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D Fry Market Outlook 08 05 2007

As far as stocks are concerned, bigger is better. Giant deals and rumors of more deals by giant players continue to drive big-caps higher. For us little people, if we're invested with them, it's fun and profitable.

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Speaking of giants, Berkshire-Hathaway (NYSE:BRK.A) held its annual meeting over the weekend. Buffett wasn't too worried about subprime mortgages and isn't fond of many short-term trading regimes dominating Wall Street -- calling the latter a "fool's game." I assume he's referring to program trading. Since he's a long-term investor, he scoffs at strategies that diverge from his specialty. But hey, it's good to be a primary dealer and trade the hell out of the market with random-but-consistent injections from the Fed and the Treasury.

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He also implied he was going to take $40 billion in cash and invest it overseas. Join the party please!

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There really isn't too much to add, as we'll have a "deal dependent" and "data dependent" week. Between the Fed meeting Wednesday [another Big Wednesday?], Trade Deficit data Thursday, and PPI and Retail Sales data on Friday, the second half of the week should offer plenty of fireworks.

Disclaimer: Among other issues, the ETF Digest maintains long or short positions in: S&P 500 Index (NYSEARCA:SPY), MidCap SPDRs ETF (NYSEARCA:MDY), iShares Russell 2000 Index ETF (NYSEARCA:IWM), NASDAQ 100 Trust Shares ETF (QQQQ), First Trust DJ Internet Index ETF (NYSEARCA:FDN), PowerShares DB US Dollar Index Bearish (NYSEARCA:UDN), streetTRACKS Gold Trust ETF (NYSEARCA:GLD), Market Vectors Gold Miners ETF (NYSEARCA:GDX), PowerShares DB Precious Metals Fund (NYSEARCA:DBP), PowerShares DB Commodity Index Tracking Fund (NYSEARCA:DBC), iShares MSCI EAFE Index Fund ETF (NYSEARCA:EFA), and iShares MSCI Emerging Markets ETF (NYSEARCA:EEM).

Source: David Fry's Market Outlook for Tuesday