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D Fry Market Outlook 14 12 2006

"It's good to be the king!"
Mel Brooks

The earnings from Global Megabank N.A. Goldman Sachs Group Inc. (NYSE:GS) were released today. Within the numbers the standout figure was the 57% increase in "trading" profits to [gulp] $6.62B. And as the CEO stated, "...extraordinary performance of our people enabled us to serve our clients around the world." [Well, not to mention GS, eh?] Oh, and $16B has been set aside for salaries, benefits and [cough] bonuses. Am I jealous? Sure. Check out the numbing numbers outlined in today's NY Times. [It's a fun read, but you may need to register to read it.]

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In the meantime, the Fed had their little meeting and, as expected didn't do anything other than have lunch and reprint the previous meeting's notes.

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However, beneath the headline indexes, many sectors were down or just really sloppy. This reflects bulls showing "some" signs of fatigue as demonstrated by the poor breath figures.

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Bulls are disappointed I guess that the Fed isn't showing any signs of being concerned about weaker recent economic data repeating more tough inflation fighting rhetoric instead. As to the latter, they need to keep talking tough to prevent the dollar from collapsing. But even with the statement, the dollar was relatively weaker against most currencies except the yen.

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Other markets were also bogged-down in sloppy action.

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Currency markets are collecting themselves for another run higher or are mired in a wait and see state.

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Globally things were mixed.

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After we clear energy supply news tomorrow and the OPEC meeting on Thursday we still have one major obstacle ahead—Friday's triple witching as options and futures for December expire. That should be quite a spectacle.

Like I said before, I bow to the money-making abilities of the giant megabanks. "It's good to be the king!" indeed.

Have a pleasant evening.

Disclaimer: Among other issues, ETF Digest maintains positions in: S&P 500 Index (NYSEARCA:SPY), iShares Lehman 7-10 Yr Treasury Bond ETF (NYSEARCA:IEF), streetTRACKS Gold Trust ETF (NYSEARCA:GLD), iShares Silver Trust (NYSEARCA:SLV), Central Fund of Canada (NYSEMKT:CEF), Euro Currency Trust ETF (NYSEARCA:FXE), CurrencyShares British Pound ETF (NYSEARCA:FXB), CurrencyShares Australian Dollar ETF (NYSEARCA:FXA), iShares MSCI EAFE Index Fund ETF (NYSEARCA:EFA), iShares MSCI Emerging Markets ETF (NYSEARCA:EEM), iShares S&P Latin America 40 Index (NYSEARCA:ILF), iShares FTSE/Xinhua China 25 Index (NYSEARCA:FXI), iShares MSCI Japan Index ETF (NYSEARCA:EWJ), Templeton Russia & Eastern Europe Fund CEF (NYSE:TRF) and India Fund Inc. (NYSE:IFN).

Source: David Fry's Daily Market Outlook