Post by Savant on Jul 7, 2004 2:31:16 GMT -5
Post Rate Hike Fallout….Published @ 03:54 July 07 2004
The shockingly weaker than expected June employment numbers coming in at 112,000 versus an anticipated 244,000 ~ 250,000 or so, stunned Wall St, but hopefully not readers of this column who were “prepared for the worst” as we predicted might be the likely outcome, given the extreme nervousness and market downturn directly ahead of Friday, and for new readers, we did actually initially present our case on Thursday at 10:23 PM.
If Bond Futures traders were caught short, on the wrong side of an emerging trend as we also suggested, then by mid-morning they were getting their lungs ripped out as they by that time were having to deal with one of the strongest post Fed rate hike rallies in Bond market history. At one point Bonds were almost limit up – an event almost without any precedent. Conclusion: The economy is weaker than the consensus economists predicted and it appears, the crème de la crème of Wall St were way off the mark on jobs also.
Regrettably, our revered Federal Reserve may have fallen victim to the same sentiments and as we suggested, may have prematurely panicked by preemptively raising rates early.
So where to from here: Well another shocking down day to start the new week Tuesday, has only conspired to make things even worse and in addition the trickle of bad news and torrent of downgrades has become to feel more like a flood. Is the bloodletting over?
Wednesday could be a pivotal day or perhaps Thursday may provide some reprieve. On the positive, at least we did not end up limit down on Tuesday in the Nasdaq (Down -50) and we started to come off the lows mid-afternoon which was a mildly encouraging sign.
Wednesday could bring an early to mid-morning rally, punctuated by downward probes to find a firmer footing from which to mount a counter-trend rally,
Bonds may ease some from their recent strength as rates snap back from recent declines but not by too much
For commodity updates and latest ideas please check Commodites, Futures and Currencies
Have a great Wednesday
Best Rgds
Savant
The shockingly weaker than expected June employment numbers coming in at 112,000 versus an anticipated 244,000 ~ 250,000 or so, stunned Wall St, but hopefully not readers of this column who were “prepared for the worst” as we predicted might be the likely outcome, given the extreme nervousness and market downturn directly ahead of Friday, and for new readers, we did actually initially present our case on Thursday at 10:23 PM.
If Bond Futures traders were caught short, on the wrong side of an emerging trend as we also suggested, then by mid-morning they were getting their lungs ripped out as they by that time were having to deal with one of the strongest post Fed rate hike rallies in Bond market history. At one point Bonds were almost limit up – an event almost without any precedent. Conclusion: The economy is weaker than the consensus economists predicted and it appears, the crème de la crème of Wall St were way off the mark on jobs also.
Regrettably, our revered Federal Reserve may have fallen victim to the same sentiments and as we suggested, may have prematurely panicked by preemptively raising rates early.
So where to from here: Well another shocking down day to start the new week Tuesday, has only conspired to make things even worse and in addition the trickle of bad news and torrent of downgrades has become to feel more like a flood. Is the bloodletting over?
Wednesday could be a pivotal day or perhaps Thursday may provide some reprieve. On the positive, at least we did not end up limit down on Tuesday in the Nasdaq (Down -50) and we started to come off the lows mid-afternoon which was a mildly encouraging sign.
Wednesday could bring an early to mid-morning rally, punctuated by downward probes to find a firmer footing from which to mount a counter-trend rally,
Bonds may ease some from their recent strength as rates snap back from recent declines but not by too much
For commodity updates and latest ideas please check Commodites, Futures and Currencies
Have a great Wednesday
Best Rgds
Savant
