Thursday, July 3, 2008

Is coal the stock market’s canary? Or are the Stocks a Five-Star, Table Pounding, All-American, Screaming Buy?

From FT Alphaville:

With London equities market wafting in and out of bear market territory on Thursday - a response to the 1.8 per cent drop on the S&P 500 overnight and a 1.46 per cent fall on the Dow - attention turned in the unlikely direction of over-the-counter thermal coal.

After a sharp run up, Wednesday saw a swift correction:


That has triggered heavy selling of big US coal miners, like Alpha Natural resources and Peabody Energy.

While no one has seen such a sudden fall in the price of coal for years, analysts are insisting that this is nothing to worry about....MORE

Which reminds me of Valleywag's commentary on second quarter venture capital:

Not one venture-backed company went public in the second quarter. It's the first time that has happened since 1978, reports the New York Times....MORE

Meanwhile, Notable Calls says:
Several firms are out with defenses on Coal names following yesterday's sell-off:

- Citigroup notes coal has benefited from structural change, with historically isolated/fragmented regional markets linking up and "going global." Mine shortfalls, transport constraints, thin stockpiles, and voracious BRIC-country demand suggest that this process has several years yet to run....MORE including cameos by MS and Deutsche and a buy rec from Notable himself.