In This Issue:
Rally just keeps on going...
Leaders fall behind
Earnings - Getting worse but not as fast...
Home sales pick up at the expense of prices
We're still in sell mode
Quote of the week
'The main issue right now is that there's just a lot of [Treasury] supply out there. The Treasury is selling a lot more than the Fed is buying.' - Futures trader Arthur Bass. Demand from domestic and foreign institutions for the $34 billion five-year Treasury note auction was 30% this week, compared to 48.9% from the previous auction in February and an average of 30.1% for the last 10 auctions.
Rally marches on...
It was another good week for stocks driven higher by expectations that toxic bank assets would be finally removed from bank balance sheets by the taxpayer. Before Friday's 148-point drop, the Dow Industrials had gained an impressive 21% in just thirteen trading days.
Stocks were further helped by some short-term good news in existing and new home markets which is really not good news at all. The difference is that investors are now interpreting bad news by buying more stocks and that is a good sign as it shows sentiment is becoming more bullish....