I’m beginning to think that the TARP fund is really just an all-purpose slush fund, it has suffered from so much mission-creep at this point. Not only was it used to bail out the automakers, but now David Cho reports that
the Obama administration is developing an initiative to take money from the $700 billion program for the banking system and make it available to millions of small businesses.
I end the week looking at the weekly charts for the 10-Year yield, Comex gold and copper, Nymex crude oil, the major equity averages, and the housing and financial indices.
Demand for US Treasuries on a flight to quality has trumped the deluge of supply.
OECD composite leading indicators (CLIs) for May 2009 point to tangible signs of improvement in the outlook of most OECD economies, with the notable exception of Japan and Brazil.
“Potential recovery signals are emerging in Italy and France, with indications of troughs emerging in Canada, the United Kingdom, the United States, China and India. The trough signals are more tentative in Russia,” according to the OECD.
Current Futures: Dow -24.00, S&P -2.60, NASDAQ -4.00
Asian markets are currently trading flat, while the S&P futures moved somewhere lower tonight, as investors prepare for the last trading day of the week.
"New rules governing appraisals on loans slated for purchase by Fannie Mae and Freddie Mac are also affecting valuations conducted for loans guaranteed by the Federal Housing Administration, trade groups representing appraisers say...
Many experienced appraisers are declining FHA assignments from appraisal management companies, the groups said in a letter to Housing Secretary Shuan Donovan, because of another policy adopted more than a decade ago that limits how much appraisal management companies can charge."
The 100-day moving average in crude oil remains the line in the sand, in August at $58.82. We feel we’re getting close to an interim bottom but will remain on the sidelines until a bottom is confirmed. Natural gas is basing out for the last 3 days, the trading range has been 15 cents. Buy October $1 call spreads right here and sit on you hands for the next 5-8 weeks. Risk/reward on the trade, expect to pay approx. $2,000 per spread with a max target of $8,000 profit. We may be wrong on the trade, but would anyone question the trade as an investor taking a trade with a 4:1 risk/reward?
The story remains much of the same, the dollar and yen do one thing and the other currencies do the opposite. We have no recommended currency trades at the moment.
Hickey and Walters (Bespoke) submit: Below is a table of the S&P 500 stocks with the highest short interest as a percentage of equity float. For each name, we also provide its year to date performance, so you can see if the shorts have been winning or losing. Be on the lookout for these names as they report earnings this quarter. Ones that come in better than expected should do very well since shorts will be forced to cover. If the overall market continues to head lower, these names will most likely be some of the worst performers as shorts continue to pile in.
As shown, KB Home (KBH) has the highest short interest as a percentage of float at 27.77%, followed by Mylan (MYL), Citigroup (C), and Zions (ZION). The list of names is mainly made up of Financial and Consumer Discretionary stocks that investors are very familiar with. Companies like Wynn Resorts, Nordstrom, Harley Davidson, and Abercrombie & Fitch are household consumer names that the shorts flock to if they think retail will continue to struggle. If or when retailers do begin to thrive again, these names should be some of the best performers. Other key names on the list include Intuitive Surgical (ISRG), US Steel (X), and Legg Mason (LM).
Posts
