With the war starting to recede into the rear view mirror, the market must now digest actual quarterly numbers as reported by public companies. This holiday shortened week will tell whether this is a “Good Thing” or not.
Before the open today, half decent news came out of the big financials: Bank of America and Citigroup each beat earnings expectations, though each did so while coming up short on revenues. Fannie Mae also beat.
These earnings – and upcoming releases from J.P. Morgan and Merrill Lynch on Wednesday – are significant to the Bull camp. Markets need leadership, and if there is to be any type of sustainable post-war rally, it will need direction from the financials. That makes the performance of the banking and finance index (BKX) an important tell going forward.
Technology also tends to lead the market when it’s in rally mode; Given present valuations, that may be asking a bit much. IBM and Novellus report today, Microsoft, Intel, Motorola and TI tomorrow, and on Wednesday, we hear from AMD, Apple, EMC and Mercury Interactive. The market is expecting little, but hoping for a lot from the tech sector.
While there is nothing funny about the horrors of War, we cannot help but be amused by the antics of Mohammed Saeed al-Sahhaf, the Iraqi Minister of Information. The star of his own “Theatre of the Absurd” al-Sahhaf made outrageous claims of Iraqi victories in battles against the U.S. Indeed, several commentators marked the end of the War not by the fall of Saddam’s statue, but by the failure of al-Sahhaf to come to work last Thursday. He has neither been seen nor heard from since then.
Where the Iraqi Minister is – and what his post war plans might be – was fodder for Dave Callaway. He suggested that al-Sahhaf was probably “running around the backstreets of Baghdad right now with Saddam’s nose in a box” hoping to rebuild his blown-up leader like they tried to do in Woody Allen’s “Sleeper.”
Callaway’s most interesting suggestion was how to put the Minister back to work after the war: Instead of working for Saddam, al-Sahhaf should find gainful employment in the U.S. as a corporate flack, spinning the debacle du jour to restore confidence in scandal-plagued Corporate America.
We think he may be on to something.
US Soldiers are Underpaid
‘Unlilateral’ Reporters See Different War in Iraq
Quotes: “The fundamentals are horrible – but the news is always worst at the bottom. The internal Minxy mechanism is showing constructive signs – but we remain firmly entrenched in a negative trend. Performance anxiety creates self-fulfilling demand – but optimism is historically bearish. And the allocation rotation into equities will drive prices higher – until it doesn’t.” –Todd Harrison, on why these Markets are so challenging