Wednesday, February 06, 2008
After a Brief Rise....the Losses Continue
The losses seen Monday continued Tuesday, erasing the gains seen last week on the back of the two interest rate cuts. Tuesday was a bad day. The Dow fell 370.03 points to close at 12,265.13. The SPX lost 44.18 points, closing at 1,336.64. We still have no play on.
We tried to get filled Monday but didn't. Which was a real shame given what happend Tuesday as our play would be looking very good today!!
The markets fell because of bad economic data. The services sector of the economy showed a sharp decline in January as measured by the ISM Non-Mfg. Survey. This index measures business activity with a reading below 50 a sign of contraction.
Expectations were for a reading of 53.0, but the actual result was much lower at 41.9!! This was the first time the ISM Non-Mfg. Survey also provided a composite index, which was also disappointing at 44.6. The employment component was very weak, confirming the decline in nonfarm payrolls data released last week.
Richmond Fed President Jeffrey Lacker spoke Tuesday and he actually acknowledged that the US economy could be entering a recession. As a result, we could see further rate cuts by the Fed, although upcoming economic data will be the deciding factor in what the Fed does. Of course, the fact that the Fed has cut rates by 1.25 points to 3.0 percent should start to filter into the economy in the months to come.
We are still looking to get a play on and we are hopeful for today.
Until next time.
We tried to get filled Monday but didn't. Which was a real shame given what happend Tuesday as our play would be looking very good today!!
The markets fell because of bad economic data. The services sector of the economy showed a sharp decline in January as measured by the ISM Non-Mfg. Survey. This index measures business activity with a reading below 50 a sign of contraction.
Expectations were for a reading of 53.0, but the actual result was much lower at 41.9!! This was the first time the ISM Non-Mfg. Survey also provided a composite index, which was also disappointing at 44.6. The employment component was very weak, confirming the decline in nonfarm payrolls data released last week.
Richmond Fed President Jeffrey Lacker spoke Tuesday and he actually acknowledged that the US economy could be entering a recession. As a result, we could see further rate cuts by the Fed, although upcoming economic data will be the deciding factor in what the Fed does. Of course, the fact that the Fed has cut rates by 1.25 points to 3.0 percent should start to filter into the economy in the months to come.
We are still looking to get a play on and we are hopeful for today.
Until next time.
# posted by Paul @ 5:11 AM 
