Today was interesting because of its break from the norm. Financials got sold off hard across the board while the markets put together a powerful rally. You haven't seen this in a long time. Two possible takes in my mind. The optimistic take is the market is discounting the bad bank which could (if run correctly) be good for the overall economy and hence industrialise, retailers, consumers etc and bad for banks. (like the S&L crises when the bad bank was instituted many banks equity got wiped ou). This would indicate a separation from the good and the ugly. A more pessimistic take (which is where I am at currently) is the financials will lead the market lower and this is the process before we start a further breakdown. We have seen the financials get sold off hard several times before the rest of the market finally followed.
I have a hard time seeing many more days of the markets up 2% while financials are down 2% plus.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment