Much of the drop in the markets has been fueled by corporate scandals and the reluctance of the small investor to feel positive and for that is just sitting on the sidelines..
This market is basically drive by shorty and this largely stemmed from the exodus from mutual funds where fund managers had to sell solid corporate blue chips to make up the difference..
The drop within the last couple of weeks was the unrest of the potential war with Iraq and what that would do for oil prices,which we all know is the hallmark of western civilization's stability for a strength/weakness..
The economy is in all practical sense still sound and although some weakness has occurred in consumer spending,I continue to believe that this latest report is the factor of low home interest rates and the reshuffle of homeowners in their refinancing and this has pretty much spent the equity they had in their homes...
Unemployment is stable and the last couple of weeks has shown that corporate layoffs has slowed down,but the rehiring will present the current unemployment figures to loom on..
One area of real concern is the credit debt and Americans are in hock to these plastic enticements at an alarming rate that some may see a bubble with a bumble bee circling for the right time to puncher..
The other area,but not so evident,thanks to interest rates is the potential bust in the real estate markets..Because of the low interest rates,the buying of new homes has sky rocketed beyond the value of these said homes which commanded a bidding frenzy among interested parties.This is largely due to the lack of new homes being built and the shrinking of lands available for development and many local ordinances of "smart growth areas" that prevents the development of what is left of the family farms..
Ok,have we bottomed out? Yes....But,only if we don't go into Iraq and the Middle East isn't brought into a quagmire..The markets has already factor the potential of war with Iraq in,but not the realism or actual attack....This could have a real impact on the markets with a devastating result..
The rebound in the markets is now based on solid E/R nothing more and nothing less,it is this that will drive the stock market for the next 3-5 years.
Have a good day
ET
This market is basically drive by shorty and this largely stemmed from the exodus from mutual funds where fund managers had to sell solid corporate blue chips to make up the difference..
The drop within the last couple of weeks was the unrest of the potential war with Iraq and what that would do for oil prices,which we all know is the hallmark of western civilization's stability for a strength/weakness..
The economy is in all practical sense still sound and although some weakness has occurred in consumer spending,I continue to believe that this latest report is the factor of low home interest rates and the reshuffle of homeowners in their refinancing and this has pretty much spent the equity they had in their homes...
Unemployment is stable and the last couple of weeks has shown that corporate layoffs has slowed down,but the rehiring will present the current unemployment figures to loom on..
One area of real concern is the credit debt and Americans are in hock to these plastic enticements at an alarming rate that some may see a bubble with a bumble bee circling for the right time to puncher..
The other area,but not so evident,thanks to interest rates is the potential bust in the real estate markets..Because of the low interest rates,the buying of new homes has sky rocketed beyond the value of these said homes which commanded a bidding frenzy among interested parties.This is largely due to the lack of new homes being built and the shrinking of lands available for development and many local ordinances of "smart growth areas" that prevents the development of what is left of the family farms..
Ok,have we bottomed out? Yes....But,only if we don't go into Iraq and the Middle East isn't brought into a quagmire..The markets has already factor the potential of war with Iraq in,but not the realism or actual attack....This could have a real impact on the markets with a devastating result..
The rebound in the markets is now based on solid E/R nothing more and nothing less,it is this that will drive the stock market for the next 3-5 years.
Have a good day
ET
