In a classic case of when bad is good, Goldman Sachs 1Q profit plunged -53% but EPS was $3.23 per share, well above the Street's $2.58 expectation. Lehman Bros 1Q net plunged -57%, but EPS was $0.81 vs $0.72 consensus.

A couple minutes ago (7:45am ET), Morgan Stanley (MS) also beat expectations ($1.45 vs $1.03 EPS), and while the result was sharply down from the comparable period ($2.17) a year earlier, the market is gaining strength.

The Federal Reserve Bank slashed the Fed Funds rate -75 basis points and cut the Discount Rate a full -100 bp. This move had been expected, so traders cannot say there was a "surprise" factored into yesterday's booming price action.

But, the DJIA (+420 +3.51% to 12393), S&P 500 (+54 +4.24% to 1330.74), Nasdaq Composite (+91 +4.19% to 2268.3) and Toronto Composite (+185 +1.42% to 13136.7) enjoyed one of the most bullish days in many years.

Particularly strong sectors were: Financials (XLF +8.40%), Cons Discretionary (XLY +5.26%), Technology (XLK +4.49%) and Energy (XLE +4.37%).

The strongest industries were ones the Fed was trying to help most: Broker-Dealers ($XBD +11.6%) and Banks ($BKX +7.24%). The industry that bankers love to hate, the Goldminers ($XAU -3.63%), was one of only a couple to suffer.

Not surprisingly, of the top performing and worst performing Cara 100 companies, the top four were banks and brokers: UBS (+17.0%), GS (+16.3%), IBN (+12.5%) and HDB (+12.1%) and the bottom were all in precious metals: GG, ABX, GFI and SLW.

On the economics front, the news was negative as Headline PPI for February lifted +0.3%, according to the US Labor Department, and US Housing starts in February fell by -0.6%.

Crude Oil ($WTIC) lifted +$4.27/bbl to close at 108.50.

The 30-year US Bond ($USB -0.69% to 120.64) dropped while the yields on the 30-year ($TYX +1.10% to 4.329), 10-year ($TNX +4.13% to 3.451), and 5-year ($FVX +9.26% to 2.406) all lifted sharply.

The T-Bill yield dropped -9.1% to 0.900. At noon Monday, the T-Bill yield was 1.085.

The $USD gained +0.44% to 71.76 on the back of the Yen, which plunged -1.02% to 101.82 as capital flooded back into equities. Other currencies like the Euro (+0.32% to 1.5773), Pound (+0.78% to 201.71) and Cdn Loonie (+0.35% to 100.50) were a bit stronger.

Despite a stronger $USD, $GOLD lifted +$1.70/oz to 1004.3.

Early today in the futures market, the June Euro is 1.5644 (yesterday this time was 157.40), June Crude 106.64 (vs 107.075), and March DJIA 12352 (vs close yesterday of 12393).

The spot precious metals prices at 7:45am ET are: gold 1003.9 (low earlier today of 988), palladium (468 (473 this time yesterday), platinum 1932 (2000 yesterday this time), and silver 19.76 (20.22 at this time yesterday).

Europe had been weak, but has gained strength following the Morgan Stanley results. The FTSE is 5561 (5606 yesterday close), CAC 4563 (4586), and DAX 6346 (6393).

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Comments & Outlook

It makes no sense that Goldman Sachs can soar +16.3% in market capitalization in a single day when quarterly earnings were reported to have plunged -53% in the comparable quarter.

Even if EPS of $3.23 beat the Street's consensus of $2.58 that is just by 65 cents, which multiplied by four quarters is just $2.60/share in annual earnings above consensus. Was this “surprise” really worthy of a $10 billion bump in Goldman market cap, or did the moon-shot have more to do with HB&B (ie, the Club on Wall St) protecting one another?

It could be that Humungous Bank & Broker have a humungous valuation problem that they’d prefer to sweep under the carpet this month end, which just happens to be the end of the quarter.

