Nasdaq tanked…

Riz

Experienced member
1,266 5
Nasdaq resumed its downhill movement after going up for two days…by going down by –100 to 2,208…lowest close since Jan. 4, 1999 and just 50 points of its 26-month low of 2,156 set on Friday…as investors contended with more economic data revealing that the economy is slowing fast and wondered if the Fed will really cut rate cuts between meetings…

News that consumer confidence fell to its lowest level since June 1996 in February together with negative comments from analysts initially disturbed the market….causing all sectors of techs drip in red ink, led by fiber-optic, Internet, software and networking shares….

Cisco Systems fell 7% to a new 52-week low, Sun Micro lost 4.2%, Qualcomm plunged 9% and Oracle down 5.4%. Only Intel, up 0.4%, and Microsoft, up 0.3%…

Market breadth was negative, with decliners outpacing advancers by 25 to 12…

Expectations for a rate cut before the next Fed meeting on March 20 has got higher over the past week as recent economic news suggested that the U.S. economy may need more help from the Fed than previously anticipated…Analysts hoping for an inter-meeting Fed move note that it may hit when the market least expects it so the central bank can get the most "shock value" from it….

There are also some analysts believing that the Fed will wait until the March 20 Fed meeting to make its move precisely because unexpected changes in rates draw the largest response from investors and households…

David Gilmore, a partner at FX Analytics sees the chance of a between-meeting move at just 20%, countering Bear Stearns' chief economist Wayne Angell's call of an 80% chance on Monday…who would you believe?
Ian Shepherdson, chief U.S. economist at High Frequency Economics however believes there's a good chance the Fed will ease before March 20 with Fed chief Alan Greenspan's appearance before the House Financial Services Committee Wednesday of prime importance. .. "He could use the occasion either to explain a rate cut in the wake of the confidence numbers Tuesday or, more likely, to drop hints that one is coming very soon after Thursday's NAPM results," he said…

Wayne Angell, an economist a Bear Stearns who also is a former Fed governor stood by his prediction putting an 80% chance on a rate cut this week…
It looks like most analysts agree that lower rates will eventually come…

"The difficulty of for the market is guessing which day," said Greg Jones, economist at Briefing.com...
As usual more confusion and uncertainty in the other side of the ocean causing the markets going further down…well at least this last confusion will be over tomorrow when Alan Greenspan is expected to update his State of the Economy testimony at 9:30 a.m. in an appearance before the House Financial Services Committee…

Over all…a between-meeting rate cut is not going to change the economic situation in the US over night neither it’s going to start a sustained Nasdaq rally…the only good thing it could do would be stopping the decline and providing a short term rally, as it is the company earnings behind all this sentiment and lower interest rates can only start to effect them after the second quarter…as for the intra-meeting rate cut, well let’s just wait and find out tomorrow…

rizgar
 

Similar threads


AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock