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- Stock "Circuit Breaker": Will There Be One?
- Was That The Bottom?
- Watch Value Of Credit Default Swaps Backed By Lehman Bonds
- Uncertainly In Credit Markets Just One Of Key Issues
- Street Despair: No Visibility of Earnings
- Traders Find Their New "Nirvana"?
- Short Sale Ban On Financials Is Over: Make A Difference?
- Paulson To Blame For Late Sell-Off? Read This First
- Why Stock Traders Are Fixed On Bond Market
- US Banks Keep Pressure on SEC to Deal With Shorts
- Financial Crisis Has Inflationary And Deflationary Potential
- What the Pros Say: Swap Jitters, Bottom Searches
- Viacom Warns of Third-Quarter Profit Shortfall
- US Consumers Lose Faith in Fed Due to Crisis
- Jefferies' Hogan: Market Will Bottom Today
- Traders Needing Cash Even Dumping Bonds
- Greenspan Sees First Half 2009 U.S. Housing Recovery
- Higher Volume Indicates Push Toward Turning Point

The two weak links in yesterday's market--housing and brokerage stocks--continued to be the weak links today.
1) House prices declined 3.2% in Q2 from a year earlier, according to the S&P/Case-Shiller U.S. National Home Price Index. Home builders like Centex [CTX
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] , Lennar [LEN
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] and DR Horton [DHI
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] down 4%-6% this morning; most builders are at multiyear lows. DR Horton, for example, is at 4 year lows, down about 60% from its historic high of $42 in July 2005.
2) Merrill Lynch's Guy Moszkowski downgraded Bear Stearns [BSC
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] and Lehman Bros. [LEH
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] because of their greater dependence on debt markets; they note that Merrill and Morgan Stanley are more diversified.
He also downgraded Citi [C
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] and lowered estimates for JP Morgan Chase [JPM
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] , due to the expected impact on the banks' Investment Banking units from bridge-financing commitments.
Goldman made similar comments over the weekend (though did not downgrade any stocks), noting that August in general has been ugly for brokers, with investment banking and fixed income both weak.
Meanwhile, big multinational growth stocks continue to outperform the overall market. JP Morgan, in a note to its clients this morning, attributed the outperformance to a weak dollar and the dominance of a growth investment strategy. They conclude by saying that "We think both trends will remain relevant for the rest of the year as actual 3Q07 earnings will likely beat expectations and the dollar will remain weak against other major currencies."
Questions? Comments?


