Wednesday, March 7, 2007

Brief Thursday Curtain Raiser

Front and center Thursday morning at 8:30 ET is the latest Jobless Claims data. A small dip to 335k is expected. The trend has been rising one in recent weeks.

Those who bought shares of Freemont General (FMT) on todays more than 20% surge on buyout speculation may be tempted to sell tomorrow, and perhaps at a big loss. Freemont has consented to an FDIC cease and desist order. The company also earlier cautioned that there's no assurance a sale of its assets will be completed. Earlier today, investors seemed to think that White Knights were lined up around the corner not only for FMT but the rest of the subprimes as shares in many rallied.

But here's a guy who might be loading up on more subprime shares: Second Curve Capital's Thom Brown sees opportunity, according to the Wall Street Journal. Considering the beating Brown's fund has taken over the last few months, this would definitely be in the realm of, "THANK YOU SIR MAY I HAVE ANOTHER." I had long forgotten the name Thomas Brown, but Howard Lindzon reminded me a few days back with his first post about Mr. Brown's bloody exploits in the world of subprime stocks. I think Mr. Brown will have his clock completely cleaned in this space. On some levels I'd like to respect Brown's dogged determination and his background as being a contrarian, but then I remember, he's playing with other people's money.

One indicator that I keep an eye on with respect to market health over the medium term is the percentage of stocks above their 200 day moving average on the NYSE. As recently as a few weeks ago, this index soared to above 80%. Now it's down to 71% with plenty of room left to the downside.

With Asian stocks nudging higher again tonight, S&P futures are up a couple of points. Yen futures, earlier higher, now down 11 points. Bank of New Zealand lifted a quarter point, though that could actually make carry trade Yen vs NZ more attractive, since base rate in NZ now up to 7-1/2%. European Central Bank meets on rates tomorrow. Analysts are expecting a quarter point ECB hike.

By the way, is Thom Brown related to Old Lucy Brown?

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