Here’s The Big Question…

  • February 4, 2003
  • Peter Navarro

Market Trend: Down

Market Outlook: Bearish

Sector Watch: Long Cash, Short QQQ

David’s Pick: Carla Fiorina without heels
(short)

Peter’s Picks:  The Barf Boat in Dry Dock

Media Watch: Fuzzy Thinking in the Oil
Patch


The Broad Market Outlook:
Rear View
Mirrors Vs. Crystal Balls

In their rear
view mirrors, Wall Street’s Consensus Unconscious sees a stock market that
surely can’t go down four years in a row and a nice bull market just around the
Iraqi corner. Maybe. But our cheap crystal ball still sees a weak consumer out
of re-fi money, business executives lowering their 2003 outlooks almost as fast
as their CapEx expenditures, a President pushing a stimulus package that won’t,
a Federal Reserve holding a pair of nowhere-left-much-to-cut deuces, and a
dollar circling around the global drain. Our bias is net short — hedged for any
possible rocket ship rally if Osama gets caught or Saddam takes a powder.  


Here’s the scorecard:


The Week’s Macro Data Market Movers:
Triple Ditch

The Macroeconomic Calendar


DAY


EVENT

Monday

  • Columbia Tragedy


  • ISM Manufacturing Index

  • Construction Spending


Tuesday

  • Factory orders


Wednesday


  • Colin Powell at the U.N.


Thursday


  • Productivity


Friday


  • Jobs Report

* Potential
major market movers in red

While the Challenger explosion on January 28, 1986 had no
impact at all on the stock market, this latest event comes piled atop a rash of
bearish sentiment and may well have a sustained dampening effect. At a minimum,
Boeing and others in the shuttle matrix should suffer as, at least for now, the
shuttle is grounded.

On the data
front, the national ISM index will have yet another chance to prove
that the Chicago PMI, which helped buoy the markets on Friday, is a lousy
bellwether.  If, in fact, the ISM does disappoint, this will likely put further
downward pressure on the market.

The risk for
both the productivity numbers and jobs report is to the downside. That is, any
good news will have much less of an impact on the market than bad news. 

Finally, expect a very
hawkish Colin Powell at the UN armed with some new revelations about Iraq. The big question will be just how hard the evidence will
be. By
Wednesday’s end, the likelihood of war will have likely risen substantially. For those in the “let’s get it over soon” camp, that will be very good news
indeed — if not, perhaps, for the market.

If you have a favorite macroplay or stock
you would like us to consider in this column, send an e-mail to

peter@peternavarro.com or go directly to

https://www.peternavarro.com.  We’d love to hear from you.   

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