Market Briefing For Tuesday, February 18
Wartime conditions - increasingly prevail in Asia and even tentatively in parts of Europe, as London now quarantines (at least briefly) a number of flights arriving at Heathrow. In China it's worse, with food rationing and an increasing number of hi-rise buildings being forcibly blockaded, effectively isolating residents in their premises for unknown periods.
All of this simply leaves us in a domestic U.S. situation, benefiting from a huge surge of 'funds' (even from Europe, on-top of Asia), with no venues for investing (or at least very few) that offer sound price-value relationships.
Friday, February 14 was again defensive as anticipated, with rallies faltering and then absence-of bids ahead of the close of trading.
Following the President's Day holiday there probably will be a brief dip in the market, which will be followed by an intra week rally effort, given this will be a short trading week; but it's impossible to say for sure, as so much is dependent on news developments related to the WuFlu.
Regardless, I view market risk as significant, the global situation a bit precarious, and the values (especially in the bond market) particularly high risk. I remain comfortable in domestic-centric stocks as well as certain issues that benefit from the security focus that inevitably will be with us for a long time.
That doesn't mean the current situation can't prevail a bit longer, despite warnings of defensive action (which we got) going into the Holiday weekend. What it does say is that risks are on the rise, and one should be very cognizant of what can (though we all hope not) occur in the United States.