Monday, April 06, 2009

Monday Morning Musings

The market is off to a weak start, taking a different tone from Friday's strong close. Although lately, the market has been opening weak and then closing strong quite often, so anything can still happen today.

Tech stocks are lower after talks between IBM and Sun Micro (JAVA) have hit a wall. The WSJ reported that Sun rejected IBM's formal offer. (I think they should have taken it)

There is not much else in the way of corporate or economic news this morning. This week starts earning season, and with little guidance offered by CEOs of late, it seems that this quarter's earnings report could generate more volatility than normal in stock prices. As such, I would not make any big bets about which companies might blow away estimates, and vice versa.

Asian markets rallied overnight, shrugging off the missile launch by N. Korea. HSBC successfully raised $18.5 billion in an offering. Also, the Japanese govt. plans to unveil a new stimulus plan worth more than 2% of GDP on Friday.

The dollar is higher this morning, which is weighing on commodities. Oil is lower, near $51, and gold has broken below the $900 level. The 10-year yield is off slightly to 2.88%; and the VIX is up +6%, back above its 200-day average, around the 42 level.

Trading comment: I put on a small hedge late last week, that I have only taken partial profits on. If the market pulls back further, I will look to take full profits and begin to add to some long positions. I am leaning toward adding some exposure to the financial sector, as well as consumer staples. I will keep In The Money readers posted.


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