Tuesday, August 19, 2008

positives vs NEGATIVES, Update August 19th

The positives have changed:
1) Election year: The psychology of a new administration taking over the reins rarely hurts the equity market. Both Senators will be announcing their Vice Presidential selections very soon, and that will cause some reallocation of monies by institutions… caution. Consider what happened to Halliburton shares in the last 8 years since the installation of V.P. Cheney. So, for those who think money & banking aren't interrelated, think again! We ask you to handicap both Vice Presidents and see whether there is some corporate background or some legislative history that would favor a certain sector, i.e. biotechnology/stem cell research.
2) Gross Domestic Product (GDP) fails to signal recession: GDP has not broken through zero - and we stated in the past we do not feel it will - but we're concerned with dark clouds forming in Asia and Europe. Is it possible that the Asian and European slowdowns will worsen and our GDP will break through zero? POTC is definitely monitoring that, but as of today, GDP remains in the positive column. http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/gdp.htm
3) Extreme pessimism in the Michigan Consumer sentiment looks to have bottomed with oil breaking down over $35/barrel from its peak. http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/mich.htm
Will the consumer begin spending this extra disposable income on clothes/retail goods as gas falls below $3.50 or $3.00? That's the $64,000 question. Some economists feel the psyche of the consumer is broken for months and maybe years to come; what do you think?
The negatives have changed:
If you would like to receive this and future posts and market analysis, please send an e-mail to Psychologyofthecall@gmail.com and make sure that your e-mail client will not consider messages from that address as spam.

No comments: