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Good Morning!
Stocks mounted a rally of historical proportions yesterday as investors cheered the coordinated moves between global central banks to strengthen and recapitalize the financial system. That said, much work remains to restore confidence between banks and within the commercial paper market. Furthermore, the rally yesterday was just as volatile and indicative of a schizophrenic environment as when stocks were plunging.
Bottom line. This will take time, but we do believe these actions by the Fed and U.S. Treasury will ultimately work. Investors would be wise to begin putting assets back into the market, but on a systematic basis. Also, watch at what level investors step back in after this rally ends and a pullback occurs. That will tell a lot about the health of the stock market. On the fixed income/bond side, look at high grade corporate bonds, convertible preferreds and general obligation municipal bonds/bond funds.
Dennis Fagan
Chris Fagan
p.s. It looks like the stock market Gods made a tradeoff yesterday, a massive rally for a loss by the New York Giants! Despite the fact that we are big Giant fans, we’ll take it!