Wednesday, August 08, 2007

The Bellwethers Are Back

We know that the Fed didn't really give us the ammo we were looking for to stoke this market, so the credit for this morning's rally has to go to the Cisco Kid (CSCO), which reported a strong quarter, raised guidance, and gave a bullish outlook on the global tech economy.

This is helping the entire tech sector bounce, but the group that is really leading the charge is the brokers (+4.1%). Bargain hunting in the sector has likely exacerbated short covering, and that is proving a lethal combination for the bears.

The Fed decision is now behind us, and with earnings season winding down, the stock market will focus more on economic news and Treasury action. For its part, the 10-year yield is up a bit to 4.84%. The uptick is not all bad, as it signals renewed confidence that the economy won't slow too much.

Oil is trading lower again, down near $72.20, so this is not a headwind right now either. Let's hope we don't get any bad hurricanes in the near future.

As for Asia, markets there were up sharply overnight, giving our markets another boost at the open. I don't know how long this oversold rally can last, but it is exactly what I was looking for coming from the panic selling we saw last week.


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