MARKET BEAT: August 31, 2007

EARLY TRADE

Word from the man on ‘Da Hill and testimony from “The Man on the Mountain” are spearheading more than a few investors’ four-day holiday efforts. As of 10:45 ET, the S&P500 “SPYder” () and Naz’100 () are up .85% on end of month and seasonal satisfactions.

Volatility reigns once more, helped along by thin pre-holiday participation. However, for the bulls, today’s “moovement” is a good thing, as volume might be important to some, but “price is always nice.” And on that front investors are finding the broader averages climbing happily higher thanks to efforts from “Dubya” and so far, so good testimony from the other Chieftain “pow-wowing” before a conference in Jackson Hole, Wyoming.

Already scheduled to be the week’s busiest in terms of reports officially on the docket, a premarket surprise by President Bush sent futures soaring and officially stole the day’s mojo as well. In an effort to help struggling subprime mortgage borrowers who didn’t bother to read the fine print (sorry folks), the President is outlining reforms to the tax code and Fed Housing Administration [FHA] standards as to circumvent a potentially nasty default situation for the American Dream. “Mooyah Wall & Main Streets!”

In credit-related stocks, shares of the financially () and homebuilding () ensnared such as Countrywide (), Freddie Mac () and Lehman () are all finding relief bids. Separately, Accredited Home Lenders () is topping the percentage gainers list, up nearly 40% after receiving the additional good news of suitor, Lone Star Funds, offering $8.50-a-share for the company. LEND is up and overreacting to the tune of 2.52 points to 8.83.

In and around more idyllic hills and natural surroundings, testimony from Ben Bernanke is thus far helping to maintain the market’s green manicured playing pitch. In a nutshell, the Fed Chief said it “will act as needed” to prevent the economy from falling victim to problems in the financial markets. Keeping investors on their little anticipatory toes, the speech doled out little evidence to suggest a rate cut is a done deal, despite the “Woes are us” from Wall Street types and their “Drive for Five” in the fed funds come September.

On the data mining and officially sanctioned side of the economy, a handful of figures are also acting mostly as support for the market’s existing bid. A release on income and spending came in stronger-than-expected with increases of .5% and .4% respectively, versus estimates of .3% for each. Additionally, the core PCE Index rose just .1% and one-tenth below views, pushing the year-over-year reading for the Fed’s favorite inflation gauge to a very manageable 1.9%. Separately, in-line and assuaging readings on sentiment from folks in Michigan (83.4 vs 83), regional manufacturing out of Chicago (53.8 vs 53) and slightly stronger factory orders of 3.7% have all been posted to Wall Street’s history books, but on a day in which class looks to be dismissed early for good behavior.

GROWTH & MOVERS COVERAGE

EARNINGS CALENDAR

Select reports scheduled after the market close:

REPORT CALENDAR

Economic releases on tap:

INDICES & MARKET MOOD

A few folks were initially seen clamoring over a certain box maker and maybe yelling out, “Dude, it’s a Dell.” Unfortunately, the computer and peripheral giant () is currently underwater by ten-cents after a mixed, but not all that bad sounding report. I’ll chalk up the effort to a bit of well-deserved profit-taking in a stock sporting a “V” shaped cup and likely in need of a rest.

Elsewhere and in the broader averages, the same can’t be said, as far as resting just yet. Not that that’s a bad thing. In appreciating the nascent FTD and a good response by investors to the day’s stories, all told it’s a very good thing. However, short-term conditions are now looking a bit overbought in places like the leading Naz.’ In saying that, with much of the class already playing hooky and a new school year Wall Street-style opening its doors come next Tuesday, enjoying some beach reading like today’s Growth Stock report and working on a tan instead of fresh trades sounds about right.    

Chris Tyler
Staff Writer & Options Strategist
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