[Yet while sentiments are that small-caps will rise as long as large-caps remain strong, some on Wall Street believe the bull market has a limited outlook for the near term.] Let me put it this way, the market is more likely to be down 10 percent (in a few months) than up 10 percent, ... But I don't look for any big correction. |
A Fed move in late summer is a high probability bet right now. |
Bond prices rose because the market was excited at the idea that the number of further rate hikes needed would not necessarily be large. The market is thinking that the Fed has two more rate hikes to go. |
But ... the trend in unit labor costs is still declining and I would argue that the market and the Fed will say that this is a one-time surge. |
But I would not treat it as a sign that consumer spending is falling apart and that we will have a weak first half of the year. |
Clearly Greenspan's luster has dimmed, and there's this worry that he's fired a lot of bullets and the bullets he has left won't do any good. |
Companies aren't afraid of being left in the dust; they're afraid that if they go first they'll be eaten by sharks, ... Everybody is standing in front of the turnstile, and nobody wants to go through. |
Economists have to worry that if consumer sentiment remains depressed, spending could follow that down and you could have a much weaker outcome (in terms of economic growth. |
Even though the PPI has accelerated, it hasn't passed over to consumer goods prices, and it hasn't passed through into wage gains, |
Even though the PPI has accelerated, it hasn't passed over to consumer goods prices, and it hasn't passed through into wage gains. So as long as you have a great story on labor costs with productivity, you can't really have an inflation story. |
I don't see anything in the speech that is relevant to the near-term outlook. |
I lean toward a half point instead of a quarter. The Fed wants to shore up confidence, to show that, unlike the European Central Bank, it feels your pain. |
I wouldn't make a lot out of those figures. |
If your period of turbulence is less than two or three months, ... then we can probably avoid a downturn. |
It takes pressure off the Fed to hike interest rates more dramatically [than a quarter point] in August or put together a more forcefully worded statement next week [at its monetary policy meeting], |