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Market Recap 8/26/2008

Posted on: August 26, 2008 - Email Article - Printable Version

Charles W. Petredis

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The markets were fairly calm today, the major indexes were never more than +/- 0.75% at any point during the trading session. To the right you can see the daily chart of the S&P 500. Volume was weaker than average, I think this probably has to do with either the long weekend coming up or the amount of uncertainty stemming from the Russia/Georgia crisis among many other things. The remainder of the week brings us a considerable amount of data, here are a few key things to watch out for during the remainder of this trading week:

Wednesday - Crude oil inventory report and refinery utilization report
Thursday - Preliminary GDP estimate
Thursday - Natural gas inventory report
Friday - Consumer sentiment report

I definitely would not be surprised if you saw massive volatility around 10:35am on Wednesday and Thursday. The energy markets this week has been affected by the Russia/Georgia situation suffering larger declines than any other sector.

Bernanke and the Federal Reserve released their minutes today and it seems almost a guarantee that they will be holding the Federal Funds Rate at 2% at the next meeting on September the 16th. This news shouldn’t weigh on the markets for the rest of this week and I would expect that Thursday’s GDP number will be much more important.

The airlines are having problems again and a glitch in the flight control systems caused a number of delays and cancellations today. Delta Airlines [DAL: 12.45, +0.50 (+4.18%)] was down big along with US Air [LCC: 9.04, +0.71 (+8.52%)] and the rest of the sector. These stocks have actually bounced way off of their annual lows but I would be very cautious going forward because if crude races back up I would expect these stocks to race down even faster.

Mattel Inc. [MAT: 16.29, -0.06 (-0.37%)] won only $100 million dollars in their Bratz lawsuit after hours and the stock closed the extended trading session down $0.29 to $19.95. If this sort of news doesn’t move the stock price that much I doubt we are going to see a ton of stock specific volatility going forward.

-Charles Petredis

Disclosure: The author does not hold any positions in the companies mentioned.

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