E “Claw-Back” Day

My favorite sector, drug startups, was mixed today, with the kerfuffle over whether or not Jews are allowed to pray at Al Aqsa mosque hit the Israelis among them. For the record, both for political and religious reasons Jews are not allowed to pray or even enter Al Aqsa, to which Mohammad came on a flying carpet on his way to heaven. The reason is that nobody knows where the Holy of Holies in the former building there, the Temple of Jerusalem, actually stood. So entering the mosque means you may be standing on top of a holy sacred place where you are not allowed to stand under Jewish rules.

Today is “claw-back” day according to TD Ameritrade-Schwab market strategist JJ Kinahan. Pre-open the DJIA gained 100 points and it opened up 400 points. The rally was pretty general except for stocks that reported bad news and not necessarily even then. Among the big fallers yesterday, by 6.8%, was Autoliv ALV of Sweden which missed on its Q2 earnings and cut its full-year sales volume forecast. Yet this share, which we sold some years ago, actually rallied back up about a quarter of the 6.8% it fell yesterday, up 2.01% at the opening. While European markets went up, both the Nikkei in Japan and the Hang Seng in Hong Kong copied Wall Street and fell.

The rally was just as irrational as the selloff. Among the triggers: the price of a barrel of Brent crude fell by $5 and the futures market was even less upbeat about energy demand because hedge funds cut their shorts so much at the price fell to $66.42/bbl. Another irrational move.

Business newspaper article

image source

US majors like IBM (which is reported yesterday) GE, and American Express (AXP), and foreign ones rose, but energy stocks were mixed because of the oil price confusion. More follows:


*Orbia Advance, the former Mexichem, was today's biggest gainer, up 18.64% on news that it will report its earnings next week. This stock is hard to cover because despite the change in its name and the rising international crop feeding systems it is acquiring, it continues to be quoted in the USA under its former ticker symbol, MXCHF. It will report on July 28. Ask why it is hiding behind a bushel basket.

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William K. 2 days ago Member's comment

Always interesting and educational. I have been reading about the randomness of the market, and share prices, and it appears that the problem in correctly knowing what will happen next and in the more distant future is a lack of knowledge about the entire situation of a company or fund, coupled with the completely random effect of the emotions of an unidentified crowd of individuals somehow linked to that object. So this lack of information equates to randomness, even though it is not truly randomness, but a lack of information.