Friday, January 18, 2008
Pay Day!!
Stocks take another pounding Thursday on yet more concerns economic weakness. The Dow fell a whopping 306.95 points to close at 12,159.21. The SPX gave up a massive 39.95 points, closing at 1,333.25. We are in the green and have won this trade.
The economy continued to be the focus Thursday with several key reports and a speech by Fed Chairman Bernanke. Housing starts were a huge disappointment, falling 14.2 percent to an annualized rate of 1.006 million units. Not only was this well below expectations, but building permits, a leading indicator for future housing starts, fell 8.1 percent.
In other economic news, the Philly Fed survey plummeted in January to a level of minus 20.9. A minus number means contraction in output which is obviously not good.
If that was not enough excitement the Fed Chairman Bernanke stated that the outlook for economic growth has been "tempered". Though he didn’t specifically suggest government economic stimulus, he noted that if Congress intends on acting they need to do so quickly so that the effects are felt within the next 12 months. Bernanke did note that he is concerned about inflation pressures, but feels that food and energy prices will ease going forward. Taking this all in seems to point to aggressive rate cuts by the Fed, possibly even an emergency cut before the Jan. 29/30Fed meeting.
The SPX is at a 10 month low. I wouldn't be surprised if the bulls step back in for a bit on the hope the Fed will do it all can to stave off resecesion. A 1% rate cut anybody!
Don't spend all your profits at once.
Until next time.
The economy continued to be the focus Thursday with several key reports and a speech by Fed Chairman Bernanke. Housing starts were a huge disappointment, falling 14.2 percent to an annualized rate of 1.006 million units. Not only was this well below expectations, but building permits, a leading indicator for future housing starts, fell 8.1 percent.
In other economic news, the Philly Fed survey plummeted in January to a level of minus 20.9. A minus number means contraction in output which is obviously not good.
If that was not enough excitement the Fed Chairman Bernanke stated that the outlook for economic growth has been "tempered". Though he didn’t specifically suggest government economic stimulus, he noted that if Congress intends on acting they need to do so quickly so that the effects are felt within the next 12 months. Bernanke did note that he is concerned about inflation pressures, but feels that food and energy prices will ease going forward. Taking this all in seems to point to aggressive rate cuts by the Fed, possibly even an emergency cut before the Jan. 29/30Fed meeting.
The SPX is at a 10 month low. I wouldn't be surprised if the bulls step back in for a bit on the hope the Fed will do it all can to stave off resecesion. A 1% rate cut anybody!
Don't spend all your profits at once.
Until next time.
# posted by Paul @ 5:10 AM 
