Via mymoneylife.blogspot.com/:
The market staged a big rally in the first hour of trading, but it is already started to give most of it back. Now you know why I dislike strong opens.
Sun Micro (SUNW) and GM both posted strong earnings, but it was the inflation news that really sparked the rally. The Fed's favorite inflation indicator, the core PCE , came in at +0.1% (consensus +0.2%). This leaves the year/year rate at 1.9%, well withing the Fed's "comfort zone". This could make it more palatable for the Fed to cut rates, if and when.
Asian markets rose sharply overnight, save for Japan which was hurt by investigations in its steel industry. Bond yields are steady at 4.80%, and oil is inching higher again, trading near $77.50. Rising crude prices could be weighing on sentiment.
The financials were strong out of the gate, but have since faded. We need the brokers to stay strong today to help this rally. Let's hope we see the buying power return late in the day, as month-end influences could play a factor.
$20.56 (08/01/07)
