Morning Call: Thursday, June 18, 2009
Good morning.
The question is how many more days like yesterday before we give it all back? The shift in sentiment switched into high gear as the market began to worry about the possibility of a 5% correction (not a biggie). There's plenty of volatility potential in front of us with a Quadruple Witch coming tomorrow and re-balancing of the S&P and the Russell. And of course Geithner will be at the Senate for market opening. Maybe fun but certainly games.
$55B in Tarp money is being repaid by Goldman, JP Morgan, US Bancorp and Morgan Stanley and that would have been huge news even a month ago. But with a warning from S&P about a "less favourable" outlook for the banks, the share prices sank. To Traders it looks like another example of sell on news. It is however part of a shift away from the Momentum Trade to trading within the Range. We don't know how long that goes on for, but the script says until Wednesday when the FED starts their 2 days of meetings. Again, when they say whatever, then we can buy again because the news is out. There is definitely a shift from commodities to Defensive. Potash exemplified that trade. US analysts had marched up their targets in the face of what seemed to be deteriorating global fundamentals. (Falling prices for farmer's end market product.)
Cramer featured Potash and Agrium front and centre last night. The catalyst was K&S dropping prices by more than 20% on some products. Potash stock came off 10% showing that the selling was by US investors. Cramer also said some really bad things about a Natural Gas ETF with symbol UNG. He used words like "manipulation". Stay tuned.
Two events that we noticed were that UBS analysts’ team was number #1 for the ninth successive year. Not bad for a place that could blow up if the IRS has its way. (Read Bloomberg magazine July 09). The other was the arrest of two Japanese gentlemen that were bringing a few treasury bonds into Switzerland neatly packed in the false bottom of suitcases. $135B of neatly folded Treasuries. You could buy several countries with that. Where did it come from? What if it is deemed to be in contravention of the RICO statutes? You can seize the proceeds from criminal activity can't you? This should be front page news.
$55B in Tarp money is being repaid by Goldman, JP Morgan, US Bancorp and Morgan Stanley and that would have been huge news even a month ago. But with a warning from S&P about a "less favourable" outlook for the banks, the share prices sank. To Traders it looks like another example of sell on news. It is however part of a shift away from the Momentum Trade to trading within the Range. We don't know how long that goes on for, but the script says until Wednesday when the FED starts their 2 days of meetings. Again, when they say whatever, then we can buy again because the news is out. There is definitely a shift from commodities to Defensive. Potash exemplified that trade. US analysts had marched up their targets in the face of what seemed to be deteriorating global fundamentals. (Falling prices for farmer's end market product.)
Cramer featured Potash and Agrium front and centre last night. The catalyst was K&S dropping prices by more than 20% on some products. Potash stock came off 10% showing that the selling was by US investors. Cramer also said some really bad things about a Natural Gas ETF with symbol UNG. He used words like "manipulation". Stay tuned.
Two events that we noticed were that UBS analysts’ team was number #1 for the ninth successive year. Not bad for a place that could blow up if the IRS has its way. (Read Bloomberg magazine July 09). The other was the arrest of two Japanese gentlemen that were bringing a few treasury bonds into Switzerland neatly packed in the false bottom of suitcases. $135B of neatly folded Treasuries. You could buy several countries with that. Where did it come from? What if it is deemed to be in contravention of the RICO statutes? You can seize the proceeds from criminal activity can't you? This should be front page news.
So Sorry no Mo. So until we get our MoJo back…………….. stay on the sidelines.
Solar and Sunny Thursdays
Solar and Sunny Thursdays
The Canadian Government has released their plan for a Cap and Trade scheme for CO2. The system is very much modeled after the EU’s scheme. Details may be found at: http://www.ec.gc.ca/default.asp?lang=En&n=714D9AAE-1&news=23C6502E-4307-4647-A5C7-38B3B7EDDDF0
QID US EQUITY (Bloomberg): UltraShort QQQ ProShares is an exchange-traded fund incorporated in the USA. The fund seeks daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of the NASDAQ-100 Index.
Quote of the Day:
"Nature gave men two ends -- one to sit on, and one to think with. Ever since then man's success or failure has been dependent on the one he used most."
--Robert Albert Bloch
--Robert Albert Bloch
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.
