- The Fed is probably the most important thing right now. They have a history of going too far and the decisions they make over the next couple of meetings will make or break whether they do go too far.
- Earnings season is about to start and as I said on the show before the last earnings season I think earnings will come in just fine but they will not be the key driver short term for index levels.
- I think a secondary effect in the US markets this week (and probably next week too) will be rejiggering of portfolios for quarter end and so any trades done for that purpose may be unwound after the holiday.
- If I was not clear, the Fed will announce 25 basis points on Thursday. As I say every appearance that I make around Fed day that while I don't know how they will word the announcement the board will figure a way to have as little impact on capital markets as possible.
- I give much less weight to a great consumer confidence number than to the various production and capacity data points, GDP, LEI, the slope of the yield curve and jobs numbers. I would add though that despite the GDP print on Wednesday it is not moving the market underscoring my first point, the importance of the Fed.
- Energy will continue to be a big focus. The consensus that oil will find a home below $50, I believe, is incorrect. It could go there on a trade of course but we are seeing a change in the dynamics of the demand side of the equation from China and India (soon we will include Viet Nam and Pakistan in this discussion). This will continue to put upward pressure on the price.
- I continue to favor energy, utilities, certain areas of healthcare and foreign equities.
Wednesday, June 29, 2005
I am scheduled to appear in my usual slot during the first half hour on Asian Market Watch. I received an email from my point of contact asking me for my latest newsletter as a prep for the interview. Since I don't have a strict content format I will just write a quick post with some bullet points and email the post to the network.
Posted by Roger Nusbaum at 8:18 AM