So, as I see it, this is just putting on appearances. Now, I could be wrong, but, following the pump, for the same reason, from Morgan Stanley and Merrill Lynch, we’ll not have to wait long to see the consequences of worsening financial conditions. I suspect that around the end of the month, the equity market levels will have returned to the elevator heading down.

Does anybody here see the earnings of these broker-dealers strengthening this quarter and next? Therein lies the clue as to the trend and cycle direction of this market.

Also, the gold stock leader Barrick (ABX) is in real trouble. For the change of trend to be confirmed, there is a need for a Triple Bottom ($49 on ABX.T) breakdown to $48.00. If any of you own this Cara 100 stock, it is the time to be very cautious. It is the reason I published my Buy/Sell Advisory on Goldcorp (GG/G) on Feb 28, which I think is now headed to the mid to low 30's.

Today, Credit Suisse came out with an analysis that the worst of the world's financial conditions is yet to come. Here is the conclusion of this particular report:

Following today’s smaller-than-expected cut, we have decided to retain our baseline forecast that the federal funds rate will reach 2% in the near term, before the FOMC pauses to assess the effects of impending fiscal stimulus on the US economy.

The Fed has done a lot over the past week, to put it mildly, with two separate actions to address liquidity issues in the markets and today’s 75-basis-point cut in the funds rate. In fact, today’s statement suggests that Fed officials have grown uncomfortable with the speed and degree of intervention, and will be reluctant to do much more unless absolutely necessary.

Nonetheless, we still see the risks to our funds rate forecast as tilted to the downside. In the short term, either a particularly bad batch of economic data or a resumption of financial market stresses could push the FOMC to a 50-basis point cut when it meets on April 30, rather than the 25 we currently expect. With the economy likely to grow below trend for much of the next year, we see a possibility of further rate cuts in early 2009 as the fiscal boost wanes.

To end on a positive note, I believe that we ought to be lining up the stocks of ten to twenty companies to start accumulating. When you look back over charts and see the price and volume tracking so much higher, you can say, “There but for the grace of God and the wisdom of this community and the knowledge I have acquired here, go I.”

Comforting, isn’t it?

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Links & Charts

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International Economics Review

US Economic Calendar.

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Knobias Cara100 Tables

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Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
ATVI	27.11	77.55	57.60	51.77
GG	41.31	76.56	62.40	40.29	Sell alert (trig. 8 days ago [on 2008-03-07 at $42.75, -3.37% chg], after a 1 day DZ)
ABX	49.58	76.42	56.11	39.58
TT	45.98	75.51	72.16	66.78	Sell alert (trig. 3 days ago [on 2008-03-14 at $45.46, +1.14% chg], after a 1 day DZ)
ECA	77.14	74.03	77.27	54.83	Sell alert (trig. 2 days ago [on 2008-03-17 at $76.34, +1.05% chg], after a 2 day DZ)
GGB	33.95	73.91	70.26	63.80
WMT	50.98	71.47	66.70	63.85
PDA	50.97	71.45	60.98	57.63
ABV	82.42	70.75	62.50	59.69
NUE	74.45	70.47	79.48	70.60	Distribution Zone (for 1 days)
RIMM	105.00	70.12	55.78	57.47
AMAT	21.53	65.61	81.22	71.95
PG	68.54	57.94	54.12	72.73
JNJ	65.31	56.06	58.03	77.45
GE	36.14	50.79	61.02	75.41
LLTC	30.99	46.93	63.89	73.74
INTC	21.75	46.71	49.51	70.68
BBBY	31.05	41.96	57.08	73.53

