Reflation trade turns cautious: 3% Market Sell-Off

see The market had a broadbase sell-off today with weakness in all sectors especially commodity stocks such as energy and materials. The 30% rally since March 9th has come to a screeching halt. A global growth warning from the World bank gave a bleak report cutting estimates for 2009 from a 1.7% contraction to 2.9% contraction.
Crude oil dropped $2.52 to $67.50. Commodity trades have been the rage but they have been correcting and today it was severe: energy stocks such as APC,DVN,COP, SLB and the ETF XLE were down 3-6% .
nat gas : (CHK,KWK and SWN),and coal stocks (BTU,MEE) were clobbered even more down 8% or more.
Gold and gold stocks offered no place to hide: GLD down 1.5% and GDX down 7%. Silver miner PAAS was down 4.8% with the metal SLV down 3.2%. Hedge fund fav FCX a gold and copper stock was down 11% and is now at 45 down from high of 60 in early June.
Healthcare and biotech fared better with losses of 1-2%.Healthcare has done relatively well the past 5 trading days.
The deleveraging story has investors even big winners with solid fundamentals like AAPL down 1.5%. and MSFT down 3.2%. The QQQQ was down 3%.
The Rayno 2009 Life Science Portfolio was down 2.3% today with one winner ABAX up 1%.
The commodity stocks and metals have been weak since the 10 Year treasury hit 4% two weeks ago. Treasuries have been bullish the peak of commodity stocks in early June.
FED news coming this week.

follow site Stay cautious, raise cash and wait for the next sector rotation which could be healthcare and biotech.

No comments yet.

Leave a Reply