Looking Abroad
Stocks on all three major benchmarks took a thrashing Monday, setting September
on course to live up to its reputation as the worst month of the year for
equities. There was little money flow into exchange traded funds as no ETF rose
more than 1%. Those that did rise were overseas funds that might seem like a
questionable play given the inconclusive economic results and the battered
single currency in Europe. What was more noteworthy was the precipitous declines
in the most speculative–and most volatile–ETFs.
The Swiss iShares
(
EWL |
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PowerRating) nudged out the best gain,
coming off a four-month low to a positive 0.85% finish. The Japan
(
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United Kingdom
(
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modest gains. Given the beaten down status of the euro (trading at an all-time
low), the Swiss franc (trading at a 14-year low), and the Japanese yen (also
damaged goods), the rise may signify traders’ perceptions that the dollar will
stutter as the US economy buckles under the strain of higher oil prices, rather
than a more bullish stance on international equities. If there is a foreign
exchange effect occurring, currency traders might want to take note that the
Swiss franc has been leading the euro slightly and its slightly better finish
than the euro may be, as in recent days, a heads up that single currency will
rise Tuesday.
Although it did not win, place, or show, the Energy SPDR
(
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not been a dichotomous split between oil and oil service stocks. The XLE,
nonetheless, finished at its second best level ever, highlighting the
near-crisis like feel of the global oil situation. Nearby (October) New York
crude oil eclipsed $37 a barrel after unsettling events in Iraq reminded people
of when oil was last this high; during the Persian Gulf war.
Exxon Mobile
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XLE, following through on Friday’s expansion range breakout on its best volume
for the year 2000. Driller Halliburton
(
HAL |
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3.8%, despite a call by a Morgan Stanley analyst to include it in a more
selective portfolio that takes into account unexpectedly slower US economic
growth and steadily high energy prices.
The most speculative parts of the market took the hardest
hits Monday. The B2B Internet HOLDRs
(
BHH |
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average and the Biotech HOLDR
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Ariba looked abajo as it led the way down on the BBH while bioglams
Millennium
(
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(
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PowerRating) tanked over 13 1/2
each.
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