Monday, January 8, 2007

Morning Market Comment 1/8/2007

Stock futures are indicating a slightly higher open. I still have no broad short bets against the market at this point unless you consider my heavy position in GLD as a bet against the market, or my decision over New Year's weekend to move most of my long term fund investments out of emerging markets funds and some U.S. fund exposure and into cash, a bet against the U.S. market. After good gains last year, I've opted to take a break to get a better sense of how things on the macro front will shake out, as I discussed last night. I have a full fledged SPY put play in mind that I may enact today depending upon how things unfold. I'd be a lot more comfortable in a broader short bet against the U.S. stock market if QQQQ resumed its downside leadership roll with the verve (remember how Steve Martin used that word in one of his movies?) it had going into the end of 2006.

Earnings season kicks off tomorrow with results from Alocia (AA), but doesn't really kick into high gear until next week.

Cowen makes Schering Plough (SGP) a "top pick" for 2007, liking its cholesterol drug lineup and pipeline.

Goldman throws a bone GM's way, raising it's price target to $33 on a better near term product mix, but still maintaining a "neutral" rating.

UBSW raised IBM to a "buy" from "neutral" and upped it's price target to $118. Simply amazing.. they're saying, "ok, we've been wrong, very wrong, now believe us when we finally say buy". Wall Street's buying it, Big Blue is up more than $1.

Crude oil is up 1-1/2% after Friday's bounce at just below $55 and it looks like a short covering rally attempt might be underway. At these levels it is also predictable that the OPEC foks begin to pull the bully pulpit out:

Nat gas is more than 5% after being able to bounce back from a brief move below $6. There's also some talk of seasonal temps returning in the northeast, but it's already looking like we'll rebound into the 50's by this weekend here in the NY Metro area. Next week it looks colder on the long range, but the pattern has been for those forecasts to not verify, or bust because of persisting warmer than normal temps.

Gold holds to a gain of about $3, Euro down 18 points, see my comments from last night, but floating just above the $1.30 key point of reference.

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