More Weak Economic Data

No surprise, but the market looks to open lower based on more weak economic data.  We’ve been preaching this would continue on the radio.  My leading economic indicators continue to point to more weaker data in the coming weeks and perhaps months.  63,000 jobs were lost last month.  The estimates were for an increase in 23,000.  The Dow futures are down over 150.

What’s interesting about this is that about 15 minutes before these numbers came out, the Federal Reserve announced it will expand two short-term auctions this month to $100 billion, from $60 billion.  Essentially, this means they are adding more liquidity and doing more behind the scenes to the help the credit crunch.  These are the types of things they must do as cutting interest rates will help but it isn’t a borrowing problem right now, it’s a lending problem.

I think the timing of the Fed announcement is interesting.  They announce what’s perceived to be good news by greasing the wheels of the economy so to speak in front of some news they knew would be bad.  So far, the market’s not buying it.

The washout for this mini cycle could be upon us.  Remember, if you’re wanting to buy stocks and you’ve had cash, you want other investors to give up so you can scoop up the bargains.  Getting closer.

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1 Response to “More Weak Economic Data”


  1. 1 MJS March 7, 2008 at 8:46 am

    Karl,

    I really enjoy the new blog, as well as your commentary on Dan F’s show. Keep up the great work. Your insight is valuable and incisive.

    MJS


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