Day One

2 p.m. made all the difference….
At 2 p.m., the market got the minutes from the latest Fed meeting and a rather blah day turned into a darn good rally. The good news is on the first day for our new Buy List, our stocks were up 0.78%. The bad news is that our stocks were creamed by the broader market. The S&P 500 was 1.64%.
Basically, today was a microcosm of 2005. Energy stocks were up huge. Google (GOOG) was up by $20 a share, or $6 billion in market value. Oil soared over $63 a barrel. The S&P 500 Energy Index (^GSPE) was up 4.5%. Just like much of last year, most of the other sectors were bunched together. Make no mistake though, this was a good day for stocks. Today was the best rally since October.
The whole Russia versus Ukraine thing really spooked traders in the commodity pits. I mean, aren’t those two always fighting?
My strategy for ’06 was just not working today. The sectors I like least (energy, gold, materials and tech) were the market leaders. My favorite areas pulled up the rear. Our best stock was surprisingly, Golden West Financial (GDW). I love GDW, but it’s normally so quiet. Fair Isaac (FIC), Dell and Donaldson (DCI) also did well. Our health care stocks were particularly weak today.
The irony is that one year ago we had the complete opposite news. The Fed minutes indicated that there could be rates increases through 2005, and the Dow lost about 100 points.
I think the rally in the dollar may soon come to an end. Of course, much of the media has been calling for that for some time. The European Central Bank just raised interet rates for the first time since 2000.
Two other things to note: In Slate, Daniel Gross weighs in on declining volatility.
Lastly, it’s good to see Charles back at the Kirk Report.
Let’s hope Day Two goes a lot better than Day One!

Posted by on January 3rd, 2006 at 11:20 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.