Naked Hedge Fund Weekly #37

Anticipation

YTD 6 trading days. YTD NHF Portfolio +0.52% vs S&P 500 -1.1%

Below is a PDF with the Naked Hedge Fund weekly.  Click on it for the 2 page report.

NHF Weekly 8-1-10

What a difference a month makes — or does it? The stock market took a bullish path through July, which seemed unlikely when June was coming to an end. Specifically, the S&P 500 increased 6.9%.

o  The change in private inventories contributed 1.05 percentage points to Q2 GDP while government spending contributed 0.88 percentage points. These contributions diminished the quality of Q2 GDP growth, especially the government contribution which substantiated the concerns that the economic recovery effort is not as self-sustaining as one would like to see at this juncture.

o Annual benchmark revisions dating back to the first quarter 2007 accompanied the Q2 GDP report. The gist of the revisions is that personal spending has not been as strong as thought; that spending on equipment and software has been stronger than thought; and that the contraction from Q4 2007 to Q2 2009 was deeper than previously believed.

o Roughly two-thirds of the S&P 500 has reported results for the June quarter.  By all accounts, the earnings growth for the second quarter has been quite strong. Thomson Reuters informs us that S&P 500 operating earnings are on track to increase 36% while revenues are on pace to increase 9% versus theyear-ago period.

o At the end of the week, the S&P 500 was little changed from where it began the week. That is not all that bad given the 3.6% gain in the prior week, but it did not go unnoticed that the S&P 500 was unable to hold a posture above its 200-day simple moving average, which it pierced on Monday. From its closing level on Monday to its closing level on Friday, the S&P 500 declined 1.2%.

o  Earnings news and economic data will continue to move the market in theweek ahead. Three Dow components — Procter & Gamble (PG), Pfizer (PFE) and Kraft (KFT) — are on the reporting docket. The biggest report of the week,though, will be deferred until Friday, which is when the July employment reporwill be released.

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One Response to “Naked Hedge Fund Weekly #37”

  1. Nice start so far with the breakout above the 200 day moving average that we were looking for. Now the question is if it can hold on through the week with the Unemployment numbers looming.

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