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.

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

To: John Pitera who wrote (5814)	3/11/2002 12:19:54 AM
From: John Pitera	Respond to of 33421

the Dec FED FUNDS FUTURES are pricing in 125 basis points of FED FUNDS increase by Dec!!! ...... 10:28 ET 10-year: -11/32..5.272%....GNMAs: -6/32....$-¥: 128.17 The funds futures market is still reacting to the strong employment report as some attempt to write off the upturn. The contract pricing puts the probability for a 25 bp tightening at the May 7 FOMC meeting at 72% as a June tightening is fully priced in. In fact, the July contract puts 86% probability for a 50 bp rise in the policy rate by the June 25-26 meeting. The August contract prices federal funds at 2.4% as December prices a 3% policy rate. We see strong odds that the policy risk statement (bias) turns neutral at the March 19 meeting to leave the door open for a tightening at the May meeting. Early tightening moves will be rationalized by the aggressive added ease forced by the 9/11 terror and the need to reduce the massive accommodation of the 40 year low in policy rates. Very strong payroll report after the pace of the last year and the payroll declines over the last six months. The stronger than expected 66K rise in Feb payrolls came with a downward revision to Jan to -126K. The 50K decline in manufacturing is half the size of Jan as service producing payrolls rose 97K. Government accounted for only 20K of the service increase as retail payrolls jumped 58K. .........-------- 11:16 ET 10-year: -12/32..5.275%....GNMAs: -6/32....$-¥: 128.11 Prepare for more bond bearish economic news next week. The strong pace of ex-auto retail sales adds to the stunning rise in autos as the Q4 auto sales boom has yet to see any significant offset. We expect retail sales to rise in excess of 1% as the consumer continues to drive the turn into expansion. Industrial production is expected to show a rise in Feb after 15 declines over the prior 16 months and help to signal the end of an extremely deep manufacturing recession. The Univ of Michigan's releases the preliminary read on March consumer sentiment which threatens a strong rise given the recent lift in the economy and equity prices.