epennock@dominick.ca
Kris Fisher, Institutional Equity Trading
416-369-6924, kfisher@dominick.ca
416-369-6921, epennock@dominick.ca
Kris Fisher, Institutional Equity Trading
416-369-6924, kfisher@dominick.ca
The above note is prepared by an Institutional Salesperson based on morning meeting comments and general Institutional desk discussion and should not be construed as a research report or a solicitation. For information purposes only. D&D Securities, its clients, and principals may have positions in these securities.
