Investment Strategy


  • Why are the markets yawning even though the President has announced a stimulus package? The reason is that 1) The extent of the consumer slowdown is uncertain, and 2) The extent of the global slowdown is uncertain.

  • So where are we? The markets yawned at the President's stimulus plan, which is short on details; we are now at the lows of the day, the month, the last 52-weeks on the S&P 500. Any stimulus plan is good news, but the problem is the Street wants MORE: more stimulus, more cuts, more fear--more sense of a bottom that really is not yet present.

  • So for bulls and bears it's a tough call either way: 1) How much do you believe the U.S. consumer is slowing down, and 2) How much ancillary slowdown will the global economy see. Bears say consumer slowdown has just begun, and global slowdown is just starting, with the U.K. already slowing.

  • Weak Markets: Bernanke Not Total Reason (Hedged Exposure) Thursday, 17 Jan 2008 | 12:54 PM ET

    If you are wondering why the markets are weak, you cannot blame it all on Mr. Bernanke's somewhat downbeat testimony. The initial comments from Bernanke, on top of a very poor Philly Fed, down 20.1, the lowest since October 2001, set the tone early on.

  • Wall Street Chuckles Over Kaptur/Bernanke "Confusion" Thursday, 17 Jan 2008 | 11:48 AM ET

    Uh, no, you must mean the other bald guy who's always around: desk traders on the Street are cracking up over this faux-pas by Congresswoman Marcy Kaptur during an exchange with Fed Chairman Ben Bernanke:

  • Ambac Possible Downgrade: "Death Knell" For ABK? Thursday, 17 Jan 2008 | 9:22 AM ET

    The big story this morning is in bond insurers. Bond insurers weak (again) today as Moody's placed Ambac under review for a possible ratings cut. What happened? Last month Moody's affirmed the rating with a Stable outlookaffirmed the rating with a Stable outlook.

  • When to Buy When Cheap Just Gets Cheaper Thursday, 17 Jan 2008 | 4:50 AM ET

    Last week I was reading plenty of research advising of compelling equity valuations. You know the skit. At these levels of profitability price/earnings ratios should be 18-times rather than 11-times and if you like the company at 18 then you should love it at 11.

  • Economic Stimulus Package: What Might Actually Get Done Wednesday, 16 Jan 2008 | 4:10 PM ET

    A stimulus package is a big topic on the Street today after House Majority leader Steny Hoyer said a stimulus package could be law within a month. Senator Charles Schumer, speaking with our Erin Burnett, said it could involve:

  • Stimulus Pkg Talk, JPMorgan Help Make Modest Rally Wednesday, 16 Jan 2008 | 4:09 PM ET

    Stocks are rallying modestly off their mid-morning lows on several events: 1) Stimulus package talk--A stimulus package is a big topic on the Street today after House Majority leader Steny Hoyer said a stimulus package could be law within a month.

  • Market Has Big Opportunities -- For the Brave Wednesday, 16 Jan 2008 | 12:35 PM ET

    The obsession with trying to call a bottom is based on a very real historical fact: Slowdowns in the economy -- call it recessions if you want to -- are invariably followed by rallies. Big rallies.

  • Intel's Drop Will Drag S&P Down With It Wednesday, 16 Jan 2008 | 9:38 AM ET

    With the Intel disappointment, S&P futures are trading below August lows and we are now certain to see the S&P 500 -- but not the Dow -- trade at 52-week lows.

  • Market Insider Look Ahead To Wednesday Tuesday, 15 Jan 2008 | 5:00 PM ET

    Here is just a quick look at what you can expect in Wednesday's markets. Consumer inflation data and earnings news will help set the tone after Tuesday's rocky market. Before the bell earnings are expected from J.P. Morgan and Wells Fargo.

  • "Shorter" Is Better Today For Markets Tuesday, 15 Jan 2008 | 3:56 PM ET

    Who's making money today? The shorts, in fact some of them are getting positively bold. The big movers are Exchange Traded Funds (ETFs) that specialize in Ultrashort positions--that is, as the indexes behind these stocks go down, say, 5 percent, these UltraShort funds GAIN 10 percent--twice the inverse.

  • Consumer Spending: Now Down To Just A "Trot?" Tuesday, 15 Jan 2008 | 3:55 PM ET

    Anecdotal evidence that the U.S. consumer's marathon spending spree may be slowing to a trot increases daily. By some measures, the U.S. consumer makes up about 19 percent of the world economy and 70 percent of the U.S. economy, so the health of American consumption is key.

  • Citi "Proves" Financial Bottom Is Not Here Yet Tuesday, 15 Jan 2008 | 11:38 AM ET

    Major indices are again at important technical levels. The small-cap Russell 2000 is again at 52-week low; and if we close here the Dow Industrials and the S&P 500 will both be at 10-month lows. The problem is principally with Citi and the realization that the bottom is not in. The equation here is simple: no "kitchen sink" quarter + consumer deteriorating = stock dead in water.

  • Retail Numbers (Disappointing) And Citi (They Blew It) Tuesday, 15 Jan 2008 | 9:02 AM ET

    Retail sales a clear disappointment, dropped futures even more, only good news is Fed has even more room to ease here. Citigroup reported a fourth quarter loss of $1.99, $1.03 expected. Losses were driven by write-downs (of $17.4 billion) and losses in subprime, and an increase in credit costs of $5.4 billion in the consumer loan portfolio (more signs that the consumer is slowing down).

  • Market Insider/Tuesday Look Ahead Tuesday, 15 Jan 2008 | 12:07 AM ET

    Important economic data will compete with Citigroup's much-anticipated earnings report ahead of Tuesday's opening bell. Retail sales data is being particularly watched to see if it is weak enough to prompt the Fed to cut rates even before its regular meeting at the end of the month.

  • Financials: Is Citi "Pushing Them" To A Bottom? Monday, 14 Jan 2008 | 2:00 PM ET

    The idea that financials are close to a turning point has been percolating for several weeks. But word that Citigroup could take a massive writedown when it releases earnings tomorrow has added fuel to the theory the group may be closing in on a bottom.

  • Market Analysts Keep Looking For Market Bottom Monday, 14 Jan 2008 | 11:48 AM ET

    Several interesting strategist/analyst calls this morning, all trying to pick a bottom: 1) Credit Suisse recommending an overweight in U.S. stocks because the Fed is likely to cut rates to respond to the slowing economy quicker than their European counterparts.

  • Monday Outlook: IBM Lift, Sears Drift Monday, 14 Jan 2008 | 10:13 AM ET

    The haves and have nots this earnings period could come down to who has the biggest foreign exposure. Look what happened with IBM today. The weak dollar is its friend.