Monday, March 19, 2007
The usual scenario during a steep market decline is for the Fed to inject massive funds and for the rate to decline below its target. This time, the Fed did not add enough money to do so. I don't see the strong support that we did on 9/11, in 1998 and 1987. The Fed seems willing to tolerate a little market correction.
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4 comments:
Deborah,
Perhaps the Fed did not want to convey any message at all ahead of the FOMC meeting.
Also, would very much appreciate your opinion on these long term charts depicting Put/Call and other ratios reflecting sentiment.
http://www.websitetoolbox.com/tool/post/fib_1618/vpost?id=1774366
Thanks much. Regards, Jim P.
Dear Jim,
I don't think the Fed is trying to avoid sending a message; I think they just want to keep rates where they are and avoid inflation.
The sentiment indicators you refer to cetainly suggest a "buy" signal. I will use them when the fundamentals, particularly bond quality spreads, are bullish.
All my best,
Deb
Hello Deborah,
Do you see the modest flatenning of the yield curve (more normal, less inverted) on Wedn. 03-21 post FOMC meeting as being a positive for equities going forward?
Always ccurious as to your intermediate to longer term outlook on the stock market.
Thanks, Jim P.
Dear Jim,
The "disinversion" of the yield curve is very positive. Not a surprise with a Presidential campaign coming up and a war going on. Both are stimulative.
Thanks for writing,
Deb
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