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

To: Giordano Bruno who wrote (15216)	5/27/1999 11:39:00 PM
From: bobby beara	Respond to of 99985

Pucks, another nutz stock I have followed went to the trough only a couple of months after going public and went for a secondary, these pukes are feeding on the public at the top. bb

To: Giordano Bruno who wrote (15216)	5/28/1999 8:18:00 AM
From: Giordano Bruno	Respond to of 99985

Energy price drop may ease pressure on Fed to hike By Richard Leong NEW YORK, May 27 (Reuters) - The Federal Reserve may not have to boost interest rates if energy prices drop during the summer driving season -- which begins this Memorial Day weekend -- after spiking sharply higher in April, economists said. The prices of energy products -- which are a sizable chunk of the Consumer Price Index (CPI) -- rose steeply in April, boosting consumer inflation to its highest increase in nearly a decade. ''Energy costs may be a negative (CPI factor) in a month or two,'' said Avery Shenfeld, senior economist at CIBC World Markets. The April CPI report was arguably the key for the Fed to adopt to a tightening bias on interest rates more than a week ago. The policy directive opened the possibility for the Fed to hike borrowing costs to curb inflation. The Labor Department blamed roughly half of the 0.7 percent jump in April CPI on a record spike in gasoline prices. The unexpectedly strong CPI gain, the largest since October 1990, rattled stock and bond investors by stirring fears the economic expansion may be overheating. U.S. gasoline and crude prices have fallen 10 to 15 percent from highs set earlier this year when prices spiked on West Coast refinery problems and oil exporters' production cuts. May's CPI data is considered critical toward the Fed's decision on whether to hike short-term rates. The figures will be released June 16, just days before the Fed's policymakers hold their Federal Open Market Committee meeting June 29-30. ''That's what the Fed wants to focus on,'' said William Sullivan, Morgan Stanley Dean Witter & Co.'s senior economist. ''The CPI has the most impact on the inflation psychology of the U.S. household.'' Barring sharp price increases in other economic sectors, a drop in energy costs, especially in retail gasoline, will likely make the April CPI a one-time anomaly and allay concerns over inflation, according to economists. Sullivan said signs of crude and wholesale gasoline prices ebbing will likely result in lower gasoline prices at the pump during the summer driving season when annual gasoline demand hits its peak. ''It should be noted that any weakness in retail gasoline prices next month or beyond would be be contra-seasonal and would most likely translate to energy being an especially large drag on both the PPI (Producer Price Index) and CPI reports for June and even July,'' Sullivan said. Half of the 28 economists at major Wall Street houses surveyed by Reuters expect the Fed to raise the overnight bank lending rate, or fed fund rate, by at least 25 basis points before the end of the year. The fed funds rate has held at 4.75 percent since last November. Did the gasoline price drop come in time to prevent a rate hike this summer? Typically, there is a lag when gas station operators will discount pump prices after a drop on the wholesale level. Sullivan said a recent 15 percent drop in wholesale premium gasoline prices appears of ''sufficient magnitude'' to get station operators to lower their pump prices even as the summer driving summer season approaches. Peter Kreztmer, Bank of America's senior economist, said that the price reductions may not show up in the consumer inflation readings as early as this month. ''While retail gasoline prices have begun to flatten out a bit, the May CPI may still reflect residual strength in the gasoline market.'' quotewatch.com