Has the Santa Rally Started?

Thanks to a nice rally over the past two weeks, the market is right at the upper bound of a frustrating trading range. Every time the index has reached this level, it’s fallen back. We’re now about 1% away from a four-year high.
I’m curious if we’ll finally be able to break out. The market is set to open slightly lower today. I’m inclined to think we won’t break out just yet since the volatility index is still so low, but that’s just a hunch. I’m still rooting for this market.
There’s yet another company going private and this time, it’s a big one. Koch Industries is buying out Georgia Pacific (GP) for $13 billion. Sheesh…no one wants to be on the market anymore! This deal will make Koch the largest private company. Koch is run by Charles and David Koch, the sons of the founder. The brothers have been very active in libertarian circles. In fact, David was the Libertarian Party’s veep nominee in 1980 when the ticket got nearly 1 million votes.
The good news is that the consumer is still happy. Lowe’s (LOW) reported very good earnings this morning. The company topped expectations by four cents a share. Wal-Mart (WMT) reported earnings inline with expectations. The company averaged over $800 million in sales a day for the quarter.
This week is also the time for inflation reports. Wholesale prices come out tomorrow, and consumer prices follow on Wednesday. Thanks to plunging oil, we’ll probably see the biggest drop in inflation in decades. The market, however, will be more focused on “core inflation,” which is inflation minus volatile food and energy prices. As usual, I don’t expect much news here.
Also, AIG (AIG) is set to report earnings. The stock has been rebounding, but given its earnings restatement, and restatement of the restatement, I have no idea what to expect.

Posted by on November 14th, 2005 at 9:53 am


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