Good morning.
Markets struggled to make recovery highs. The $11B 30yr treasury auction went out at 4.72% and closed at 4.69% which has to viewed as a success. Further confidence building on the financial side came from Black Rock's $13B purchase of the iShares business from Barclays. These are thought of as some of the smartest market guys in the business and $13B is real money to commit essentially to continued market performance.
Oil made $73 and that too helped drive oil stock performance with the other commodities slipstreaming higher. The strength of the market was noticed by all players, even though Cramer declared in the evening that "Old Economy" stocks and "Value Metrics" are dead. Interestingly he talks about about of Canadian stocks. He likes Agnico and doesn’t like Newmont, which actually sounds like a pretty good pairs trade. He slagged Gildan but there didn't seem to be any new ideas in his views. He points out that Software is on a tear without many people seeming to notice and claims that housing has bottomed. Certainly we agree on software and somewhat on housing.
We had expected market strength to quarter end and have no reason to change. We might be consolidating here to make a further push higher. The market will tell us. For the time being we think that gold stocks (and bullion) look range bound. “Buy the dips and sell the flips” as the traders say.
The market should be led higher by the Financials and the Banks. The charts on oil suggest a target in the mid 80's which eventually have the C$ at par. Exxon has teamed up with TRP for the Alaska PipeLine. Yesterday when we were chatting with an Oil Industry executive we praised TRP for just getting on with it. They didn't whine about markets or their share price. Go ahead and make your acquisitions and raise the equity to finance it. Excellent! Lastly the base metals, led by Teck, are forging ahead.
Oil made $73 and that too helped drive oil stock performance with the other commodities slipstreaming higher. The strength of the market was noticed by all players, even though Cramer declared in the evening that "Old Economy" stocks and "Value Metrics" are dead. Interestingly he talks about about of Canadian stocks. He likes Agnico and doesn’t like Newmont, which actually sounds like a pretty good pairs trade. He slagged Gildan but there didn't seem to be any new ideas in his views. He points out that Software is on a tear without many people seeming to notice and claims that housing has bottomed. Certainly we agree on software and somewhat on housing.
We had expected market strength to quarter end and have no reason to change. We might be consolidating here to make a further push higher. The market will tell us. For the time being we think that gold stocks (and bullion) look range bound. “Buy the dips and sell the flips” as the traders say.
The market should be led higher by the Financials and the Banks. The charts on oil suggest a target in the mid 80's which eventually have the C$ at par. Exxon has teamed up with TRP for the Alaska PipeLine. Yesterday when we were chatting with an Oil Industry executive we praised TRP for just getting on with it. They didn't whine about markets or their share price. Go ahead and make your acquisitions and raise the equity to finance it. Excellent! Lastly the base metals, led by Teck, are forging ahead.
Stay with the Momentum and……………… Invest the money.
UYG US (Bloomberg): Ultra Financials 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 Dow Jones US Financial Index.
Quote of the Day:
"If I had eight hours to chop down a tree, I'd spend six sharpening my axe."
-- Abraham Lincoln
-- Abraham Lincoln
Ed Pennock, CFA, Managing Director
416-369-6921, epennock@dominick.ca
Graham Farrell, Institutional Equity Trading
416-369-4208, gfarrell@dominick.ca
416-369-6921, epennock@dominick.ca
Graham Farrell, Institutional Equity Trading
416-369-4208, gfarrell@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.
