Has the Structure of our Financial and Investment System Changed?
Posted on Monday, April 7th, 2008 | In Market CommentaryHas the structure of our financial and investment system changed? We have more activist central banks globally; bank bailouts; trillions now in nontransparent SWFs; blurred distinctions between investment banks and banks; Wall Street trading desk profits exceeding all other corporate enterprises; hedge funds a plenty; potential for some emerging market decoupling from major economies and so forth. Today, I noted the story from Asia indicating that the Chinese government would allow mainland investors to buy US stocks in the near future. This could be another powerful force with an impact hard to imagine currently. The existing bullish bias has gotten a steroid injection.
Meanwhile, back at the ranch, trading volume remains light and breadth is unimpressive.
Changes to the financial system are obvious. I don’t know if it makes things better or not. It will take someone smarter than me and some time before we know the answer.
In the meantime, earnings season is upon us. Earnings that beat lowered expectations are old ploys, but it will take something like that to prevent a dreaded trading range environment.
I’ll just keep this shorter than usual today as once again with volume light and earnings news ahead. You have to give bulls credit for not allowing a similar powerful rally to fade quickly. Friday’s unemployment data was horrible yet stocks rose. When markets rise on bad news you can be assured bears are tired and bulls emboldened.
Let’s see what happens.
Have a pleasant evening.
Disclaimer: Among other positions the ETF Digest maintains long or short positions in: USO, SLX and UDN.
Last 5 posts by David Fry
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 About David Fry (http://etfdigest.com)
Dave Fry has devoted over 35 years to the business of trading and portfolio management. His registration as an arbitrator with both the National Association of Securities Dealers (NASD) and the National Futures Association (NFA) attests to his extensive experience and spotless compliance record. Dave founded the ETF Digest in 2001 and was among the very first to see the need for a publication that provided individual investors with information and advice on ETF investing. Dave is a frequent commentator on ETFs and other issues important to individual investors, and his perspectives are featured in financial news sources such as the Wall Street Journal, MarketWatch, Investor’s Business Daily, Smart Money, Dow Jones Newswire, National Business Review, MSN Money, Yahoo! Finance, Bankrate.com, Emerging Markets Monitor, IndexUniverse.com, and ETF Investor. |
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