Here’s The Key Question:

  • July 6, 2004
  • Peter Navarro

Navarro’s Broad Market Outlook: Reality Check

Between the beginning of the
October rally in 2002 and its end (or pause) in January 2004, the stock market
priced in a rosy “perfection” economic scenario of 4-plus percent annual GDP
growth with full employment and moderate inflation.  The gut check that has been
going on since mid-January involves a reassessment of those three parameters. 
The latest GDP revision for Q1 projects us below 4% annual growth.  Inflationary
pressures, at least in the short term, are clearly building.  The latest jobs
report indicates backsliding.  While this new information has pumped the bond
market back up, these uncertainties are driving like a Toreador’s banderilla
(barbed dart) spears into the hide of the current bull.  Only a blow-out
earnings season will be left to carry this market to new highs in the remainder
of 2004 before election uncertainties begin to weigh us down. 

Odds?   No better than a spin of
the roulette wheel.

Key Question: Has the Bush and
Greenspan stimuli run their course as a rabbit runs through a snake — leaving
the economy with no new nourishment?

The Week’s Macro Data Market Movers: Inflation Fears?

 

The Macroeconomic Calendar

 

A total nothing week on the data front.   The only
thing that will matter will be earnings — or the random geo-political event du
jour.

 


Peter’s Picks: Cash

Reiterate LMT and WMB. 
Otherwise, cash is king.

 

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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