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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (39694)	4/24/1999 4:39:00 PM
From: William H Huebl	Respond to of 94695

Haim, And we all worship those meaningless numbers, don't we??? Bill

To: Haim R. Branisteanu who wrote (39694)	4/30/1999 9:59:00 PM
From: Les H	Read Replies (1) \| Respond to of 94695

Strong GDP Growth Continues Stronger than expected GDP growth and a larger than expected inflation number is driving bond prices lower this morning. Thirty-year bonds are down 30/32, yield 5.59%. Two-year notes are down 4/32, yield 5.02%. First quarter GDP grew 4.5%. Expectations were for a rise of 3.4%. The consumer continues to drive the economy. Consumer spending rose 6.7%, its largest increase in eleven years. Consumer spending accounts for two-thirds of the economy. The implicit price deflator rose a stronger than expected 1.4%. The deflator is the price gauge used in calculating GDP, a rising deflator means more inflation. This is the largest gain in more than two years. The increase is being attributed to government pay raises and lower import prices. Imports subtract from GDP. Stronger imports and lower import prices add to the deflator. The trade deficit widened by $55.6 billion. Trade subtracted 2.4% from GDP. Bonds are lower on the much stronger growth and perceived higher inflation. The Chicago Purchasing Managers Index rose to 63.3 from 57.0, its highest level in four years. A small decline was expected. New orders, production, employment and the inventory components all posted nice increases. Very disappointing was a 4.2 point rise in the prices paid component. This number underscores the rebound in the manufacturing sector. Bonds extended their losses on the data. Japan, the world's second largest economy, continues to show weakness (Japan is now in its 15th month of recession). Japan's unemployment rose to a record 4.8%. The Japan Research Institute expects unemployment to reach double digits in the coming months. Household spending rose much less than expected. The dollar rose against the yen on this news, coupled with the GDP data. The dollar currently sits at 119.68 against the yen, up .5. Monday will bring data on personal income and the National Association of Purchasing Managers index. The Beige Book will be released Wednesday and unemployment on Friday. Have a great weekend. >>>From bonds-online. Looks like 'good' news for everyone. >>>Inflation, lower export demand, recovering Asian economies to >>>export more to US and import less. Hence, for example, lower DRAM >>>prices hurting Micron.