Prudent Bear Market Commentary
prudentbear.com
<< Next week will provide a good indication of the economy's underlying health with the release of existing home sales, a retail sales report, consumer confidence, durable goods orders, third quarter GDP, the Chicago Purchasing Managers report and new home sales. We would expect next week's data to provide evidence of a sharp slowdown in economic growth. Next week we also will be following closely the performance of the dollar and the bond market. The dollar has yet been unable to rally much from its recent collapse and weak economic news will not help. Also, trading in the bond market will be worth watching after it quietly performed poorly this week. In fact, the bond and credit markets have not performed impressively since the Fed's rate cuts. Interestingly, when the Fed first cut rates on September 29th, the 30-year bond yield was a 5.1%. After the second cut on October 15th, the yield dipped to 4.97%. Today, however, the yield has risen to 5.17%. If longer-term rates continue to rise, especially in the face of weaker economic data, investors should take notice. This could be an important signal that the Federal Reserve does not dictate interest rates quite as well as presumed. It will be an interesting week, one we expect will be much more "back to reality" after two wild weeks of a bear market rally. >>
Hi russell,
Stacked another cord in the wood shed yesterday to supplement my electric baseboard heat on the really cold nights ... man, that's hard work. Standby generator fueled and ready. Bring on the snow and ice!
With my track record, it will probably be the mildest winter in recorded history.
< g >
John
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