The Money Map Advantage
Wednesday, April 19, 2006
By Horacio Marquez
Email – #39
** Our Portfolio Flies As the Market Approaches Our View that the Fed Is Almost Done
Yesterday, our portfolio outperformed the market’s best day of the year, as it rallied 4.03%, vs. the S&P 500, which gained “only” 1.74%. The feeding frenzy started in the morning with core PPI coming in at only 0.1%, and 1.7% year-on-year rise. This is clearly below the 2% estimated maximum limit is believed that the Fed might tolerate.
Adding to the bullishness, housing starts and permits were weak across the nation, at the weakest pace in a year. The second strong decline in a row for housing. As I have written here many times, about $1 trillion in adjustable-rate mortgages will reset interest rates in the coming year and a half, and the Fed interest rate increases will make this resetting very painful, especially for the speculators, who comprised as much as 55% of home purchases last year.
To cap this, we got the Fed’s minutes and Fed Governor Janet Yellen’s comments, which revealed concerns by some Fed members that tightening might be overdone and that current rates might be already neutral. All of this with a market that had been short and unable to close shorts, especially in Brazil’s Unibanco (NYSE: UBB), and right after seeing industrial activity picking up in February, surprising analysts.
But the icing on the cake was the 10.6% rise in Peabody Energy (NYSE: BTU), boosted not only by the record oil prices, but also by the company’s results blowing away analysts expectations for earnings and revenue. Profit more than doubled and prices remained high.
I am getting ready to pull the trigger soon. Even as we see that Brazilian banks are still oversold, if today’s CPI is well-behaved, as I expect, and keeping in mind that it is becoming clear that the Iran crisis is going to move slowly along diplomatic lines, I will be giving you yet another reason to celebrate.
Enjoy and profit,
Horacio Márquez
Current Portfolio:
Stock & Symbol
Current Price
Comments
Unibanco (NYSE: UBB)
$77.53
Buy. Sell stop is $59.58.
Peabody Energy (NYSE: BTU)
$56.85
Buy. Sell stop is $35.
IShares Brazil Fund (Amex: EWZ)
$43.30
Buy. Sell stop is $33.79.
BHP Billiton (NYSE: BHP)
$46.35
Buy. Sell stop is $32.70.
Banco Bradesco (NYSE: BBD)
$36.11
Buy. Sell stop is $29.45.
Petrobras (NYSE: PBR)
$96.07
Buy. Sell stop is $75.47.
Mitsubishi UFJ Finan. (NYSE: MTU)
$16.01
Buy. Sell stop is $12.93.
iShares Japan Fund (AMEX: EWJ)
$14.80
Buy. Sell stop is $12.83.
Tenaris (NYSE: TS)
$222.10
Buy. Sell stop is $117.27.
MSCI Austria Fund (AMEX: EWO)
$32.35
Buy. Sell stop is $26.51.
Market Watch
NASDAQ
1528.95
0.00
SP 500
813.88
0.00
DJIA
7749.81
+89.84
As Of 6:12AM 3/26/2009
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