Market Talk Jan. 29 - Feb. 4

[Mike]

Yes, a FALL in GDP.

The US GDP has grown for many quarters now and still continues doing so. That is not a recession.

Edit: look at this article - it illustrates what happened when we dealt with the last recession.

http://money.cnn.com/2001/10/31/economy/economy/

You will note the GDP numbers fractionally higher in one quarter (<1% growth) and then in *negative* territory in the next quarter.

The 4th Quarter of '05 was weak but still over 1% growth.

 

[The_Technician]

Getting

powerful drops registering early on....EAF is really showing a large downstroke early on.....Wilshire is strong too.....Agg is strong down but vol is lighter as was yesterday.....

S&P is taken less of a hit but down itself.....

Dollar now 1.1990 or so....moving stronger fast.....now I noticed it has moved to 1.1960's...thats quick....

 

[Wizard]

2 year 4.61
10 year 4.58

Oh my.

 

[NASAguy]

It will be curious to see how long it holds the higher level. I suspect about a month, maybe six weeks at the most at a stronger level, and then as soon as we really look like we are done rising rates, it will fall.

 

[Wizard]

10:01am 02/03/06 U.S. JAN. ISM SERVICES BELOW CONSENSUS 59.5%

10:01am 02/03/06 U.S. JAN. ISM SERVICES 56.8% VS 61.0% IN DEC.

10:02am 02/03/06 U.S. JAN. ISM SERVICES NEW ORDERS 56.0% VS 62.2% IN DEC.

10:03am 02/03/06 U.S. JAN. ISM SERVICES EMPLOYMENT 51.1% VS 56.9% IN DEC.

 

[NASAguy]

And factory orders up. S&P down 0.65% or so day.

 

[roguewave]

2 year 4.61
10 year 4.58

Oh my.

You have the 2 yr. rate higher then the 3, 5 and 10 yr. rate and not to far off the 30 yr. rate. Another "conundrum". Personally, I'm looking for long term rates, along with, short term rates to continue down to eventually compete with Japanese government bond rates. Interest rates will not get much higher because there is to much debt in the system.

http://finance.yahoo.com/bonds/composite_bond_rates

 

[NASAguy]

Can't lower rates much. Dollar will fall and your gas bill will go to $4.00 a gallon. Regardless of how the Feds manufacture the Official Inflation Rate, that will kill the economy.

Energy is the key word for the next few years. Whoever figures out how to get off oil will make the computer/information boom of the 1990s look like a small little rally.

 

[Wizard]

And factory orders up. S&P down 0.65% or so day.

Factory Orders "beat by a penny" 1.1 vice 1.0

But last report was 3.3.

That darn tricky math again.

Lower the bar low enough and even 1.1 looks good (a 300% decrease).

You spin me round and round. LOL

 

[NASAguy]

My point is they are still increasing, and increasing over projections (even by just a little). As long as we keep increasing production, the economy keeps growing, and wages will have to keep up. That will drive the rate up, that will dampen the market, and so on, and so on, and so on. Something will have to give.

Good time to be on the sidelines.

 

[Fivetears]

Brakes! Brakes!

Wholly Cow! It's gonna be a "White Knuckle" ride down the I-Fund mountain. Who's bailing outta the truck?

 

[Wizard]

My point is they are still increasing, and increasing over projections (even by just a little). As long as we keep increasing production, the economy keeps growing, and wages will have to keep up. That will drive the rate up, that will dampen the market, and so on, and so on, and so on. Something will have to give.

Good time to be on the sidelines.

The round round round thing was not about you. Sorry if you took it that way. I did not direct it at you - but now that I read it that was not what I meant.

My point is if you lower the bar far enough any number looks good - even a 300% decrease in ONE MONTH.

I can still remember when a job report of 500K was considered "bad", as one example.

 

[NASAguy]

I didn't take it that way at all. I agree completely. It is just amazing how people don't "connect the dots". The talking heads on TV always make it sound like the market is the place to be and it will only go up 10% in the next month.

I got burned in 2000/2001 by not listening to my gut and paying attention to idiots. I have spent the last several years getting smarter on the subject, and my somewhat educated gut says the current situation is too risky for any potential gain.

The bad thing about the spin cycle is this: Your head goes 'round and 'round and pretty soon you are dizzy and nearly have a concussion from baning it on the wall. At that point you just agree to anything. Like staying in a risky market. Not me. Not anymore.

 

[Wizard]

2 yr 4.59
10 yr 4.52
30 yr 4.62

The 30 yr auction next week should be a real hoot.

 

[Wizard]

That was an ugly close. The buy on dip packaged people came in at 2pm and got creamed.

Wonder how long they will continue to do that?

 

[Master]

Nice change of Avatar, Wizard! He has a really good TV program for investors.

 

[Wizard]

Nice change of Avatar, Wizard! He has a really good TV program for investors.

Thanks.

He is my favorite fade.

 

[Birchtree]

The Crying Game

What about me - I really mean what about me. Look I was only a millionaire for two days and I should be crying loudly about the give back, but I know the day will come again when the inverted yield curve is ignored and the expansion continues and gains will be made. Time to relax and not cry.

Dennis - permabull #2

 

[Wizard]

Come on "no pain, no gain" guy. Suck it up.

Think about the people that follow your advice.

 

[Wizard]

42,784 Permanent Lay Offs - LAST WEEK.

http://www.jwtec.com/hrlive/layoffs.php