AM 1150 Kelowna - Radio Ralies & Reversals

Well the news today is the renewed drop in US housing starts, and on this side of the border, the Bank of Canada's decision to continue raising the overnight rate, which is now at .75% (but still quite stimulative). Coupled with disappointing earnings from blue chips IBM, Texas Instruments, and Goldman Sachs - North American stock indices have been trading mostly in the red today. Reporting after market close today is Apple, and the market will be interested to see how the iPad is helping both top line and bottom line.

There were some interesting comments out of Credit Suisse's quant team this morning - They observe that recent measures of Intra-Portfolio Correlation (or the tendency of stocks within a portfolio to move together) are at or near historical highs. This is important because it reduces the benefits of diversification based on fundamental stock picking factors, such as valuation and quality; however, this can create opportunities as correlation decreases and relative value opportunities emerge. Sectors which have seen large declines in intra-portfolio correlation and which might offer potential improving conditions for stock picking are materials and healthcare.

Lastly, Scotia Capital has released this weeks 'Weekly Market Strategy' report. If you'd like a copy ask us at yourlifeyourplan.ca or call 250-868-5525.

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