Posted on Monday, 20th April 2009 by admin
It seems that the great results from Citigroup and Wells Fargo from last week weren’t enough to convince investors that financials were solid again. In fact, we just hit a wall while crossing a six-week old rally on the US stock market (seven week on the TSX).
All markets were down this afternoon, the Canadian dollar and the crude oil barrel was following the parade. May crude oil contract on the New York Mercantile Exchange almost lose $5 and we are now far away from the “stable price” of $50 a barrel.
The price of gold, which has been decreasing as people started to brave the market and leave the precious metal, increased in order to comfort investor’s anxiety about banks.
The truth is that many concerns remain unresolved concerning toxic assets and how Washington will get hurt by injecting over $700 billions in financials. Even though Bank of America said it earned more than expected, they still put $13.4 billions to cover losses from souring debts. It seems that financial problems may not be over yet.
As a matter of fact, nothing was justifying such rally for the past month in a half. Several stocks have gone up (especially in the financial and natural resources sector) for no real reason.
Several good stocks went down today such as Timminco, MI developments, Eli Lilly, Pepsi Co and Hasbro were part of the bigger losers during this red Monday.
On the other side, it may seem normal to get some pullback on a market that soared 25% in March. We will have to wait to see what is going to happen in the upcoming days to know if we are going back in the market rally or this was simply a market correction during a bear market. My bet is that we are going back into the rally!
For more information and trend analysis on the above mentioned stocks, please visit trend analysis (it’s free!)
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image source: flickr
Posted in Market Commentary | Comments (3)
April 25th, 2009 at 3:02 am
[...] The fear is back on banks says Buy My Stock Picks. [...]
April 26th, 2009 at 3:15 pm
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November 3rd, 2010 at 12:06 am
When I click your RSS feed it gives me a bunch of garbled text, is the issue on my reader?