There’s a war against the bulls. A reconsideration of the four-month optimism. A regression to the mean. It’s a hiccup. The start of a long campaign of the kinds of dreary losses experienced in 2008. The beginning of the end. The pause that refreshes.
It’s certainly one of them.
The fact is, Wall Street has arrested the campaign of relentless losses that got launched back in March, when the S&P 500 (GSPC)vaulted 40% from its 12 1/2-year lows. Since then, it’s declined 7%. Which doesn’t, frankly, seem like much, given that anybody would anticipatethatthere’d be a retracement off that kind of rally.
Ifthe S&P goes back to 666, which is where it traded at its intraday lows March 6, we’ve got something else to talk about. Between here and the return of the demonic numerology, we’ve got a lot of ground to cover.
Some of which will be determined by the earnings reports that get underway in earnest on Tuesday, when Goldman Sachs (GS)posts its quarter. And there’s some reason for the bulls to be enthused, ifonly about that bank’s numbers. Goldman typically blows through its bogey, thanks to the leverage to its robust trading operations, and in a campaign in which trading – as well as equity underwriting – couldprovide some record-settling ballast, Goldman has a bright chance to surprise to the upside.
Something Meredith Whitney suggested herself on Monday.Whitney, the financial analyst, boosted her firm’s rating on the stock of Goldman, saying that she expected the quarter to come in well ahead of analysts’ forecasts: at$4.65 instead of the $3.48 that has been projected. Shares have risen 4% in premarket.
Investorsalso have kept an eye on shares of CIT Group (CIT). The business lender has struggled with insolvency concerns, and has spoken with regulators about means of improving its liquidity. Shares have declined another 18% in Mond! ay’ ;s premarket.
The biggest issue confronting Wall Street figured to be the challenge to risk appetite, something that’s been sorely lacking in recent sessions, as traders frightened by the downturn in energy prices, and scared by talkof another stimulus package, reflected some worries about lingering economic weakness by heading into safe havens like the Treasuries market and the dollar.