Tuesday Musing- Final Week in May

• International money is flowing to U.S.A., and who would have thunk only a few months earlier? As bad as we think we are financially most of the world is worse. Mortgage rates fall as money pours in to Treasuries. Monday euro continues its slide.
• Surprise as existing home sales revised upwards, WSJ reports May 24th that tax breaks for first time home buyers and low interest rates had an un-expected increase.
• Just as we were thinking we’d get a Monday bounce a late selloff appeared like a distant relative showing up at dinner-time. Financials, which were okay in early trading, lead the decline. The sell-off wiped out Friday’s gain and may have set the mood for the week ahead.
• Correction or Bear? Bruce McCain, chief investment strategist with Key Private Bank in Cleveland, thinks stocks are at the bottom and may well continue to trade in a narrow range for the foreseeable future. John Norris, managing director of wealth management with Oakworth Capital Bank in Birmingham, Ala., thinks the current European crisis merely gave investors an opportunity to sell.
• Bill Gross, co-chief investment officer of the PIMCO bond funds, put his own money-$7million- into 3 PIMCO bond funds, according to Tuesday’s Barrons. Gross has not invested into any of the three closed-end bond funds since 2007.
• How did the best performing analysts beat out their peers in 2009? According to WSJ’s Matt Phillips, May 25th, the winners were the most aggressive. They had bullish resolve in the face of adversity. The bought and bought often. Maybe not a lesson for all of us but something to remember and keep in mind.
• Stocks fell  at the open Tuesday as investors were disappointed on the US home price report and continuing problems in Europe. Interest rates fell as the 10-year hit the lowest levels since April,2009. A better than expected consumer confidence report had little impact as equities fell over 260 points only to make a stunning recovery just before closing. The Dow was down less then 23 points with the Nasdaq down 2.6 and the S&P up fractionally.
• From ‘I-Didn’t-Know-That’, Pabst beer is a ‘virtual’ brewer with the product manufactured by Miller-Coors.
• According to chit-chat on Fast Money on CNBC S&P correction may be to 950.
• Morgan Stanley called on Wednesday for clients to overweight emerging markets and global stocks. In their letter to clients, ‘…emerging markets don’t look expensive.’
• Rally started at the bell on Wednesday, petered out by noon and started again. Markets gained strength through the day as good news piled onto good news The OECD hiked its growth expectations for the balance of 2010 Plus 2011. The Commerce Department reported new home sales jumped almost 15% the highest level since May 2008. Durable goods increased 2.9% in April for the 4th rise in 5 months.  3:15 the markets turned chicken with a misinterpreted China statement and closed down almost 70 points.
• Thursday Bulls were ready-set- and go they did as China clarified that it was not selling euro bonds. It was a stunning day as markets got their wind and didn’t let up for a 285 point gain. Markets got stronger each hour which says something for a continuation.
• Friday morning Europe and Asia opened higher for the third straight day as our domestic market readied for a long weekend. U.S. Secretary Geithner said there was broad agreement between Europeans and the United States on how to go about overhauling global financial regulations.
• Michael Kahn, technical analyst for Barrons, reported Wednesday that the moving averages and market cycles still point to a weak stock performance for the coming months. ‘We can make a compelling case for market weakness all summer long.’ He concluded, ‘Rather than look for bargains in the stock market now, it would seem that it might be better to use any rebound to lighten up.’
• Gold prices scary? According to Randall Forsyth at Barrons, in his ‘Up And Down Wall Street’, it seems everyone, including billionaire Paulson, is piling into the gold etf GLD and Forsyth worries that gold is a possible bubble? According to Dow Theory Letters editor Richard Russell investors should ride a bull as long as they can. (Does anyone besides me remember the dot.com craze?)
• Shortened trading week coming up. Enjoy the Holiday weekend.

If you have questions call Paul at 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.