Monday, November 19, 2007

Monday Morning Musings

After the strong finish on Friday, I sure didn't expect this this morning. Nor did I expect to arrive at my office Monday morning to find all of the power out and the building non-functional. Luckily, I live close by, so I turned around and headed back home. Frustrating.

The markets are selling off again this morning, after Goldman Sachs (GS) downgraded Citi (C) to Sell, and also downgraded a number of other brokers. This started the selling in the financial sector.

There is also rumors about more unwinding of the yen carry trade, as the yen is higher this morning. And this seems to be taking its toll on some of the groups that are still up the most this year, such as the commodity/mioning stocks.

Also, there was some news that Chinese regulators have asked Chinese banks to cool lending to avoid an overheating of their economy. This helped cause a selloff overseas, as the Asian markets were down nearly across the board overnight.

There was some good news in the form of renewed M&A activity over the weekend. Celgene (CELG) bid Pharmion (PHRM) for $2.9 billion, SABMiller offered $1.2 billion for Grolsch in the beer industry, and TomTom offered $4.2 billlion for TeleAtlas in the GPS arena. Normally, this would have a positive affect on the market, but this morning it doesn't seem to matter much.

The ARMS Index is very high currently, and the put/call ratio is back up near extreme readings after being high all last week. Let's see if this can help stem the selling, and maybe the market can firm a bit into the close.


At 4:55 PM, Blogger S said...

I am long but all indications are that there might be no year-end rally this year. Market looks like it'll breakdown from here. What do you think?

At 11:20 AM, Blogger J. Kahn said...

Hey S. I am still looking for a year-end rally. I have been a little early, but the market is very oversold here.


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