Global Update

Hickey and Walters (Bespoke) submit:

It’s no surprise that Financials are the worst performing sector since the SEC announced that it was suing Goldman Sachs (GS) for fraud. However, a look at the performance of other sectors since last Thursday’s (4/15) close highlights some puzzling trends. If GS was really the cause of the sell-off, why would sectors like Materials, Industrials, and Technology be underperforming? Concerning Materials, there is one convoluted theory going around that GS’s involvement in commodities has caused an exodus out of Material-sector stocks, which would be adversely impacted from weaker commodity prices. Even if that reasoning had any validity to it, how are we supposed to rationalize the underperformance of Industrials and Technology? Was GS manipulating the pricing for semiconductors and networking gear too?

A more likely explanation for the the weakness is simply that with markets as overbought as they were, investors were looking for any potential excuse to sell, and on Friday they got it. Since then sectors that led the rally have underperformed, while sectors that lagged are outperforming. GS’s news has been billed as a harbinger of tighter government oversight in the financial sector, but like other "groundbreaking events" in the past, this news too will likely fade to the background.

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Sean Hannon submits:

Money magazine recently published an article where some of the nation’s leading business owners offered advice to readers. With a diverse list of experts and many nuggets of wisdom, at times the advice starts blending together.

However, one piece of information caught my eye and separated itself from the rest. The wisdom came from Dallas Mavericks owner Mark Cuban and addressed investing. Cuban has a long history as an entrepreneur and famously sold Broadcast.com to Yahoo! for $5.9 billion. His advice centered on investors’ need to perform adequate research before investing. He rhetorically asks, "Unless you think you have better insight on a stock…why are you trading?"

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Frederic Ruffy submits:

Sentiment

The major averages battled back from early losses and are trading mixed late Monday. The table was set for early losses after markets fell across Asia and Europe amid ongoing concerns about the implications of the SEC fraud charges against Goldman Sachs. Those worries seemed to overshadow better-than-expected earnings from Citi (C) as well a 1.6 percent increase in the List of Leading Indicators in March.

However, after sluggish action in the first half of trading, the tone improved and, with an hour left to trade, the Dow Jones Industrial Average is up 55 points. The tech-heavy NASDAQ is down 7 points ahead of earnings from IBM due out after the closing bell. The CBOE Volatility Index (.VIX) hit a morning high of 19.55, but was recently down .19 to 18.17. Trading in the options market remains active, with about 7.7 million puts and 8.7 million calls traded.

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Click on the image to enlarge a photo of a daily shiur delivered by HaRav Pinchus Breuer Shlita, taking place for bochurim who have turned the Sadigura Beis Hamedresh in Golders Green (London) into a Yeshiva due to the current flight ban to hit the UK over the Icelandic ash crisis.
Over 50 bochurim spend a [...]

R. Scott Raynovich submits:

On Friday the SEC lawsuit against Goldman Sachs (GS) precipitated a global selloff in just about everything on Friday: Stocks, commodities, pieces of paper. What gives? To me, it was unbridled and illogical panic.

After all, the SEC launches lawsuits all the time — and often fails to win them. What’s more, this was a civil suit, not even a more official prosecutorial effort by a tougher organization, such as a District Attorney.

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