After dropping 86 points yesterday, the market successfully re-tested the lows of last Thursday. Since the market looks deeply oversold, and has given back all of its gains for 2006, we will probably see some backing and filling action to repair the damage that has been done.
This morning, the CPI data was released for May, and the core number came in slightly higher than most economists had forecasted. This data leads us to believe (as did yesterday's PPI) the Fed will adjust rates higher one more time, and then pause. What leads us to believe this will happen is Treasury's are falling and the yield on the two year note has hit a 5 year high yielding 5.09%.
We are beginning to get a lot of negative comments from the press. These were the same people who were the biggest cheerleaders for the market four weeks ago. What a difference four weeks make. No wonder we have a huge A.D.D. problem in our nation.
This morning we are seeing bargain hunters snap up some of the "babies" ("throwing out the baby with the bath water) in the oil patch. The only reason not to buy the oils in here is you don't think another hurricane will form in the Gulf for the rest of the summer.
One stock I am adding to the IA portfolio is MasterCard (MA). I have been waiting for a pullback in this stock since it went public on May 25th. I do not want to pay more than $45/ share for the stock. MasterCard (MA) will be added to the IA portfolio immediately.
Comments (1)
hello John:
just wondering even though MA has no earning track record, why you like MA here? is this more for trading purpose? thanks
Shawn
Posted by shawn | June 14, 2006 5:54 PM
Posted on June 14, 2006 17:54