Post by Savant on Jul 19, 2004 4:38:21 GMT -5
Best Economy Ever: Part Deux - Published 05:40 EDT July 19 2004
The early part of this week is likely to be dominated by what Fed Chairman Alan Greenspan is going to say about our economy.
Will he summon the courage to call a spade a spade and yes, actually utter these longed for words: “This is the best economy ever – Bar none” He’s probably too humble to pat himself on the back that blatantly, but it will be a surprise to hear him not wax ebullient about just where we are and how far we have come.
As for Part Deux:
If you think the US Economy isn’t good enough to be called as good as it gets, the Brits have joined in the fray, declaring the UK economy to be the best since the early 90’s. Again, Hellooo…!
The UK economy of the 90’s has nothing on today’s economy which is honestly exhibiting statistics that even a few years ago were unimaginable and compared with two or tree decades ago, would be like predicting that man was going to land on the moon with the 25,000 to 1 odds that were offered by William Hill and Co of London in the early sixties. With unemployment at all time lows and UK employment truly burgeoning at new all time highs and robust and stable growth of around 3.5% expected to continue, it doesn’t get much better. Nor does the British Pound itself, clawing its way to highest level in almost a dozen years equal to almost two US$.
If the UK economy isn’t convincing enough, consider the rest of the World…. Russia and India with their underground economies are probably in varying degrees of hypergrowth and China is a moon-shot with the booming City of Shanghai registering 14.8% growth in the first half of 2004.
Sacre Bleu and Donner und Blitzen, France and Germany must be in awe and green with envy, but their turn may one day come, perhaps even in this decade as long as Greenspan doesn’t lose it and maybe realizes that there might be some rotation as some countries economies slow down and others need help.
Back in Shanghai, things are literally so hot, (temperature wise), that companies are being forced to operate at night. Already, two thousand Shanghai businesses are, having to work at night as daytime temperatures remain above 38C. A further 3,000 companies are being asked or ordered to introduce some night-time operations to distribute power more evenly, but in spite of everything that have been no power cuts so far, according to Chinese state television. Economists have warned that as China’s economy continues to grow at breakneck speed, it’s putting increasingly greater pressure not only on power supplies, but also on a number of resources such as Copper.
One thing is for sure: There is absolutely no doubt that this is the best Chinese economy ever…!
Since China has become such a fast growing and increasingly large component of the World’s economy, it can only bode well for the future and the current Global expansion continues in line with our predictions of 15 month’s ago and earlier that growth in this decade would be surprising, just as we also predicted new all time record highs in many US and Global stock market indices.
Last week turned out to be a pretty wild week, what with Intel getting pounded and dragging down some sectors in a still resilient market, but the Tech Sector could not withstand the pressure and it too provided a down drag.
The potential for us to find a bottom at any time cannot be totally ruled out because the elastic band is being somewhat stretched in a number of areas and with Bonds having rallied as dramatically as they have since rates were raised, with many thousands of bond traders apparently agreeing with our views that the Fed may have acted too soon, the potential for Bonds to break, could foment a sudden snap back or turnaround in the Stock Market.
In addition, the dollar weakened significantly and against a background of Dollar weakness for the most part of 2003 and early 2004 have been fairly supportive of most stock prices, as the rise in US Treasury Bonds has also been the forerunner or catalyst for several Stock Market rallies.
Notwithstanding the above, we did forewarn of the technical breakdown of the markets in early July as somewhat ominous technical development and we began to see the consequences of this unfold late last week. So far the pullbacks have been fairly orderly and as long as there is no real acceleration to the downside, then a continuing probing for a bottom may be the order of the day.
Trading Ideas and Updates
We are looking for a buying opportunity to develop in the Grain Complex this week. Coffee is a make or break type situation. We will try and update accordingly as the week unfolds…<br>
The Energy Sector remains vulnerable to a sudden breakdown or pullback although it has been firm so far, it is exhibiting signs of a possible interim top of significance in the making and if that is the case it could also be helpful to stock prices.
The reason we covered some selected stocks last week, was because, in spite of the overall market weakness, these stocks were exhibiting signs of imminent rallying strength, which turned out to be the case in pretty much all of those issues.
Meats continued weak following our call mid Thursday morning ending limit down in 3 out of the four contracts and continued weaker Friday.
