Greenspan not giving the Nasdaq a hand…

Riz

Experienced member
1,266 5
Alan Greenspan’s speech lacking the likeliness of an inter-meeting rate cut disappointed investors and caused Nasdaq drop 55.99 points (2.5) to 2,151 and form a fresh year low…

Greenspan reiterated most points he made on his Feb. 13 appearance before a Senate panel, noting that the economy's slowdown has "yet to run its full course." and suggesting the speed of the downturn does not appear to merit an emergency interest rate cut… also predicting predicting that the economy's slowdown "has yet to run its full course."…

"We think Wednesday's testimony reduces the probability of an inter-meeting move but the Fed still acts aggressively cutting rates in a front-loaded fashion over the next few meetings," said Mary Dennis, senior economist at Merrill Lynch prejecting a 50-basis-point ease on March 20 and a fed funds rate at 4.5 percent by the first half of the year…

Joel Naroff, chief economist at Naroff Economic Advisors on the other hand said, "If spending remains solid, then the cut could be only 25 basis points. However, any sudden retrenchment in spending, especially on housing or vehicles, will lead to another series of sharp Fed moves. The consumer will determine Fed action and the numbers to watch are any that have to do with spending, not necessarily confidence…"

There are also those coming with strong words: "Tuesday's economic releases made it evidently clear what the markets have been saying for some time now. We are in a recession. It is not worth quibbling over technical definitions. The question is how severe will it be and how long will it last. We don't just bounce out of recessions. It takes significant Fed action," said Bridgewater Associates in its daily commentary…

Nasdaq losers beat winners 2,286 to 1,414 as 2 billion shares changed hands….

Though all areas of technology stocks including chips, software, hardware suffered, fibre-optic equipment maker Avanex was one of the big decliners losing 17% to $19.69 after after cutting forecasts for earnings amid a sales slowdown….

So the question is now where the Nasdaq and its UK tech satellites is going to head from here now that we know the earliest rate cut is 3 weeks later…must be interesting to note that no analysts made any guess in this regard…another one could be if the tech stocks had bottomed out after today’s decline both in UK and US…

Might be early to make guesses but it looks like it’s still too early for even a short term correction rally that would start another downtrend as most analysts were suggesting…sideways would be best option hoped for till this cuncertainty and confusion in US markets and economy is cleared…still some quality tech stocks like log, sge, etc. that were hammered down aggressively and undeservedly in this turmoil must show strong bounces to recover at least part of their losses…those companies with weak results and growth potential are going to be hammered further…

I wouldn’t hold any tech stocks long…intra day/hour, very short term might prove fruitful however under these most volatile circumstances with high risk of finger burning of course…

So watch out and be patient please…

rizgar
 
 
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