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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (3744)	4/16/2001 1:20:12 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

Friday's release of an 0.2% decline in business inventories significantly heightens odds that first quarter GDP growth will be in the red and therefore unofficially marking what looks more and more like a recession. The consumer is joining the ranks of the dismal earnings and business investment indicators as confidence is off on another downtrend, spending has dried up as shown by back to back declines in ex-auto retail sales and the vast erosion of equity-based wealth provides a weak spending outlook. Strangely, the funds futures market isn't pricing in even a full 50 bp ease at the May 15 FOMC meeting given the improvement in the equity markets. 50 bp seems assured to us as added ease before the meeting might spark some life in to the economy. The May contract puts 84% odds on a 50 bp ease. October funds are priced at 4.19%, again failing to reflect the continued aggressive easing we see as needed.