There's no two ways of looking at the consumer confidence figures....the lowest in years.....and yet the Dow is still trading sideways. Some retailers also came out today and lowered revenue forecasts, mirroring what the consumer confidence numbers indicated....consumers are tightenin their belts. And now a lot of the traders shrugged off the consumer confidence numbers as being before the .5% Fed rate cut....but if it were true that consumers have been appeased, then the retailers wouldn't have lowered guidance. Also, on the back of the housing and consumer confidence data, the interest rate markets are now pricing in an 80% chance of another .25% rate cut at the next Fed meeting. The Fed can only re-inflate this market so much before the fall-out of the subprime mess actually gets reflected in the stock markets. I personally cant understand the resilience of the US stock markets, but believe the longer a correction in the markets is avoided, the more severe it will be when it actually happens.
This mornings trade on the Dow and S&P is interesting insofar as the initial decline on both was down to a very strong support line....the bounce wasnt technically surprisig, but if the support line gets broken on the weight of bad news currently coming out of the US, then watch out below......imho
DOW Price at posting:
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