Market Talk / April 22nd - 28th

**weatherweenie** · 04-27-2007, 12:54 PM

08:33 am : S&P futures vs fair value: -5.2. Nasdaq futures vs fair value: -5.0. An advance read on GDP just showed that the U.S. economy grew at a weaker than expected 1.3% pace in Q1 (consensus 1.8%). The chain deflator -- a key inflation measure -- ticked higher to 4.0% (consensus 3.2%), the most in 16 years. The Employment Cost Index checked in at 0.8%, close to the expected rise of 0.9%. The response in stocks so far has been negative, setting the stage for an even lower start for the cash market. Bonds, though, have strengthened on the news; the 10-yr note is now up 9 ticks to yield 4.66%.

**Birchtree** · 04-27-2007, 12:57 PM

IMHO the market may be decoupling from the economy for awhile and looking over the valley to the second half. The Dow futures are negative on the opening so panic sellers save yourselves while you can. Cap ex does seem to be ramping up though as a silver lining.

**qibovin** · 04-27-2007, 02:23 PM

Originally Posted by Show-me

...the gov. did not spend enough of your money ...

Part of that is because Congress won't pass an acceptable budget bill.

**qibovin** · 04-27-2007, 03:32 PM

Originally Posted by Show-me

Stagflation!

GDP 1.3% and consumption slowing.

Does ONE report constitute stagflation?!
This is NOT the '70s.

Besides, I'm not sure this was "news" to the market. Don't you think a lot of this was already factored in. Maybe this has actually been why the market hasn't blasted off yet. Getting all these skeletons out (relatively painlessly ths far) may be all it needs to "lighten the load" and take off. Who says we need a 10% correction? Such "over reactions" might be a thing of the past. In today's "information age," the feedback mechanisms that guide the market have been fine tuned. Tom has talked about how "volatile" the market used to be, but he also seems to yearn for a return to that volatility--a day trader's dream. We may never return to that type of erratic market. Such volatility seems to be overcorrection based on feedback mechanisms. Now, instead of monthly, weekly, daily volatility, we get drastis inTRAday volatility which we cannot capitalize on with our once a day IFTs.

Hmm, I better stop thinking out loud before I talk myself into a buy-and-hold strategy...

**350zCommTech** · 04-27-2007, 03:48 PM

Originally Posted by qibovin

Does ONE report constitute stagflation?!
This is NOT the '70s.

Besides, I'm not sure this was "news" to the market. Don't you think a lot of this was already factored in. Maybe this has actually been why the market hasn't blasted off yet. Getting all these skeletons out (relatively painlessly ths far) may be all it needs to "lighten the load" and take off. Who says we need a 10% correction? Such "over reactions" might be a thing of the past. In today's "information age," the feedback mechanisms that guide the market have been fine tuned. Tom has talked about how "volatile" the market used to be, but he also seems to yearn for a return to that volatility--a day trader's dream. We may never return to that type of erratic market. Such volatility seems to be overcorrection based on feedback mechanisms. Now, instead of monthly, weekly, daily volatility, we get drastis inTRAday volatility which we cannot capitalize on with our once a day IFTs.

Hmm, I better stop thinking out loud before I talk myself into a buy-and-hold strategy...

This was not the first report to signal stagflation. Read Oldcoin's economy thread.