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Economic data vs. Market Movement
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| Shakka |
| Just wanted to point out that the data has only gotten worse, yet the market keeps on chugging away. Irrational exuberance revisited??? It's funny how short the memory of a human can be. Same story for geopolitics. Simply astounding. |
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| occrider |
| Well it's actually reacting to the jobless claims and is declining today. My guess for the recent surge in the market is due to the recent positive earnings reports from the tech industries. Also there's been a lot of corporate mergers these past two weeks. Asides from the jobless claims, manufacturing has been relatively positive. |
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| Shakka |
| Bah! Maybe a few, but I don't buy it for the most part. They're still cooking the books, lying to investors, and stuffing the channels to come up with their numbers. The retail data this morning was abysmal. |
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| MisterOpus1 |
| quote: | Originally posted by Shakka
Bah! Maybe a few, but I don't buy it for the most part. They're still cooking the books, lying to investors, and stuffing the channels to come up with their numbers. The retail data this morning was abysmal. |
I'm surprised to hear that from you Shakka! I thought you were more or less an optimist with our economy. Why are you joining us cynics as of late? |
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| Shakka |
Seriously? I'm rather bearish on the economy in general--I've been pretty up-front about calling myself a secular bear, but believing we're in a cyclical bull/bear market rally.
I think you might mistake my stance on tax cuts and economic stimulus for positive outlook. There's still too much excess that needs to be worked off, not to mention a lack of growth catalysts in the forseeable future. The 90' were anomalous. |
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| occrider |
| Haha I'm not saying the economy is doing great. I'm merely commenting on why the market is necessarily doing better than the economy. But I'm a little hesistant to believe that every company is cooking the books :rolleyes: |
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| Shakka |
| quote: | Originally posted by occrider
Haha I'm not saying the economy is doing great. I'm merely commenting on why the market is necessarily doing better than the economy. But I'm a little hesistant to believe that every company is cooking the books :rolleyes: |
No. Of course not every company is cooking the books, but there are PLENTY that are tweaking the numbers and moving them around to make business appear to be better than it is. |
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| occrider |
| quote: | Originally posted by Shakka
No. Of course not every company is cooking the books, but there are PLENTY that are tweaking the numbers and moving them around to make business appear to be better than it is. |
But there is only so much they can tweak. Especially post enron and increased scrutiny by the FTC on everything. A company is either posting a gain or a loss. Much of the tech industry have been posting better than forecasted earnings. And manufacturing has been posting slight gains, so after the postive news the stock market has been increasing. However, as a result of the latest jobless claims, the market is correcting itself today as it looks like it's goign to dip back below 9000. So there was rational cause for a light hint of a bullish market however, that's been solidly crushed by the latest employment data. Oh well ... the labor market is slow to respond. Perhaps it will look less bleak once firms take advantage of earnings. |
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| Shakka |
| quote: | Originally posted by occrider
But there is only so much they can tweak. Especially post enron and increased scrutiny by the FTC on everything. A company is either posting a gain or a loss. |
That's what I would've thought. I mean Reg FD, Sarbanes-Oxley, Enron, Worldcom, Etc...you'd think the system would pretty much be clean after the enema it had, but I still read about little tricks here and there and how companies are able to 'make their numbers'. Funny how Cisco always manages to beat estimates by $0.01. I was reading about a company yesterday that was reporting "Pro-Forma Cash Flow"! HA! What a joke! Anyone with an understanding of finance knows that's a heaping wheelbarrel full of crap! |
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| rupert |
| quote: | | Seriously? I'm rather bearish on the economy in general--I've been pretty up-front about calling myself a secular bear, but believing we're in a cyclical bull/bear market rally. |
Exactly.
The current rally on the S and P is a bear market trap. The stock market in the US will only have a real recovery when it reaches fair value. Typically bear markets end with a PE Ratio of under 10.
The glory days of making mega capital gains by investing in the USA are gone and they will never come back.
If you look at previous bear markets there is always very sharp rallies before the market finally hits bottom. For instance in the Great Depression stocks only reached rock bottom in 1932, people were still buying stocks in the belief that the good times were coming back, in the stock market psychology is as important if not more important than economics.
An interesting comparision between what happened in the 1990's is Galbraiths The Great Crash. Its a small book which talks about the events which led to the Great Depression in the USA. |
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| Shakka |
| We as a people would benefit by learning from history, but like I said earlier, the human memory is a fickle device. People forget too easily. |
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