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
SBUX	18.24	12.78	37.82	60.50	Buy alert (trig. 6 days ago [on 2008-03-11 at $17.74, +2.82% chg], after a 2 day AZ)
UBS	28.85	14.89	18.76	45.96	Buy alert (trig. 1 days ago [on 2008-03-18 at $28.85, +0.00% chg], after a 2 day AZ)
KB	51.40	17.60	21.56	20.82	Accumulation Zone (for 3 days)
SNDK	22.59	21.69	19.70	49.01	Buy alert (trig. 5 days ago [on 2008-03-12 at $22.52, +0.31% chg], after a 8 day AZ)
BC	16.24	24.44	40.01	57.01
JCP	39.88	25.66	35.89	38.38
INFY	34.47	26.79	28.51	37.48	Buy alert (trig. 1 days ago [on 2008-03-18 at $34.47, +0.00% chg], after a 1 day AZ)
BMY	21.35	26.93	18.91	45.17	Buy alert (trig. 1 days ago [on 2008-03-18 at $21.35, +0.00% chg], after a 2 day AZ)
PAYX	32.07	26.95	31.01	58.44	Buy alert (trig. 6 days ago [on 2008-03-11 at $31.63, +1.39% chg], after a 3 day AZ)
LEH	46.49	27.75	31.41	52.48	Buy alert (trig. 1 days ago [on 2008-03-18 at $46.49, +0.00% chg], after a 2 day AZ)
ADBE	31.88	27.80	22.58	40.43	Buy alert (trig. 1 days ago [on 2008-03-18 at $31.88, +0.00% chg], after a 1 day AZ)
GSK	42.32	27.93	33.00	50.43	Buy alert (trig. 2 days ago [on 2008-03-17 at $41.03, +3.14% chg], after a 1 day AZ)
KSS	42.53	28.62	39.49	48.70	Buy alert (trig. 1 days ago [on 2008-03-18 at $42.53, +0.00% chg], after a 1 day AZ)
WFMI	32.35	28.85	25.10	39.84
GOL	16.45	29.18	25.71	55.55	Buy alert (trig. 1 days ago [on 2008-03-18 at $16.45, +0.00% chg], after a 8 day AZ)
TGP	27.45	30.23	32.83	21.54
AET	42.20	32.21	17.69	22.63
OXPS	20.57	35.38	19.03	40.55
GOOG	439.16	36.23	19.60	45.84
IBN	39.56	38.90	24.23	36.58
IBKR	25.59	41.87	30.64	21.07
PTR	130.48	42.53	29.81	40.98
NTES	18.80	53.38	44.39	27.32

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International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.

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Here is the latest session data for the London stock exchange FTSE.

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Here is the latest session data for the German DAX.

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Here is the latest session data for the French CAC 40.

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Here is the latest session data for the Milan Italy stock exchange MIBTEL.

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Here is the latest session data for the Swiss market index.

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Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

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Here is the latest chart for the Japanese Nikkei 225 index.

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Here is the latest chart for the Singapore index .

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Here is the latest chart for the Shanghai Composite index .

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Here is the latest chart for the Hong Kong Hang Seng index .

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Here is the latest chart for the India BSE 30 index .

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Here is the latest chart for the Australian All Ordinaries index .

