OK – we almost sort of, kind of have the new site under control.
My morning is shot so I have little clever to say about the markets at the moment but I'm glad we covered into the weekend!
The Hang Seng dropped from 28,420 at lunchtime to 27,770 at the close filling a 1,000-point gap in 60 minutes – Yee Haw! The BSE (India) flew down from it's opening spike where it posted one of the shortest-held records on record at 17,965 before it dove down to 17,500, went out for lunch to talk about it, regained 17,621 after the break but then made new lows of 17,326 by teatime and finished the day looking exhausted at 17,512.
According to Mr. Murdoch's Journal (and, sadly, I kid you not): "Most shares made strong gains across the Asian-Pacific region. Hong Kong closed slightly lower on profit-taking pressure after tracking record gains in Shanghai as financial firms played catch-up following a week-long holiday." Ah yes, there's also something about a bridge they want to sell you in Brooklyn…
What are the odds of a financial publication owned by a Billionaire telling you that stocks and other assets (you know, the kind of things theiir net worth is based on) may not be worth what you think they are? If you want reality of Asian market sentiment, check the FXI, not the WSJ! Anyway, that's enough thinking for today – now let's see if we can keep this rally going!
Oil is having a mile global sell-off along with other commodities as the dollar takes a bounce. Asian investors returning from holidays either think the dollar is cheap or they're just looking to keep the balance of trade unbalanced by keeping the local currencies in check. You can inflate the dollar relative to your currency without buying actualy dollars by dumping your own currency for Euros or whatever so we'll have to examine the interrelationships between the various currencies, rather than just look at the dollar to figure out if it's really improving. Japan, for example, tallied record foreign reserves last month while trying to prop up the dollar.
You may be hearing that Berkshire Hathaway has further cut it's stake in PTR but you won't usually hear that this recent cut was from 7.29% to 6.97%, another example of how ridiculous the financial press is when deciding what constitutes a story. Buffett has bowed to activist pressure to reduce his holdings in PTR, which does business with people we don't like. 88.21% of the company is still held by China National Petroleum which, together with Buffett's remaining 6.97% leaves 4.82% of the float available for the retail crowd – no wonder we have so much fun playing the options on this stock!
Europe is trading off a bit this morning but we do have a big merger as SAP buys our Feb selection, BOBJ for $6.8Bn, just under a 20% premium. At the time we said: "The underlying strength in Business Objects can be seen in that they have no debt and have thrown $160M of cash into the bank this year alone leaving them with $518M as of last quarter so the current p/e of 49 is deceiving on this $3.6B company.” Invest like Buffett, make money like Buffett – it's a pretty simple formula!
It's a holiday weekend today, the markets are open but there is likely to be low volume but things will get very serious very quickly tomorrow. There's going to be a lot of early pressure on the indexes coming from the oil sector and I'm more concerned about the Nasdaq continuing its leadership role:
Happy Trading and I will also be watching the BTK (850) and XLF (36), both of which need to head higher to confirm a continued market rally. Check his site for many relevant charts!
I should be back on top of things by the end of the day and we'll review economic data and earnings in this evening's post. For today, I'm not buying an up move without volume confirmation and we have a lot of gains that I'd like to convert to cash so just give us an excuse and we'll take some off the table. If we're really going up from here, 14,500 is just around the corner and, if not – well, we were at 13,100 less than 30 days ago (and the Hang Seng and the BSE just did that drop in hours!) so let's be careful out there!
Speaking of my man Rupert – Don't forget, we're just 1 week away from the Fox Business Network!
