Monday, April 07, 2008

Tomorrow's Market Movers

Many of the market movements tomorrow will revolve around two things:

1) Pending Home Sales for Feb 08 -- released at 10:00 EST
2) FOMC Minutes (Fed Minutes) for their March 18th Meeting -- released at 14:00 EST


Current consensus for Feb home sales is negative. Contracts to Purchase Homes Probably Fell. So the real question becomes: How bad will the Feb figures be?

If the data shows greater than a 1% drop (which has already been factored into the markets), it'll probably be quite negative for the major indexes. Otherwise, it may be used as a positive spin for the "rebound" and a market positive for the day.


Analysts feel the Fed may be close to an end with rate cuts. (Note: They may state such in their minutes, but I believe -- only until the next major crisis). Anyway, if that is the case and FOMC minutes indicate so, we may see a dollar rebound and commodities selloff a bit, but the stock markets like cheap money and will also likely decline on this news.

Additionally, I think the FOMC minutes will be quite pessimistic w/regard to US economic activity.

- Consumers are pulling back on spending
- The US job market is contracting
- Consumer credit is declining
- Banking system is still stressed
- Overall: GDP is contracting (not good)

Bottom Line: I believe tomorrow, even with PPT interference/manipulation, will see a negative ending/close for the major indexes.

1 comment:

Randy said...

End Result at Day's Close -- As Expected:

Dollar Up, Gold/Silver/etc down, and Major Indexes (though down much lower in the day) still closed in the red.

BTW: Expectations for a 30 April Fed Rate cut are near certainty of a 25bp (1/4 point)and 50/50 odds for a 50bp cut.