10/06/2014

Friday was an strong day for the S&P 500. From the get go it took off and, given that S&P futures are trading 0.4% above fair value, that momentum has carried all the way through the weekend. And yet there is still extreme fear in the market. In nine of the last 12 trading sessions we saw the Dow Jones swing by triple digits. The Russel fell 10% into correction territory. And as foreign markets continue to putter along, the US dollar continues to rapidly build strength, casting a shadow over fourth quarter earnings.

Also over the weekend/late last week we saw some breakups. HP decided to split into two distinct companies, dividing its computer and printer business from its corporate hardware and service operations. This is one of the final stages of a five-year complete restructuring plan aimed at turning around the company. Late last week eBay also announced that, in a complete reversal of strategy, it was splitting off PayPal into its own company. PayPal’s revenue has been growing at a pretty decent clip of 19% a year, nearly doubling eBay’s.