6/18/2015 0 Comments
USD down at 1-month low on Fed dovishness and weaker than expected inflation data. Biotechs leading today's equity rally on analyst upgrades and more M&A speculation. Tech lags on ORCL earnings miss, but semiconductors are performing. Treasury yield curve steepening.
Lots of positive economic data out today. The Philly Fed Survey indicates a pickup in manufacturing activity boosting belief in Q2 GDP growth bounce. Jobless claims & current account deficit both better than expected. The only piece of weak data was the greater than anticipated build in natural gas inventories. Good data and dovish Fed; only Greece could ruin today's rally!
Stopped out on remaining small front end short yesterday. Was wrong on Fed dovishness, seems obvious after the fact. Adding to some health care names. ORCL weighing on tech sector, but may add on semis. Buying large caps with exposure to non-USD sales because of weaker USD today. Believe the strong USD will re-establish itself, but this may take a little time. In the meantime, large caps may report a better Q2 with USD down from Q1.
Michael Grove, CFA