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

To: Haim R. Branisteanu who wrote (52936)	6/2/2000 8:49:00 PM
From: UnBelievable	Read Replies (1) \| Respond to of 99985

Haim, Fleckenstein's comments have now been posted and he raises many of the issues you have concerning the debt market, the dollar and oil. I think the problem is we are trying to rationally understand the irrational.

To: Haim R. Branisteanu who wrote (52936)	6/2/2000 10:42:00 PM
From: Techplayer	Read Replies (1) \| Respond to of 99985

Haim, There was a commentary on the Fed funds futures on CNBC tonight. Since 5/26, the probability of a rate hike this month has gone from 100% on 5/26 to 80% on 5/31 to 40% today. The futures have correctly predicted 31 out of the last 32 actions/nonactions, though this was at the 10 day mark prior to the meeting. It will be interesting to watch that statistic later in the month. Tp also, CHICAGO, June 2 (Reuters) - U.S. stock index futures closed sharply higher Friday on surprisingly soft employment data indicating that a series of six interest rate hikes by the U.S. Federal Reserve since June 1999 may finally be cooling the economy's growth. Futures contracts rallied sharply in an early-trade buying spree, adding to overnight gains fueled by optimism about Friday's data and Thursday's weaker-than-expected Purchasing Managers Index. June Standard & Poor's 500 futures closed up 24.50 points at 1476.00 after jumping 38 points at the open on the employment data. The contract then pared gains slightly before retesting its highs in late trade. Friday's employment report said the U.S. unemployment rate rose to 4.1 percent in May, up from its 30-year low of 3.9 percent in April. Economists polled by Reuters had expected the rate to remain unchanged. The number of Americans on nonfarm U.S. payrolls increased by only 231,000 in May, far less than April's increase of a revised 414,000 jobs. Payroll employment increased solely because of federal hiring for Census 2000, the once-a-decade U.S. population tally. Private payrolls actually fell by 116,000. Economists had predicted payroll employment would grow by 386,000 jobs. Friday's weak monthly employment data persuaded top Wall Street firms to reconsider their rate hike forecasts for the Fed's June 27-28 policymaking meeting. Only four of 27 primary dealers of U.S. government securities polled by Reuters Friday expect the Fed to raise the federal funds rate by 25 basis points. Twenty of 29 primary dealers in a May 12 Reuters poll predicted at least a 25 basis-point hike. Most of the dealers polled Friday said the Fed would resume its inflation-fighting policy in August. Friday's rally may signal a shift in the stock index futures market downtrend, said Terence Gabriel, technical analyst at IDEAglobal.com. Thursday's S&P contract closed on a trendline drawn between the highs of March 24, April 10 and May 16, Gabriel said. "Today, certainly with favorable volume, we blasted above that trend line," he said. "We've now made a higher high--really for the first time in the decline. Usually, that's a signal of a turn in the trend," Gabriel said. Strength in computer-chip and technology stocks boosted the Nasdaq composite Friday, while tech stocks coupled with sharp gains in interest-rate sensitive financial and retail stocks bolstered the Dow Jones Industrial average. June Dow futures jumped 130 points in early trade, pared gains, and then rallied slightly in late trade to close up 102 points at 10,772. Volume was moderate during the first hour and a half of trading, one S&P trader said. "After that, it began to dry up a little bit." Dealer buying was strong until the market topped out around 1485.00 to 1489.00, the trader said. June S&Ps settled up 24.50 points at 1,476.00, Nasdaq 100s were up 239.00 at 3751.50, Dow futures up 102 at 10,772, Russell 2000s up 20.00 at 513.15, Midcap 400s up 11.50 at 503.50 and Nikkeis up 335.0 at 17,225. 408-8750 chicago.derivatives.newsroom@reuters.com)) REUTERS Rtr 17:19 06-02-00