Just Buy
A wave of reckless optimism has taken over the financial world. We saw new highs in U.S. equities yesterday and European today. As I wrote before “better taken expected” has taken over the investor hart and souls. It doesn’t feel rational for me so I will pass on being long for the time being.
On the earnings announcement front yesterday we had good results (better then consensus, worse than market expected) from Goldman Sachs. In short Goldman has remained one of its kind in the proprietary trading and that will continue. Bloomberg story: Goldman Sachs’s Earnings Surge Falls Short of Record.
Citigroup on other hand reported loss, better than consensus. The New York Times story: Citi Struggles Even as Other Banks Show Strong Profits. The results raised questions on accounting policies an reduced provision reserves. Reuters link: Citi’s hocus-pocus; Blomberg’s Jonathan Weil commentary: Mark-to-Make-Believe Turns Junk Loans to Gold; and Zero Hedge graphic follow through: Is Citi Back To Its Old Accounting Tricks; And Are Accountants Papering Over A $735 Billion Valuation Hole?.
Google reported excellent results; beating both earnings and revenue consensus. Reuters story: Google back on track for growth, eyes deals.
Asia beside Nikkei, which ended marginally up, ended lower.
U.S. equity futures are signaling negative opening on revenue drop at General Electric. Reuters story: GE posts Q3 results; shares edge lower.
My short crude oil trade performs lousy; will wait unless it is stop loss-ed. Yesterday EIA weekly petroleum stats reported what I expected large drop in refinery utilization 80.9% vs. 85% last week. Distillate inventory off course dropped; and market has taken on my view negative development as a positive one. Imports also edged lower; if you import less and refine less the destilate stockpiles will fall. Frustrated.