Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (14298)	6/8/2000 8:17:00 AM
From: Allan Harris	Read Replies (1) \| Respond to of 15132

I thought that was you, Justa, hangin' out on the Porch and I would have come up to you but you appeared to be a little apprehensive about all the weird characters milling around and besides, I wasn't wearing any pants. In any case, I find it down right fascinating how in the recent go go days of the Bull, how anyone who could get an audience of any kind was an instant expert on bull markets and investing and now in light of a quick and dirty Wave C down (and they usually are quick and dirty) the pontificators are still standing but have morphed into bear market experts. As for the next few weeks, I like the way the market is reacting (or not reacting) to the MSFT news and as you and Voltaire have said many times, it's not the news but how the market reacts to news that's important. A

To: Justa Werkenstiff who wrote (14298)	6/8/2000 8:41:00 AM
From: Wally Mastroly	Read Replies (2) \| Respond to of 15132

Consumer spending is slowing - perhaps...; + Fed Watch link: By Michael J. Bazdarich, CBS MarketWatch Last Update: 12:02 PM ET Jun 5, 2000 LOS ANGELES (CBS.MW) -- As softer economic data poured in last week, analysts who had been blithely touting indefatigable economic strength were suddenly falling over each other to proclaim slower growth. For the last few months, I have been saying here that slower growth was imminent. As you might guess, I have my own take on the recent data. I think the most impressive news of the last two weeks was that on consumer spending, released May 26. It showed very sharp downward revisions of spending and further sluggish spending growth in April. The data now indicate a sharp deceleration in consumer goods spending in place through the last four months. From September through December 1999, consumption of goods excluding motor vehicles rose at a blistering 14.6 percent pace. Since December, this aggregate has grown at only a 3.2 percent rate. Meanwhile, consumer spending on motor vehicles dropped at a ?25.4 percent annual rate between February and April 2000, after having jumped at a 44.6 percent pace between October 1999 and February. (And carmakers have already announced further sales declines in May.) Vehicles data are extremely volatile from month to month, which is why I focused on non-vehicle spending. However, the recent data indicate sharp decelerations in both aspects of goods consumption. If consumption slowed starting in January, why didn?t this show up in first quarter GDP statistics? Because there is a built-in lag in the GDP data. On September-December and December-March bases, consumer goods spending (excluding motor vehicles) rose at 14.6 percent and 3.4 percent rates in the fourth quarter of 1999 and first quarter 2000, respectively. However, on a quarterly average basis, this very same series shows fourth quarter and first quarter growth of 9.5 percent and 8.5 percent, respectively. So the statistical vagaries kept first quarter GDP growth rapid. However, the full force of the 2000 deceleration in consumer spending will show up in the second quarter data. Look for second quarter GDP growth to be well south of 2 percent, in contrast to market expectations of 4 percent-plus growth made only days ago. Now, there is a possible catch to the consumption data. As I argued at the time, the fourth quarter 1999 consumer spending binge was partly due to pre-Y2K spending, as well as to the wealth effects of the late-1999 stock market surge. See previous column After such extremely rapid growth, it was inevitable that some slowdown would occur, if only to let consumers catch their breath. Recent slowing will continue I think the recent slowing will continue, as restrictive Fed policy, slower income growth and a more earthbound stock market impede spending. Others might still argue that the early-2000 consumer spending slowing is only a lull. Either view is compatible with available data (though I believe my view is more compatible with economic realities). In either case, what has changed dramatically of late is that slower spending growth is now a four-month-long reality in the data, rather than the 'forecast' it was just a month ago. In a recent column, I emphasized that it was manufacturing which powered the economy through the last nine months, and it was consumer spending on goods (manufactured goods, as opposed to services) which drove this factory boom. See the column. This take emphasizes the importance of the recent goods spending slowing. That same column also argued that the early-2000 spurt in construction activity was a 'seasonal' spike which would be reversed in Spring. That reversal has also shown up in the data of the last few days. The column also argued that a Fed tightening in June would be its last, and that is looking like a much better bet now than was the case six weeks ago. - Fed Watch link - from bloomberg.com: bloomberg.com