Market Soapbox and FOMC 03/21/07
WEN, spring sprung with a rocket ride, DJIA +159 on below average volume with sterling internals.
All UP. Bonds up 10yr yield -1 bps 4.54, $ up vs 117.555y & down vs 1.3381E, WTI crude up $59.61, gold up $663.70
Yesterday: "IF FOMC statement is benign, SP500 heads for 1420-1427 and NDX could make 1782 on exhuberance."
FOMC JAN: "1. Recent indicators have suggested somewhat firmer economic growth...
2. and some tentative signs of stabilization have appeared in the housing market....
3. Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time. "
This month: "1. Recent indicators have been mixed...
2. and the adjustment in the housing sector is ongoing...
3. Recent readings on core inflation have been somewhat elevated ... and the high level of resource utilization has the potential to sustain those pressures."
Benign?? Anything but, on all three counts the Fed acknowledged a WORSENING of the situation.
To review: We went from FIRMER to MIXED, STABLIZATION to ONGOING (DOWNWARD)ADJUSTMENT, and IMPROVED MODESTLY to SOMEWHAT ELEVATED, with a chance to SUSTAIN PRESSURE.
The markets reaction? I got three words W.T.F.??
DJIA up 194 intraday, SP500 hit 1437, NDX 1804 on below average volume with little volatility. i.e. VIX has sunk from mid 21 to 11.3 in one week.
Questions you have to ask yourself: is this an oversold bounce? or is this Twin Peaks? has everyone forgotten all the bad micro and macro news?
(inverted yield curve, Hang Seng -9% single day correction, BOJ raise, carry trade unwind, subprime crash, collapsing housing sector, SP500 -50 points 02/27)...
Or does Johnny Q. just not know how to read anymore?? In this wild and wacky market, maybe we go back to fill in the NDX 1808 - 1820 gap created 02/27? And then?
All UP. Bonds up 10yr yield -1 bps 4.54, $ up vs 117.555y & down vs 1.3381E, WTI crude up $59.61, gold up $663.70
Yesterday: "IF FOMC statement is benign, SP500 heads for 1420-1427 and NDX could make 1782 on exhuberance."
FOMC JAN: "1. Recent indicators have suggested somewhat firmer economic growth...
2. and some tentative signs of stabilization have appeared in the housing market....
3. Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time. "
This month: "1. Recent indicators have been mixed...
2. and the adjustment in the housing sector is ongoing...
3. Recent readings on core inflation have been somewhat elevated ... and the high level of resource utilization has the potential to sustain those pressures."
Benign?? Anything but, on all three counts the Fed acknowledged a WORSENING of the situation.
To review: We went from FIRMER to MIXED, STABLIZATION to ONGOING (DOWNWARD)ADJUSTMENT, and IMPROVED MODESTLY to SOMEWHAT ELEVATED, with a chance to SUSTAIN PRESSURE.
The markets reaction? I got three words W.T.F.??
DJIA up 194 intraday, SP500 hit 1437, NDX 1804 on below average volume with little volatility. i.e. VIX has sunk from mid 21 to 11.3 in one week.
Questions you have to ask yourself: is this an oversold bounce? or is this Twin Peaks? has everyone forgotten all the bad micro and macro news?
(inverted yield curve, Hang Seng -9% single day correction, BOJ raise, carry trade unwind, subprime crash, collapsing housing sector, SP500 -50 points 02/27)...
Or does Johnny Q. just not know how to read anymore?? In this wild and wacky market, maybe we go back to fill in the NDX 1808 - 1820 gap created 02/27? And then?
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