Friday, December 22, 2006
Philly Blues
Poor economic news was all the excuse traders needed to take some profits off the table yesterday. The Dow retraced from record highs and ended the session down 42.62 points to close at 12,421.25. The SPX declined 5.23 points to finish on 1,418.30. Our play is nicely in the green.
Two pieces of Economic news dictated events Wednesday. The final revision to GDP in the third quarter came in below expectations at 2.0 percent. This was below the initial reading of 2.2 percent, raising the issue once again of a hard landing for the economy. The GDP deflator was also above estimates at 1.9 percent. The core GDP remained at 2.2 percent, putting the year on year rate at 2.4 percent. This measure is one the Fed watches closely and they would like to see it below 2.0 percent. Growth in the economy has weakened each quarter this year from 5.6 percent in the first quarter and 2.6 in the second quarter.
Another bearish report came in the form of the Philly Fed Survey, which fell to a negative 4.3. Any reading below zero is considered expansionary and the index fell from 5.1 in November. The only positive in the report was the fact that the prices paid index fell to 20.6 in December from 26.7 in November.
Today's trading will once again be governed by economic news with consumer sentiment, durable goods orders and personal income data being released.
Until next time.
Two pieces of Economic news dictated events Wednesday. The final revision to GDP in the third quarter came in below expectations at 2.0 percent. This was below the initial reading of 2.2 percent, raising the issue once again of a hard landing for the economy. The GDP deflator was also above estimates at 1.9 percent. The core GDP remained at 2.2 percent, putting the year on year rate at 2.4 percent. This measure is one the Fed watches closely and they would like to see it below 2.0 percent. Growth in the economy has weakened each quarter this year from 5.6 percent in the first quarter and 2.6 in the second quarter.
Another bearish report came in the form of the Philly Fed Survey, which fell to a negative 4.3. Any reading below zero is considered expansionary and the index fell from 5.1 in November. The only positive in the report was the fact that the prices paid index fell to 20.6 in December from 26.7 in November.
Today's trading will once again be governed by economic news with consumer sentiment, durable goods orders and personal income data being released.
Until next time.
# posted by Paul @ 4:57 AM 
