Dave Fry's Market Outlook For Tuesday

Rainy days and Mondays once again. The buzz on Monday came from banks with poor earnings and warnings from Citigroup, a proposed super fund to ease credit market conditions, record high crude oil prices and uncertainty over the flood of earnings about to hit the Street.

With stock prices high, this kind of news was more than enough to drive stock prices lower on decent volume. [Take your choice from the sources below.]

Wall Street Journal



Yahoo/Finance




The bank super fund is interesting. Some thought initially that this package might mark the end of the so-called mortgage/credit crunch crisis since this $100 billion pool might then outline the total damage to bank portfolios. But as more of the fund’s details emerged it seems it has little to do with subprime mortgage issues for example. Is this then just the first in a series of super-funds organized by Treasury Secretary Paulson? Stay tuned, is all I can say.




































Meanwhile, in other sectors like tech, earnings will be highly scrutinized.














Let’s look briefly at the global picture as represented by popular BRIC markets.














Aside from the obvious attempts by Treasury Secretary Paulson to bailout banks and help relieve the credit crunch investors remained uncertain and unimpressed today. In fact, they seemed more not less concerned. Once again, once investors get a handle on the scope of the credit problems they won’t be satisfied. Whether you agree or not with Paulson’s attempt to manage/manipulate/help the situation, one thing’s for sure, he’s fully engaged.

You might get the idea that I’m a little ticked-off about energy market conditions and you’d be right. Several decades have passed since the first oil embargo. Have we drilled more in the US for energy? No, less. Instead we have allowed the NIMBY and environmentalist crowd to prevent drilling where we know there are proven reserves. We enrich unstable countries and transfer our wealth to them. We haven’t built any nuclear plants or seriously explored other alternatives. Why? Demagoguery about big oil and pandering to the worst instincts of voters has left us with no policy and at the mercy of idiots.

So while we give out awards to nincompoops we remain bankrupt of energy leadership.

That will serve as my rant for the day.

Have a pleasant evening.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, USO, DBE, DBC, UDN, GLD, GDX, QQQQ, IBB, EWZ, RSX, INP and GXC.

Comments

[marq:]

Dave-Think of it like wealth in the ground. The resource steadily appreciates awaiting future harvest; and this should continue, since oil at $80-100 today is still cheap, considering the value it delivers to consumers.

2007 Oct 16 12:09 PM

[User 114285:]

What's with the foul language mjm?? Makes you sound irrational.
Dave, you just keep doing what you do. I consider you one of the best in the industry.

2007 Oct 16 06:21 PM

[Snorkel:]

Keep up the good work Dave, mjm is trying to view the real world through very dark tinted green glasses. No rationality there.........

2007 Oct 16 07:13 PM

[fore:]

While I want to agree with mjm (though what's going on with the cussing at the end, seriously), I think Dave is on-point with the lack of action by Congress on common sense energy policy (no matter which party is in charge). Recent improvements in nuclear technology make the method safer and a much cleaner energy than the coal (don't let anyone fool you, there is no such thing as "clean coal") and oil power plants. However, there have been no new nuclear power plants since the 1970s. I didn't read anything about Dave's opposition to CAFE standards (which even a Democratic Congress can not increase) and must have missed the part where Dave wanted to drill under Mt. Rushmore. A self-reliant energy policy while we research and develop new energy sources is a reasonable, cogent position to take. The current practice of enriching nations who hate us because they have we need doesn't seem logical.
Keep it up Dave. I might not always agree, but I am usually challenged by your comments, and always amused.

2007 Oct 16 11:49 PM