D&D Note (4-3-2012)
Fed minutes drove markets (which were under pressure all day) down in the afternoon session with an unlikely outlook on offering anymore QE (Quantitative Easing – i.e. printing money) anytime soon. This Bull Market has been heavily driven by the sugar fix provided by the FED through QE. Whenever the FED hints at another round of easing the markets react by going up, and today we saw the inverse. Most likely we won’t see another round of QE until at lest operation Twist ends in June. A major worry that could happen if there is a QE3 is that Oil prices will shoot up and derail the consumer.
Gold saw a big downward move immediately following the FOMC minutes release, which many are simply calling a knee-jerk reaction. Gold is still risky with potential downside along with a lot of potential upside – although the more the risk in the trade the more the potential payoff.
Car sales surged in March, Ford (F) posting best sales in four years rising 4% and General Motors (GM) sales surged 14.2%.
Apple (AAPL) continues to hit new highs – with one analyst coming out predicting $1,000 price target by year end. That valuation would make it the first Trillion Dollar Company ever. Folks joke that there are four asset classes; Stock, Bonds, Commodities, and Apple.
Avon (AVP) turns down $10 billion offer from Coty Inc. yesterday – stock surged 17% and remained flat today.
Job numbers come out this Friday (market will be closed for Good Friday) – so watch next Monday’s trading to be dominated by that Jobs number, and this weeks trading centered around leading up to that number.
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