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Dow is probably going to go up 300 points today
- Thread starter Mill
- Start date
dullard
Elite Member
Numbers initially look good, but if you look at the details, they don't say nearly as much positive news. Thus I expect the initial gains to retreat and possibly end the day in a slight loss.
[*]Confidence return is great news, but it is still below 100 and still below pre-Katrina levels.
[*]New home sales are great news, but it is due to Katrina victims needing homes. And it is just a small fraction of the slowing real estate market.
[*]Durable goods are up big, but if you exclude the fact that Boeing had a strike last month (and thus counts double for orders this month), durable goods are flat.
Basically, we had a horrible month in Sept and October just returned us back to normal. The return to normal always appears much bigger than it is. For example, suppose a volitile statistic was at 1000, dropped by 25% one month, and then returned to 1000 the next month. What was the gain? 33.3%. Looks like it went up a lot more than it went down. When in reality it just fluctuated around one base number.
[*]Confidence return is great news, but it is still below 100 and still below pre-Katrina levels.
[*]New home sales are great news, but it is due to Katrina victims needing homes. And it is just a small fraction of the slowing real estate market.
[*]Durable goods are up big, but if you exclude the fact that Boeing had a strike last month (and thus counts double for orders this month), durable goods are flat.
Basically, we had a horrible month in Sept and October just returned us back to normal. The return to normal always appears much bigger than it is. For example, suppose a volitile statistic was at 1000, dropped by 25% one month, and then returned to 1000 the next month. What was the gain? 33.3%. Looks like it went up a lot more than it went down. When in reality it just fluctuated around one base number.
PlatinumGold
Lifer
the u.s. economy is really scary right now.
we aer no longer creating wealth we are riding the margins of inflation.
its a bubble on a very large scale.
we aer no longer creating wealth we are riding the margins of inflation.
its a bubble on a very large scale.
1. The level is more important now that we are in the biggest retail quarter of the year. Gas prices have come down so much that consumer confidence is really getting a jumpstart. The reason it rising was a big deal was that it beat estimates by 9 points, which is pretty massive for the CCI.
2. No doubt real estate should/is slowing, but these new starts were not due to Katrina Victims. The largest increases were in areas where there are NOT many Katrina victims, and some of the smallest increases were in areas of Katrina victims. I think it is an argument that sounds good on the surface, but not sound when you actually look at it.
3. They allow them to fudge numbers like that?
I don't think the Dow will quite go up 300, but it will finally close over the pysch barrier of 11k.
The indicators look good for a nice afternoon rally, and I don't think the traders are going to keep saying "Katrina" and using that to push away all good news. Katrina has been factored into stocks and the economy for quite some time now. All we've yet to figure is the totality of the increase in the Gov's debt because of this.
New Home Sales:
West: Up 46.9%
Northeast: Up 43.3%
South: Up 1.9%
Midwest: Down 9.5%
There really aren't that many Katrina victims in the areas of large growth, so I don't think your hypothesis is supported by the facts...
AccruedExpenditure
Diamond Member
The market has already reacted to these indicators and adjusted its price accordingly.
dullard
Elite Member
Well, many didn't return to the south. I don't have a link to it, but I read a couple weeks ago that many who were buying a house weren't going back. Anyway, my main point was that a nationwide increase of 160,000 new home sales isn't that much in the overall picture of the housing market. If it continues high, then that is another story. I'll report back with next months numbers.
Most are in the South, though:
http://www.dallasnews.com/sharedcontent...ge/stories/112305dnnatfema.f84da7.html
drnickriviera
Platinum Member
But if the Fed sees this data as good, then they are less likely to stop the rate hikes.
Lasthitlarry
Senior member
I'm just ridin the Nasdaq
Does anyone else think the economy has been so well that it's going to "crash" next year?
I gotta trim some this month
Does anyone else think the economy has been so well that it's going to "crash" next year?
I gotta trim some this month
dmcowen674
No Lifer
Wow, AT's very own Administration talking head. Pay must be great. :roll:
Even if it does, it'll correct tomorrow on profit taking. I don't see what's worth getting exited about. Dullard is right about the durable goods orders. If consumer confidence is so high, why has this been such an awful year for retail and more specifically, why were the retail numbers from the black friday weekend so lackluster and why have automotive sales been down so sharply since August? I think consumer confidence is still in the can for the most part and it's going to take at leat 6 months of sub-$2 gas to really make an impact....
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