The unemployment rate rose to 4.2%, a 16-month high…indicating that the economy is slowing. Is that good or bad? Ever since the US presidential elections I’ve never seen analysts agreeing on what is good news and what is bad news…as for the unemployment rate’s rise it is bad on the one hand for indicating economic slow down, on the other hand however it should be considered good news for people who are banking that the Federal Reserve will make an intermeeting cut before the Fed meeting on March 20…
Then comes the growth of non-farm payrolls by 268,000 jobs during the month of January, indicating that economy isn't nearly as bad off as some analysts think which is not good news for those in favour of a Fed cut during the month of February…
So how do we work the news out? Good or bad? Doesn’t really matter if you ask me…good is not that good to think the negative sentiment is over and pile in the market and bad is not that bad to panic sell everything and stay out of the market for good…
But one sure thing is that markets do not like uncertainty…and the Americans keep reproducing it on every single news…only when this uncertainty is over one can be sure of a proper long term trend in US markets…until then it is going to be bounces up and down as I said in my previous Nas threads I am afraid…
Here is what two US analysts say about the markets as an example of disagreement on good/bad news…
"But you have to walk away with the notion that the Fed is on our side…Ultimately the market will be willing to discount the current situation and focus on the greener pastures ahead." Said Bryan Piskorowski, market analyst at Prudential Securities…
"The problem for the market is that the fundamentals are getting worse and you don't have good news to focus on [in the near term]. [Analysts] continue to chip away at earnings estimates. And we just don't know if current problems in the economy will be solved in six months and I think we built in too much optimism in January," said John Zaro, managing member at Bourgeon Capital Managemen
(no financial advice intended)
rizgar
[Edited by rizgar on 04-02-2001 at 11:06 PM]
Then comes the growth of non-farm payrolls by 268,000 jobs during the month of January, indicating that economy isn't nearly as bad off as some analysts think which is not good news for those in favour of a Fed cut during the month of February…
So how do we work the news out? Good or bad? Doesn’t really matter if you ask me…good is not that good to think the negative sentiment is over and pile in the market and bad is not that bad to panic sell everything and stay out of the market for good…
But one sure thing is that markets do not like uncertainty…and the Americans keep reproducing it on every single news…only when this uncertainty is over one can be sure of a proper long term trend in US markets…until then it is going to be bounces up and down as I said in my previous Nas threads I am afraid…
Here is what two US analysts say about the markets as an example of disagreement on good/bad news…
"But you have to walk away with the notion that the Fed is on our side…Ultimately the market will be willing to discount the current situation and focus on the greener pastures ahead." Said Bryan Piskorowski, market analyst at Prudential Securities…
"The problem for the market is that the fundamentals are getting worse and you don't have good news to focus on [in the near term]. [Analysts] continue to chip away at earnings estimates. And we just don't know if current problems in the economy will be solved in six months and I think we built in too much optimism in January," said John Zaro, managing member at Bourgeon Capital Managemen
(no financial advice intended)
rizgar
[Edited by rizgar on 04-02-2001 at 11:06 PM]
