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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (44852)	4/4/2000 10:33:00 AM
From: HairBall	Respond to of 99985

OT I am Ellian Gonzales'd out...<ng> Did the death of President Kennedy get this much coverage? Regards, LG

To: HairBall who wrote (44852)	4/4/2000 10:40:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

LG, yes, i have noticed. i think however that it's all part of the ongoing unwinding of long agencies/corporates positions vs. short treasuries. it's a bit early to draw conclusions from the lessening of the yield curve inversion imo. it's most probably a reaction to the NAPM and CPM reports, after all inflation usually affects the long end more than the short end, so some bond funds may have decided to move some of their exposure to the front end just in case. btw, i am rather taken aback that the stock market seems to find solace in the recent drop in treasury yields...after all corporate bond yields haven't budged throughout the recent drop in treasury yields and in some cases have even begun to creep up, especially the lesser credits. in junk bond land the default rates have shot up markedly...and a closer look at NAPM shows that manufacturing still has a lot of overcapacity. today UIS and NCDI (a maker of thin clients) have both reported extremely weak Q1 sales, indicating that tech spending has NOT picked up post y2k. so we have a situation that fundamentally speaking is far from ideal for stocks: weakening sales, higher input costs (NAPM prices paid at a 12-year high) and higher rates. i conclude therefore that what we are seeing is a hot air balloon, pumped up by the Fed's enormous money printing exercise. once again, i'm at a loss as to WHY they are doing this, as i have no doubt that they are aware what the effects of increasing the money supply at a faster pace than economic growth are. could it be that they are under orders from the administration, to ensure a Gore victory? i'm just speculating...officially they are independent after all. regards, hb