Monday Morning Musings
The markets are lower in early trading, which is no surprise given Friday's outsized rally. I would expect some profit taking this week, but hopefully it will be minor.
The big drag today is the financials. BofA (BAC) missed its estimates and the stocks is lower. But National City (NCC) missed its estimates by a wider margin, and announced it is raising $7 billion which looks to be dilutive to existing shareholders. The stock is down -25% as a result.
In the energy patch, oil is trading slightly lower, hovering around $116.50. It briefly hit another record this morning, and is up +22% this year alone. I filled up this weekend and paid $4/gallon. Ouch.
Halliburton (HAL) and Weatherford (WFT) both topped estimates, though their stocks are down. The oil service stocks had quite a run last week, and should continue to work back towards their 52-week highs.
Asian markets were up across the board overnight. And the dollar is lower today vs. both the Yen and Euro. After spiking to nearly 3.85% on Friday, bond yields have settled down. The 10-year yield is now around 3.73%.
The ARMS Index is high this morning, at 1.21, indicating selling pressure. The put/call is less elevated, at 0.95.