David Moenning

Diluting the Upside?

Stocks pulled back on Monday and it now appears that it’s “game on� as to which team can maintain possession of the ball in the near term. There were several negative factors working in the market yesterday as it seems that suddenly everyone is worried about how far stocks have rallied since the March 9th low.

For starters, valuation concerns cropped up for the first time in ages yesterday after Bloomberg reported that stocks had enjoyed the best earnings-season rally since 2002. While this is hardly ground breaking news, the article went on to say that the rally has pushed 34% of the companies in the S&P 500 above analyst price targets for the next year. Thus, the phrase “too far, too fast� was all the rage yesterday.

Next up, the Wall Street Journal also suggested that valuation issues may be growing. In an article, the Journal ...

Sell What You Can...

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Central Bankers around the globe mounted their white horses yesterday and attempted to ride to the rescue of the financial markets with an impressive display of coordinated rate cuts. Since this was one of the things we said we were looking for in this weekend’s big-picture missive, we will have to give credit to the Fed and their cohorts across the pond for doing just about everything they can to try and stop the bleeding in the markets.

While the point of yesterday’s surprise move may have been lost on the average investor, it should be noted that the goal of Mr. Bernanke and Co’s latest effort was to encourage banks to lend again. And what better way to do that than to wave a fistful of dollars – this time in the form ...

Is That a Train?

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All rallies over the past year have been based on the idea that we had seen the worst in whatever was ailing the market at the time – I.E. the credit crisis or the oil spike or the economic slowdown in the U.S. But unfortunately, after the requisite rallies, the light at the end of the tunnel has more often than not turned out to be an oncoming train.

Such is the case right now. Suddenly all anyone can talk about is the global slowdown and how the decoupling theme has been debunked. And in short, it was the idea that the global macro picture isn’t getting any better that was behind yesterday’s 345 point thrashing.

There really wasn’t any one data point that led to the foul mood among traders. Rather, it seemed to ...

Same Story, Different Day (Again)

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Stocks experienced a case of déjà vu yesterday as traders seemed to have locked on to the trend of buying what has been bad and selling what had been good. In English, this means that anything in the energy and materials complex had another rough go while anyone rummaging around in last month’s 52-week low list was again rewarded handsomely. And this, of course, led to another round of green screens on the major indices.

The energy arena wound up on the defensive again yesterday as August crude futures fell another -$3.98 to close at the bargain basement price of $125.44. This was the lowest close since June 4th and was caused by two factors. First, Hurricane Dolly took a turn for the best and managed to narrowly miss the installations in the Gulf ...