Monday, June 23, 2008

Monday Morning Musings

The market is only up slightly after the open, despite how oversold it became last week. There was some hope that oil prices would drop following the meeting in Saudi Arabia over the weekend.

The Saudis said they will increase output by 200,000 barrels/day starting in July, but oil is still up a bit near $136.

The dollar is stronger this morning, which is hitting gold by -2.2%. The 10-year yield is down slightly to 4.13%.

There were some mergers over the weekend. Bunge (BG) will buy Corn Products (CPO) for $4.8 billion, and Republic Services (RSG) will pay roughly $6 billion to acquire Allied Waste Industries (AW).

The financials are lower again this morning, after Citi (C) and Goldman Sachs (GS) both said they would cut their workforces by -10%. Goldman normally slashes its workforce by -5% each year, but these cuts are higher than normal. I don't think the shares should be lower, as this well make the company leaner and reduce its expenses a bit. So I would still be a buyer on weakness.

Energy shares are leading the way, with the oil service stocks up quite a bit. Tech is mostly mixed.

I expect the market to bounce this week, and have began to cover some of my trading shorts and add to my longs. I will recap the sentiment indicators later.

Finally, I was saddened to hear of comedian George Carlin's passing. He died in Santa Monica yesterday at the age of 71. Carlin was a pioneer in comedy, and a very funny man.


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