Market Summary - May 31, 2001
Posted Daily Between 5 and 6:30 PM EST
by Lance Lewis
http://www.prudentbear.com/bearthoughts.htm
Month-End Buyers Go On Shopping Spree
Asia was lower last night by about 2 percent. Europe was up a hair this morning, and the US futures were bid up as well. We gapped up at the open, danced around for a bit and then began a slow, grinding rally. That rally peaked out about mid-day, and we slid into the close to give back about half of the day’s gains. Today looked like your usual month end rally that always seems to appear during the last couple days of the month. Volume was OK (1.1 bil on the NYSE and 1.8 bil on the NASDAQ.) Breadth was slightly positive on both exchanges. Big winners were in the Internuts as the DOT rose 3 percent. Big losers were hard to find, but the retailers were weaker as the RLX fell 2 percent.
We had another tout on the semi equipment shares this morning, which was pretty funny considering that STM cut cap ex by 20 percent about an hour later. But facts like that were at the back of people’s minds today as month-end buying seemed to overwhelm everything else. TECD, a big distributor of IT products, posted results last night and guided lower for the next quarter. TECD managed to bounce a bit on that news along with everything else, although it was hit for about 15 percent yesterday off of SUNW’s news so a bit of a bounce may have been due. In fact, that same description sums up the day in tech generally. It was a day for bouncing. The SOX rallied 2 percent, but fell back from the highs of the day at the close. PC stocks were actually a little weaker with DELL and GTW both down 2 percent amidst the escalating price war between the two. I’m tempted to not even mention that MSFT launched its new Office XP today, because nobody really cares anymore. But there, I said it. The upgrade cycle is not what it used to be now that everybody has software that basically already does everything they need it to do. IBM slipped into the red late in the day and seemed to lead the late slide in the tech to bring the NASDAQ futures back to where they opened on the day. Tonight, we get mid-quarter updates from IDTI, NVLS, ALTR, and FLEX. Now that the month-end nonsense is over, we’ll see how everybody deals with the news from those calls, which won’t be pretty. I don’t think the reaction will be good, but we’ll see. My opinion and a nickel will generally buy you a cup of jack-squat. It’s the market’s reaction that obviously matters. Financials were generally higher on the day as the BKX rose a percent, and the XBD rose an eyelash. GE was flat. Credit cards were generally off a percent.
Oil fell 18 cents. The XOI was up a touch, and the OSX rose a couple percent. Gold rallied a couple bucks in the morning but slipped to down 50 cents by the close. Lease rates bumped up slightly. The HUI fell half a percent. The fact that the gold shares continue to hold up fairly well despite the collapse in bullion is generally a pretty bullish sign, so we’ll need to keep a close eye on the metal because its correction could be ending soon. The US dollar index launched almost a percent on the back of euro weakness. Specifically, the zero slumped to a new low for the move to just below the 85-cent level. The yen rallied a bit again to back to its recent highs for the move begun last week. Treasuries finally managed to get a bounce as the yield on the 10yr fell back to 5.41%.
This morning’s Chicago PMI showed a further contraction in manufacturing activity ahead of tomorrow’s NAPM, and jobless claims for last week jumped as well. (you can check the front page news items for the numbers.) Tomorrow, we also get the unemployment number. As usual, what will matter is not necessarily the number but how people react to it. That’s when we’ll find out whether today’s bounce is going to last a couple days, or whether it ended today with the intraday slide into the close.
(you can email me below, and I enjoy hearing from both bulls and bears)
lewis@tice.com
Fair use for educational/research purposes only!
Posted Daily Between 5 and 6:30 PM EST
by Lance Lewis
http://www.prudentbear.com/bearthoughts.htm
Month-End Buyers Go On Shopping Spree
Asia was lower last night by about 2 percent. Europe was up a hair this morning, and the US futures were bid up as well. We gapped up at the open, danced around for a bit and then began a slow, grinding rally. That rally peaked out about mid-day, and we slid into the close to give back about half of the day’s gains. Today looked like your usual month end rally that always seems to appear during the last couple days of the month. Volume was OK (1.1 bil on the NYSE and 1.8 bil on the NASDAQ.) Breadth was slightly positive on both exchanges. Big winners were in the Internuts as the DOT rose 3 percent. Big losers were hard to find, but the retailers were weaker as the RLX fell 2 percent.
We had another tout on the semi equipment shares this morning, which was pretty funny considering that STM cut cap ex by 20 percent about an hour later. But facts like that were at the back of people’s minds today as month-end buying seemed to overwhelm everything else. TECD, a big distributor of IT products, posted results last night and guided lower for the next quarter. TECD managed to bounce a bit on that news along with everything else, although it was hit for about 15 percent yesterday off of SUNW’s news so a bit of a bounce may have been due. In fact, that same description sums up the day in tech generally. It was a day for bouncing. The SOX rallied 2 percent, but fell back from the highs of the day at the close. PC stocks were actually a little weaker with DELL and GTW both down 2 percent amidst the escalating price war between the two. I’m tempted to not even mention that MSFT launched its new Office XP today, because nobody really cares anymore. But there, I said it. The upgrade cycle is not what it used to be now that everybody has software that basically already does everything they need it to do. IBM slipped into the red late in the day and seemed to lead the late slide in the tech to bring the NASDAQ futures back to where they opened on the day. Tonight, we get mid-quarter updates from IDTI, NVLS, ALTR, and FLEX. Now that the month-end nonsense is over, we’ll see how everybody deals with the news from those calls, which won’t be pretty. I don’t think the reaction will be good, but we’ll see. My opinion and a nickel will generally buy you a cup of jack-squat. It’s the market’s reaction that obviously matters. Financials were generally higher on the day as the BKX rose a percent, and the XBD rose an eyelash. GE was flat. Credit cards were generally off a percent.
Oil fell 18 cents. The XOI was up a touch, and the OSX rose a couple percent. Gold rallied a couple bucks in the morning but slipped to down 50 cents by the close. Lease rates bumped up slightly. The HUI fell half a percent. The fact that the gold shares continue to hold up fairly well despite the collapse in bullion is generally a pretty bullish sign, so we’ll need to keep a close eye on the metal because its correction could be ending soon. The US dollar index launched almost a percent on the back of euro weakness. Specifically, the zero slumped to a new low for the move to just below the 85-cent level. The yen rallied a bit again to back to its recent highs for the move begun last week. Treasuries finally managed to get a bounce as the yield on the 10yr fell back to 5.41%.
This morning’s Chicago PMI showed a further contraction in manufacturing activity ahead of tomorrow’s NAPM, and jobless claims for last week jumped as well. (you can check the front page news items for the numbers.) Tomorrow, we also get the unemployment number. As usual, what will matter is not necessarily the number but how people react to it. That’s when we’ll find out whether today’s bounce is going to last a couple days, or whether it ended today with the intraday slide into the close.
(you can email me below, and I enjoy hearing from both bulls and bears)
lewis@tice.com
Fair use for educational/research purposes only!