David Fry's Market Outlook for Thursday

Includes: EWC, FXI, GLD, ILF, INP, RSX
by: David Fry

D Fry Market Outlook 17 05 2007

A little financial wizardry, as bulls were stimulated to buy primarily by big money commitments from Icahn and Buffett in railroads, and Lampert's gambit with Citigroup (NYSE:C). As to the latter, I wonder what Sandy Weil would think if Citigroup gets broken-up into little pieces. He worked hard to build the monolithic financial services firm, but he's no sentimentalist when there's money to be made. Then there's the small Bausch & Lomb (BOL) deal where the company gets taken private for $4.5 billion [small potatoes, eh?].

The Fed's Hoenig cheered investors by saying the economy will get stronger. "The consumer [Chucky, if you please] has continued to be a strong supporter of growth," he said, "but [there's always one of those], gasoline prices are again on the rise and could work their way into core inflation." Huh? I thought we were supposed to ignore energy. I guess you can't eliminate energy costs from all products now can you.

And continuing with Fed affairs, former chairman Greenspan has accepted a consulting job with bond market mega-firm PIMCO. The biggest buyer meets the biggest seller -- that's a neat trick.

We also got upgrades in airlines and a better industrial production number. All this gave dollar bulls a chance to rally Bucky and smack gold lower.

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All eyes and headlines remain on the DJIA, but that's not where the real action is. Overseas some markets stay on fire making mincemeat of performance comparisons to U.S. averages.

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If you want to focus on BRIC [Brazil, Russia, India and China] countries, you might do better to buy them individually. There's a great difference between the economy of Russia and the others for example.

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Now I could put up more U.S. stock sector charts -- but the real action is overseas. The global stock market boom continues even if unevenly.

Don't forget this is options expiration week, and the usual weirdness could occur late Thursday and into Friday.

Disclaimer: Among other issues, the ETF Digest maintains long or short positions in: streetTRACKS Gold Trust ETF (NYSEARCA:GLD), iShares S&P Latin America 40 Index Fund (NYSEARCA:ILF), iPath MSCI India ETN (NYSEARCA:INP), iShares Trust FTSE-Xinhua China 25 Index Fund (NYSEARCA:FXI), iShares MSCI South Korea Index Fund ETF (NYSEARCA:EWY), and iShares MSCI Canada Index ETF (NYSEARCA:EWC).