Ben Bernanke Jumps Into The Blogging Game

Equities start the day higher as Big Ben Bernanke jumps into the blogging game! Man, this financial blog space is getting pretty crowded right? If Justin Biebs starts talking PE multiples and DCF modelling I might have to find a new gig. What did Big Ben lead off with? A little treatise on why he didn’t crush older savers (I mean that’s not exactly its main point but it’s what I found the most interesting). Here’s the money quote: “the best way to improve the returns attainable by savers was to do what the Fed actually did: keep rates low (closer to the low equilibrium rate), so that the economy could recover and more quickly reach the point of producing healthier investment returns.”  Healthier investment returns! Have to admit…he definitely hit that target right? I don’t know, I guess Bernanke blogging is a good thing.  I don’t mind insanely intelligent people walking us thru complex issues but it can’t read like a textbook. Anyway, we walked in to futures up 10 because Europe was having a good day and there were a slew of Biotech deals (was or were there?  I need an editor). Look, it’s month end/quarter end, we’re gonna need some happy price action out of this puppy or else negativity is gonna spew forth like so much whipped peas out of a 6 month old. Let’s see if we got it shall we?

After the open not only did our little baby eat his peas, he was buying energy and financials like he had just raised $100mm. Futures were up 10 points at the open, by lunch they were up 26 points! Why all the lovey dovey price action? I’ll tell you why….because markets love to punish people over their skis! Everyone was leaning a bit too bearish last week so a quick reversal makes people scramble to cover. Toss in month end / quarter end and you have the potential for a nice session. That being said, we are still in the “churn” I spoke about on Friday. For any of this to mean anything we need new highs and then AT LEAST one or two days confirming them. Wanna know why volume is so low right now? (Friday was 2nd slowest day of the year)  Because this 2050-2120 range has been with us for months. No real reason to act unless there is some kind of trend change. So Dear Market Gods, strike someone with thunder or lighting or some kind of giant wave because the boring is too darn high! Winners: ADI, HCP, ESRX, KMX, CNX, and NRG. Losers ALTR, LO, MYL, INTC, RAI, and CMG. However, dear readers, there were only 10 names in the S&P down more than 1% so that’s pretty tasty action.    

The final few hours brought more upside and by the time the bell rang all 10 SPX sectors were green and we had racked up a 1.2% win. Should we care though? I guess a bit, because obviously green is better than red. But the market is still range bound, and even with a big win today it’s only back to where it was last week.  Volume wasn’t spectacular so let’s save the big parties and back slapping for another time. Good day though, I won’t minimize it too much. Further gains are needed to ramp up interest!  

Final Score: Dow +149bps, S&P500 +122bps, Nasdaq +115bps, Rus2k +140bps. 

News Highlights:

We’ll end tonight with a human rubber band.   I swear, can you imagine what would happen if that thing breaks?  It’s like a carrier aircraft launch.  Would you ever do this?

Have a good night.