And right on queue: Transports (IYT)

Written June 22nd, 2010

We’ve been discussing the different underlying messages the market is saying, but recently, a lot of the messages have been quite clear:

  • We have real estate rolling over as seen through housing numbers. Any uptick in commercial real estate seems like a last gasp as…
  • ECRI leading indicators are rolling over. Recession schmecession – it doesn’t matter what you want to call it, but without jobs in the US, there is no growth in consumer spending. We’ll have periodic upticks as built up demand vents in certain weeks or months, but the consumer is retrenching. Now you might have expected all the global stimulus funds to keep the party going for a while longer, but…
  • Europe is starting their austerity program. Guess what, they are so structurally flawed that even THAT doesn’t help the euro. However, it will lead to a slowdown in growth in the eurozone, which wouldn’t be that significant, except…
  • Europe is China’s biggest export destination. So you’d think the Chinese would just let things be, but instead, they’re tapping on their brakes and NOW decide to make statements about revaluing the yuan? Aside from a political grandstand to show how weak they believe the Obama administration to be, this is probably cutting your nose to spite your face, because they’ll be doubly hurt when…
  • US growth slows along with Europe’s and China’s internal markets prove to be fake. Why? As I’ve mentioned before…because THEY”RE COMMUNISTS! Still, the markets looked like they might like the news, except, the rally quickly faded yesterday and today. Throughout, it was pretty surprising that the Dow Transports were holding up…
  • And still are, by most measures. But our goal is to move forward and today’s 3.75% might be a harbinger of what’s to come:

  • So that leaves us with AAPL. What a company?! What a stock?! Can it last? Me thinks not.

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