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US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table 14: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
JPM	42.66	2.35	5.83%	9.84%	8.85%	-0.40%	1.16%	-2.82%	-10.79%	-9.29%
GE	36.14	1.81	5.27%	8.20%	7.82%	5.43%	-1.69%	-1.79%	-13.29%	5.18%
CAT	76.87	2.41	3.24%	5.87%	7.15%	9.19%	8.83%	8.19%	-0.76%	21.71%
BA	76.53	1.04	1.38%	4.26%	-3.88%	-10.35%	-11.65%	-12.21%	-22.28%	-14.97%
JNJ	64.88	0.84	1.32%	3.91%	3.58%	1.92%	-1.56%	-4.18%	1.65%	7.23%
MMM	80.95	2.44	3.11%	3.85%	3.24%	1.38%	-2.13%	-5.71%	-11.68%	7.53%
HD	27.19	1.49	5.80%	3.78%	1.19%	-0.44%	4.14%	2.72%	-25.22%	-27.51%
BAC	38.93	2.97	8.26%	3.21%	0.39%	-8.76%	-4.02%	-6.19%	-23.98%	-21.54%
PG	68.58	1.53	2.28%	2.88%	3.83%	3.36%	-5.16%	-5.85%	-0.15%	11.31%
INTC	21.75	0.90	4.32%	2.59%	8.75%	7.89%	-14.20%	-16.06%	-14.40%	13.58%
AA	38.60	1.50	4.04%	2.22%	1.58%	6.63%	6.84%	12.21%	4.64%	15.29%
MRK	43.19	1.34	3.20%	2.06%	-1.30%	-8.24%	-24.72%	-27.70%	-14.59%	0.23%
DD	47.47	1.64	3.58%	1.93%	2.24%	2.70%	8.53%	9.94%	-3.71%	-4.98%
XOM	88.34	2.55	2.97%	1.92%	1.90%	1.53%	-5.53%	-3.37%	-3.73%	26.45%
T	36.77	0.98	2.74%	1.88%	5.45%	2.45%	-10.32%	-9.43%	-9.94%	-0.57%
DIS	31.72	1.26	4.14%	1.70%	-0.47%	-1.46%	-0.38%	-3.94%	-8.27%	-5.62%
IBM	118.41	2.86	2.48%	1.65%	2.33%	12.77%	13.11%	11.38%	1.53%	26.98%
WMT	50.98	1.03	2.06%	1.45%	2.23%	2.66%	8.70%	5.68%	14.72%	10.32%
UTX	69.20	1.64	2.43%	1.21%	0.44%	-3.84%	-7.99%	-8.85%	-11.46%	7.12%
MCD	54.85	0.57	1.05%	1.11%	2.27%	-1.47%	-5.59%	-8.32%	-0.31%	26.15%
MSFT	29.42	1.12	3.96%	0.48%	6.63%	4.44%	-16.47%	-15.31%	1.69%	7.65%
VZ	35.29	0.68	1.96%	0.23%	-1.12%	-0.14%	-18.33%	-19.45%	-18.52%	-2.84%
HPQ	47.93	1.51	3.25%	0.02%	-1.07%	9.06%	-3.77%	-6.06%	-4.46%	20.10%
KO	59.41	1.72	2.98%	-0.10%	0.07%	2.25%	-2.75%	-4.52%	5.32%	25.84%
AXP	43.71	2.00	4.80%	-0.27%	2.49%	-1.89%	-14.36%	-15.59%	-28.11%	-21.31%
AIG	43.67	3.87	9.72%	-0.75%	-4.71%	-7.14%	-22.43%	-22.98%	-34.67%	-34.69%
CVX	86.12	1.93	2.29%	-2.31%	-0.70%	1.52%	-7.85%	-5.56%	-7.74%	26.50%
C	20.71	2.09	11.22%	-3.63%	-6.29%	-18.21%	-28.39%	-31.83%	-57.18%	-58.19%
PFE	20.43	-0.15	-0.70%	-5.96%	-8.16%	-8.69%	-10.85%	-12.60%	-16.77%	-18.27%
GM	19.41	1.16	6.36%	-10.84%	-15.86%	-25.35%	-20.48%	-27.92%	-45.74%	-33.46%

You can do this table yourself by entering the following string into the Summaries window at www.billcara2.com and then clicking on the link for Performance.

AA AIG AXP BA C CAT DD DIS GE GM HD HON HPQ IBM INTC JNJ JPM KO MCD MMM MO MRK MSFT PFE PG T UTX VZ WMT XOM

Here are the links to interactive Dow charts from Billcara2.com that I broke into groups of ten, which you can add technical indicators for as well. (list one) (list two) (list three)

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The Americas

Here is the latest session data for the exchanges of the Americas.

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Here is the latest chart for the Brazilian Bovespa stock exchange in Sao Paulo.

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Here is the latest session data for the Toronto Stock Exchange composite index.

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Sector ETF Summary for the US equity market

The tables I show in this section are for ten (GICS) Sector Index Funds (ETF's) only, but they cover the full spectrum of the US equity market.

Table 1: Cara ETF List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
XLI	37.79	1.89