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The Financials Pit Review

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For the week of March 24th, 2008

Wed, Mar 26 2008, 10:58 GMT
by Kalvin O’Brian

Pit Guru

U.S. Economy

Last week, heading into the Easter holiday, the news was not so good. The U.S Labor Department reported that jobless claims were up 22,000 to 378,000 more than expected. There was also the near collapse of Bear Sterns which undoubtedly took its toll on the stock market. However things have changed. After the Federal Reserve stepped in to arrange a takeover deal the stock surged and now JP Morgan may raise its offer from $2 to $10 a share. Other positive news is that Tiffany & Co climbed above analysts estimates. This news was surprising given that Tiffany is surging in the higher end retail sector despite astronomical metal prices.

Look this week for the new home sales number on Wednesday to be the only slowdown to a market that is going to go higher over the next week. Keep your stops close. The 30 day moving average is at 1350 that’s a number a lot of traders will be looking at.

Currencies

Statistics Canada reported that the composite index of leading indicators was down .3% in February. This was weaker than expected. The Canadian is going to be hard pressed to break the $1.00 mark for a while if crude and gold continue to sell off.

The US dollar is coming back. The dollar continued gains on the Swiss Franc, Canadian, and Yen started off by the Feds cut of its benchmark rate .75 percentage points on March 18th. Help also came after some analysts said the Group of Seven nations may take action in currency markets to offset the impact of a slowing U.S economy. It doesn’t appear to be coming as hard and fast as some would like but the dollar should continue to rally.

Published on  Wed, Mar 26 2008, 11:00 GMT