Coming soon! A shakeout — then a strong move
To say that market participants are a bit confused right now is an
understatement. On the negative side, the market is dealing with high oil, high
natural gas, slowing consumer spending, economic disruption from Hurricane
Katrina, potential negative earnings pre-announcements, a flattening yield
curve, rising gold prices, low cash levels at mutual funds, the loss of the
‘Greenspan Put’, and a host of other issues.
On the positive side, the money being sent to the South could create an economic
boom, inflationary wage pressures will lessen as Hurricane evacuees scatter
through the country to fill jobs, the Fed could be done with rate increases, the
leading economic indicators continue to point higher, merger activity continues
unabated, private equity funds are very active and flush with cash, corporate
earnings remain healthy, and trader’s frustration is rising even though the
indexes remain near multi-year highs.
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