Tore kui nõudlust on, 21. märtsi börsipäev siis sellise algusega:
Don't Seek Clarity From the Fed
By Rev Shark
RealMoney.com Contributor
3/21/2006 9:01 AM EST
We feel safer with a madman who talks than with one who cannot open his mouth.
-- E. M. Cioran
New Federal Reserve Chairman Ben Bernanke provided some subtle insights into the future of monetary policy last night at a speech at the Economic Club of New York. Although Bernanke offered up some optimistic comments about the economy, the market reaction was generally negative because a healthy economy raises the potential for inflationary pressures and is likely to lead to more interest rate hikes by the Federal Open Market Committee.
On the surface, Bernanke's comments seem quite benign. He doesn't believe that the flat yield curve necessarily indicates an economic slowdown and doesn't see the heavy use of adjustable rate mortgages as being a problem. There was nothing surprising in the speech but the upbeat comments about the economy helped solidify the view that more rate hikes are on the way. The market has been choppy and volatile lately with little leadership and a confusing mishmash of action.
The most likely explanation for this behavior is lack of certainty about what the Federal Reserve might do. We don't have clarity and that is keeping the market range bound.
One of the ironic things about the Federal Reserve is that much of its market influence lies not in what it does but in how clear it is about what it will do. If the market knew with great certainty that the Fed planned two more rate hikes of a quarter point each and would then stop, there is a good likelihood we would have a strong rally as the news hit. The Fed is aware that announcing in advance what it plans to do is as good as actually doing it so the only way it maintains its power is to keep everyone guessing. As long as we aren't sure what it might do, it continues to control the market.
One of these days we will get some greater clarify from the Fed but today isn't that day. In fact it looks like the primary message from Bernancke is that the economy looks pretty darn healthy and we are likely to continue to raise rates for a while yet. That means this unclear market environment is likely to continue for now. The technical patterns are mixed. There is little momentum and the news flow is not good or bad enough to create a new trend.
The core PPI number just hit and is higher than expected but the overall number declined. Once again there is no great clarity there for the market to react to and that will simply keep things volatile.
Our job is to patiently navigate the choppy market seas; it is not the time to make big bets on market direction. There are good trading opportunities in individual stocks but time frames need to be kept short until we have greater market clarity. There are positives and minuses out there that cut both ways, and the best way to get in trouble is to be inflexible.
Overseas markets are mostly down on Bernanke's comments and we have a negative start underway this morning.