Investor’s first read – Brooksie’s edge before the open
Thursday, February 9, 2012 9:16 a.m.
DJIA: 12,883.95 S&P 500: 1349.96
Hopefully we can get Greece off Page One this week. The market has been saying “deal” since December. Perhaps a lot of the “go – no-go” crap we have been dealing with is posturing, i.e.,selling a deal. It is what it is, bite the bullet . The rest of the world has problems to solve and opportunities to exploit – enough ! Move on !
That said, news out of Europe indicates an austerity deal has been reached. If so, my comments above are moot. However, there will be a reaction by the Greek public, and second thoughts about the effectiveness of a “deal.”
The doomsters can look bad on this one, especially if the stock market plods ahead without a meaningful correction. They will try to blow holes in any Greek deal announced.
It looks like institutional money is steadily accumulating shares, looking out beyond current news and paranoia to better times.
Volatility has taken a back seat, for the moment, so opportunities to pick up shares on a correction are not giving money managers the opportunities they need, ergo, they must “reach” for targeted stocks.
That does not preclude a sharp correction, but it does strongly suggest buyers on dips.
Put yourself in the position of a money manager for a moment, with or without the six figure income. You must make money for your clients, or else. Do you sit there hoping for a better price, or do you buy ? Most of the time investors finds themselves “hoping” for a stock to go up, or down, it’s not going to happen.
CONCLUSION: I believe there will be a stampede of investment money out of “safe” havens (money markets, treasuries, bonds, etc.) into stock. For some, it will be a pretty sight, for others pain. Pain for long-term bond holders who will see portfolio losses mount and sideline sitters watching and hoping for a chance to buy at prices that won’t be seen again.
WHEN WILL THIS HAPPEN ?
Odds say it is happening now. If not now, soon. It may take a little more time for it to sink in and investors in safe, “yield-less” instruments to capitulate. Meanwhile, I suspect the BIG money is there buying the future.
- ICSC Goldman Store Sales (7:45 a.m.) by major retailers which account for 10% of total store sales.
- Consumer Credit (3:00 p.m.) –Consumer credit jumped $20.4 billion November.
- MBA Purchase Applications (7: 00 a.m.)as a measure of applications at mortgage bankers, this index provides leading indicator of single family home sales and housing construction.
- Jobless Claims (8:30 a,m.) Initial claims dropped 12,000 for the week ending Jan. 28 to 367,000. Obviously “down: is good.
- Wholesale Trade (10:00a.m.) – slowed to 1 0.1 percent gain, Inventory/sales ratio holding at 1.15.
- International Trade (8:30 a.m.) Trade gap widened in Nov. due to jump in oil imports and dip in exports. The index is comprised of merchandise and services
- Consumer Sentiment (9:55 a.m.) Rose in the final week of January, Sentiments have been soaring since July.
Jan 23 DJIA: 12,720 “Europeans Seeking Long-Term Economic Cure“
Jan 25 DJIA: 12,675 “Consolidation, Correction Likely though US Stocks Hold Strong Against EU Turmoil“
Jan. 26 DJIA: 12,756 “Fed Would Raise Interest Rates If Inflation Picks Up“
Jan. 27 DJIA: 12,734 “Warning! Tradable Market Action Lies in Waiting“
Jan. 30 DJIA: 12,660 ““HUGE” Week for Economic Indicators“
Jan. 31 DJIA: 12,653 “All That Is Needed Is a Spark“
Feb. 1 DJIA: 12,632 “Week’s Economic Reports Could Be The Springboard“
Feb. 3 DJIA: 12,862 “Investors Beating the Bullish Tune“
Feb. 6 DJIA: 12,845 “Follow the Money as It Exits Safe Havens“
Feb. 7 DJIA: 12,878 “Market Held Up By Sneaky Buying“
Feb. 8 DJIA: 12,883 “Is It Safe For Bulls to Come Out and Play?“
The writer of Investor’s first read, George Brooks, is not registered as an investment advisor. Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.