Horrible recession: Why are steel stocks breaking out?

Discussion in 'Trading' started by makloda, Apr 4, 2008.

  1. Excellent Commentary...........

    There is a big fleet change coming for more efficient vehicles....
     
    #21     Apr 16, 2008
  2. dman666

    dman666


    The equity market NEVER has it wrong, it's only YOU that has it either right or wrong.
     
    #22     Apr 16, 2008
  3. If the equity markets and the bond markets are telling different stories then one will likely end up having it wrong.
     
    #23     Apr 16, 2008
  4. I agree
     
    #24     Apr 16, 2008
  5. Consensus seems to indicate this is an "asset recession" as opposed to an "industrial recession". Industrial meaning of the usual variety as in the past in terms of slowing economic output/contraction in employment, etc. Again, this "recession" seems more of a financial/asset class recession. Of course it can grow into other areas but so far the Fed is trying not to let it expand. We'll see.
     
    #25     Apr 16, 2008
  6. lol...the "market" is wrong pretty often.
     
    #26     Apr 16, 2008
  7. Agree. With still so many strong sectors and stocks this is hardly recessison at all.
     
    #27     Apr 16, 2008
  8. Cutten

    Cutten

    Why can't both be right at the same time? It's pretty easy to imagine a situation where the steel industry booms based on BRIC demand whilst the US economy is in recession due to the deflation of a real estate and credit bubble. The latter would be disinflationary and good for bonds, although it has already been priced in to a large extent.
     
    #28     Apr 16, 2008
  9. Cutten

    Cutten

    How are they telling different stories? Equities are down significantly in the last 6-9 months, bonds are up significantly. Both say that the economy is in trouble.

    If the S&P was breaking to new highs whilst bonds soared and yields went to 3% on the 10 year, then you would have a point. But that's not what's happening.
     
    #29     Apr 16, 2008
  10. I was specifically speaking about cyclical stocks. There is not doubt financial stocks have been ripped to shreds. The bond market has and still does price in anemic real growth over the next 10 years (right now ~1.6% annualized). This doesn't fit with cyclical stocks hitting new highs like clockwork.
     
    #30     Apr 16, 2008