I think Nitro is on the right track here. Besides, we all know that this is a PERFORMANCE game and most money-managers and hedge-fund guys are once again UNDERPERFORMING in the worst way. With 2 months left to go, I just can't see anything more than shallow sell-offs due to many of these fund managers trying to show lower cash positions by the end of the year. A very light IPO and secondary calendar, combined with more cash in the pockets of these fund managers due to the recent spate of M&A activity argues for the Supply/Demand equation to stay pretty firm, atleast into the end of the year. Seasonally speaking, NOVEMBER is very very STRONG!
With this economic news I think Bush has got a lock on 2004 and possibly even 2008 (if they change the Constitution). Beyond that, my crystal ball is a bit foggy.
The markets are talking, you should listen! Quit tring to figure out what is going to happen next. All that matters is what is happening right now! Don't set yourself up for PAIN!!!!!!!!!!
Where are the Fed fund futures trading? Rate increase by May? 50 basis points? Too bad this wasn't released last week to see how Greenspan would comment on it. Aberration or start of real improvement in the economy?
There will be a crash in the next 6 months..... 20 to 40% correction...As soon as the market wakes and says there is no FED or Govt tricks install for 2004. Jan to Mar 2004... Why : I have just read my tea leaves...
Nitro and Limitdown have a valid point. There are a lot of questions on the sustainablitly of this GDP growth. We grew 7.1 but did not add jobs. The job market is only looking to stablize. (and what will the revised GDP show) The pundits say that the job market is lagging but that is ok. BUT FOR HOW LONG? And what happens if we dont grow 7.1 or more next quarter, do we see layoffs? Also, nitro pointed out the exports, as the dollar is cheap. How long will the dollar be able to stay low, before the risk of Deflation truly enters the picture. Also...look at the key big caps in the market, they are not moving much. However, short term...it looks to be all technical. It will be hard to fight the moves up.....but, with all that Nitro and Limitdown talked about.....a trend reversal could come at anytime.... As far as a crash....I have no idea.
Our business continues to show a modest uptick and we are seeing some hiring here in California and on hte west coast. While I generally agree with Nitro on the market behaviour around this GDP number, I dont agree that we will see bigger problems during calendar Q1 and Q2 2004. This disagreement is just based upon what we see in our businesses and in comparison to the last two prior recessions. In addition to all the other variables we have a very positive interest rate situation - although currency issues somewhat offset this. I also think that a lot of the excess capacity across a variaety of industries has been eliminated - although we have a bit more to go. I expect that capacity utilizations will tick up over the next six to eight months and hiring will grow very slightly. Barring any unpredictable events I just see a slower than normal growth of jobs due to excess capacity issues which are working themselves out ......