The Market Today

Sheesh…what a snoozefest? I think traders must still be on vacation. There just ain’t much going on right now. The Dow, Nasdaq and S&P 500 all closed boringly higher today. Our Buy List gained 0.25% today to the S&P 500’s 0.13%. For the fourth quarter, we’re up 6.04% to the market’s 2.42%.
Yesterday the market didn’t like the inverted yield curve. So oil and bonds went up, and stocks went down. Today, it was just the opposite. This time, energy stocks led the way and everyone else was quiet. Oil crept back over $60 a barrel. I really doubt it will be able to stay that high.
Although yesterday was one of the worst days for the market in two months, it didn’t seem so bad to me. Perhaps it’s because volatility is so low. As I’ve said before, we’re in the middle of a remarkable bear market for risking-taking. It seems to be a worldwide phenomenon. This past week, the VIX (^VIX), the volatility index, again hit some of the lowest levels in over a decade.
I have a hard time believing that the 10-year Treasury bond (^TNx) is currently yielding just 4.38%. Who cares about the budget deficit if we can borrow money so cheaply?
The one stock that wasn’t boring was Frontier Airlines (FRNT). For the record, I still like Frontier a lot even though it won’t be on next year’s Buy List. It’s not anything against the stock, I just think Frontier is a bit too volatile to have on the Buy List. You can see why today. The stock opened at $9.25, dropped to $8.90 and rallied to close at $9.36.
I noticed that Dell (DELL) is still a good buy. The shares are back below $31. The big surprise was that S&P decided to add Whole Foods (WFMI) to the S&P 500 instead of Google (GOOG). Whole Foods’ stock came close to hitting $80 a share. I’m sorry to say that I wouldn’t pay half that much.
Remember Lucent (LU)? Me neither but it was apparently very popular a number of years ago. Anyway, for fiscal 2005 the company made $1.185 billion. Not bad, but here’s the really funny part: $973 million of that was due to a “pension credit.” So 82% of the company’s profits are solely related to the fact that’s pension fund is in the black. In short, I wouldn’t buy it.

Posted by on December 28th, 2005 at 5:36 pm


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