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Strategies & Market Trends : Tech Stock Options
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To: Trey McAtee who wrote (55547)10/15/1998 2:26:00 PM
From: Lee  Read Replies (1) of 58727
 
Hi Trey,..Re: .it also makes a rate cut damn near impossible for a fed that is obsessed with inflation.

Good post Trey, but the rally may be also based on a general realization that long term treasuries are not the place to grow wealth. Also, given that the Fed is obsessed with inflation, the PPI report today should cause them to pause and reconsider. Although, AG does watch the price of scrap steel and that is down according to today's PPI. <gg>

stats.bls.gov
PPI - Sept
By contrast, prices for iron and steel scrap fell 9.6 percent in September, after decreasing 7.4 percent in the prior month.

You are correct in that the Fed has been adding liquidity for awhile now. But I don't expect that the dollar will stay low for long in the face of the Japanese printing presses along with their continued reluctance to 'just do it' as far as the banking sector is concerned.

So we are left to wonder if the market is rallying on hopes of further rate cuts or because there is actually no decent alternative for growth funds. Tech earnings will help but we need the financials to provide the base to continue. Here's where it gets confusing, the financials need the spread between short term and long term rates to profit but long rates keep falling due to flight to quality buying. This is a big puzzle and consternation. (to me anyway) <GG>

Regards,

Lee
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