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D Fry Market Outlook 12 07 2007

Well, why not? I have never seen so much bad news shrugged-off as have recent subprime woes. One commentator noted, "People have been programmed to buy any dip." That could translate to "dips buying," but that remains to be seen. Bulls believe the subprime mess is "contained" now that S&P and Moody's have lowered credit ratings. The worst must be behind us, and strong earnings and more deals will make everything right. Sure.

While equities were strong, breadth was unimpressive.

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Around the planet things are moving along unphased by U.S. dollar and subprime woes.

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The above markets are among those we're following closely. They cover the world and markets of major interest, which is why they're posted here so frequently.

Given some of the ongoing underperformance in some subprime related sectors [housing, bonds, banks and, yes, even retail] and the dollar, it's hard to see investors ignoring these concerns. Then again, ignorance is bliss, eh?

Bullish investors long accustomed to buying dips are counting on earnings to bail them out. That's logical, but can they do it? Not by Motorola Inc.'s (MOT) earnings, or lack thereof, after the bell this afternoon. But hey, that's just one company right?

Disclaimer: Among other issues the ETF Digest maintains long or short positions in: iShares Goldman Sachs Technology Index Fund (IGM), iShares Goldman Sachs Network Index Fund (IGN), PowerShares DB US Dollar Index Bearish (UDN), United States Oil Fund ETF (USO), PowerShares DB Energy Fund (DBE), PowerShares DB Commodity Index Tracking Fund (DBC), iShares Dow Jones US Real Estate ETF (IYR), streetTRACKS KBW Bank (KBE), iShares MSCI Emerging Markets ETF (EEM), iShares MSCI Brazil Index ETF (EWZ), Market Vector Russia ETF Trust (RSX), iPath MSCI India ETN (INP), iShares Trust FTSE-Xinhua China 25 Index Fund (FXI), iShares MSCI South Korea Index Fund ETF (EWY), iShares MSCI Australia Index Fund (EWA) and iShares MSCI United Kingdom (EWU).

Source: David Fry's Market Outlook for Thursday