2 replies to this topic

[Tor]

look, I am not saying buy now, as I actually think this market is toppy right here, but here is something of interest. How can a bear argue with this precident???? why bother?? I think the same is true for US markets, even though this refers to Euroland. Changes in Fed policy act as an important signalling device: and so does inaction. Clearly signalled periods of inertia have been very +ve: the markets greet an extending Fed pause with growing confidence, not apprehension. The chart below shows how European/UK equities have performed in the 10-months since the Fed went on hold & how they have performed in previous periods of extended pause. 2002 aside, each period has seen rising markets. The Fed are due to meet next Tuesday but recent data-flow is coralling them into inaction, next week & into the future. The futures curve is re-thinking the likelihood of a cut. Today's non-farm pay-rolls could be a test of this. The combined employment components of this week's ISM surveys no longer signal a deteriorating employment outlook: indeed they, our monetary conditions indicator & Economic Surprise Indicator all point to a stabilisation. Balanced against this, inflation expectations have been falling & this week's productivity data suggest a moderation in labour costs, which could also help relieve some inflation concerns. The mixed message of a bias to tighten & an expectation that the next move from the Fed will be down may thus be resolved by a continuing period of the Fed doing absolutely nothing! That's why this month's non-farm pay-rolls are once again so keenly awaited. Conclusion: the longer the Fed is on hold, the more reassured is the market. Doing nothing translates into nothing is wrong & everything is OK. That's been the market reaction since the Fed went on hold last summer & history suggests that this could continue to be the case for European & UK markets. Extended periods of Fed pause are +ve for sentiment ... roll on 13.30!

[Mr Dev]

Toro
Its not just you,..but a few a people in general keep addressing "the bears" out there,.. over,..

... and over,.. and over again in their post.

Where?

I don't really see any bears at this board anymore,...just traders willing to play it both ways to double income.

It may be time to give it rest... or not !

Remember Zen?

[Rogerdodger]

Mr Dev. Friday am 48% here were bears, 31% were bulls. 42% were short, 32% were long. Check the archives. You can't hear them now because of the bandages.

Edited by Rogerdodger, 04 May 2007 - 10:55 PM.