Dave: Agreed. KM caught my eye in his first note when he called 2680 strong support -- I now see his response to my post when he, too, clarifies that he meant support for a trading bounce. That makes sense to me. But you're right to keep me honest on time frames, because I usually think intermediate-term (week to week, month to month) instead of short-term (day to day).
I personally didn't take today's news as positive for the market, although you're right that the market has calmed considerably after the morning dip. I don't get any impression that Gore will concede until after all the judicial actions are complete. I think he was simply offering a sober (if overly optimistic: his chances are probably more like 10 percent, tops) appraisal of his chances, given how difficult it would be for the courts to overturn the Secretary of State. The market should remain focused on December 12 -- later if Gore does pull ahead of Bush somehow, because that will draw additional legal action from the Bush team and could also draw the Florida and U.S. legislatures into the fray.
As I mentioned earlier, I think the GDP number is bad news, ultimately. It's slowing enough to hurt profits -- indeed, the GDP breakdown shows extremely weak profit growth -- but probably not enough to draw the Fed into action. The market is really expecting the Fed to step in sooner rather than later (look at the strength in the financials today: AXP, C, NTRS), but I'm not at all convinced this will be the case. Last night, the Fed seemed to give very clear signals that it will remain vigilant. I'd like to see the market reset expectations to account for an unfriendly Fed so that anything positive from it would come as an upside surprise. |