Have a great week
Trade Well
Savant
The early part of this week is likely to be dominated by what Fed Chairman Alan Greenspan is going to say about our economy.
Will he summon the courage to call a spade a spade and yes, actually utter these longed for words: “This is the best economy ever – Bar none” He’s probably too humble to pat himself on the back that blatantly, but it will be a surprise to hear him not wax ebullient about just where we are and how far we have come.
As for Part Deux:
If you think the US Economy isn’t good enough to be called as good as it gets, the Brits have joined in the fray, declaring the UK economy to be the best since the early 90’s. Again, Hellooo…!
The UK economy of the 90’s has nothing on today’s economy which is honestly exhibiting statistics that even a few years ago were unimaginable and compared with two or tree decades ago, would be like predicting that man was going to land on the moon with the 25,000 to 1 odds that were offered by William Hill and Co of London in the early sixties. With unemployment at all time lows and UK employment truly burgeoning at new all time highs and robust and stable growth of around 3.5% expected to continue, it doesn’t get much better. Nor does the British Pound itself, clawing its way to highest level in almost a dozen years equal to almost two US$.
If the UK economy isn’t convincing enough, consider the rest of the World…. Russia and India with their underground economies are probably in varying degrees of hypergrowth and China is a moon-shot with the booming City of Shanghai registering 14.8% growth in the first half of 2004.
Sacre Bleu and Donner und Blitzen, France and Germany must be in awe and green with envy, but their turn may one day come, perhaps even in this decade as long as Greenspan doesn’t lose it and maybe realizes that there might be some rotation as some countries economies slow down and others need help.
Back in Shanghai, things are literally so hot, (temperature wise), that companies are being forced to operate at night. Already, two thousand Shanghai businesses are, having to work at night as daytime temperatures remain above 38C. A further 3,000 companies are being asked or ordered to introduce some night-time operations to distribute power more evenly, but in spite of everything that have been no power cuts so far, according to Chinese state television. Economists have warned that as China’s economy continues to grow at breakneck speed, it’s putting increasingly greater pressure not only on power supplies, but also on a number of resources such as Copper.
One thing is for sure: There is absolutely no doubt that this is the best Chinese economy ever…!
Since China has become such a fast growing and increasingly large component of the World’s economy, it can only bode well for the future and the current Global expansion continues in line with our predictions of 15 month’s ago and earlier that growth in this decade would be surprising, just as we also predicted new all time record highs in many US and Global stock market indices.
Last week turned out to be a pretty wild week, what with Intel getting pounded and dragging down some sectors in a still resilient market, but the Tech Sector could not withstand the pressure and it too provided a down drag.
The potential for us to find a bottom at any time cannot be totally ruled out because the elastic band is being somewhat stretched in a number of areas and with Bonds having rallied as dramatically as they have since rates were raised, with many thousands of bond traders apparently agreeing with our views that the Fed may have acted too soon, the potential for Bonds to break, could foment a sudden snap back or turnaround in the Stock Market.
In addition, the dollar weakened significantly and against a background of Dollar weakness for the most part of 2003 and early 2004 have been fairly supportive of most stock prices, as the rise in US Treasury Bonds has also been the forerunner or catalyst for several Stock Market rallies.
Notwithstanding the above, we did forewarn of the technical breakdown of the markets in early July as somewhat ominous technical development and we began to see the consequences of this unfold late last week. So far the pullbacks have been fairly orderly and as long as there is no real acceleration to the downside, then a continuing probing for a bottom may be the order of the day.
Trading Ideas and Updates
We are looking for a buying opportunity to develop in the Grain Complex this week. Coffee is a make or break type situation. We will try and update accordingly as the week unfolds…<br>
The Energy Sector remains vulnerable to a sudden breakdown or pullback although it has been firm so far, it is exhibiting signs of a possible interim top of significance in the making and if that is the case it could also be helpful to stock prices.
The reason we covered some selected stocks last week, was because, in spite of the overall market weakness, these stocks were exhibiting signs of imminent rallying strength, which turned out to be the case in pretty much all of those issues.
Meats continued weak following our call mid Thursday morning ending limit down in 3 out of the four contracts and continued weaker Friday.
Have a great week
Trade Well
Savant