Anthony Chan
Anthony Chan
beginning economy gradually increase instead justify market recovering rising sharp since stock
Since the beginning of this year, the economy has been recovering gradually....In that environment, a gradually rising stock market would be justified. Instead we got a sharp decline. Can we justify this rally? Absolutely....But we can't justify a thousand-point increase every week.
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Usually the devil is in the details. With this report, the greatest fear is that details of true labor market conditions will be found over the next couple of months instead of in this report.
december demand gain given instead last likely percent recession time
You typically see, from the trough of a recession to the time when the recession ends, a 1.3-percent gain in payrolls, ... From when the recession likely ended, in December of last year, we've had 0.004 percent gain, instead of that 1.3 percent gain. There's a pent-up demand for labor, given such a jobless recovery.
central certainly debate heat
This will certainly heat up the debate at the central bank,
labor market people shows
This shows the labor market in not overheated. And you can see that in, yes, not a lot of people are getting raises.
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When you listen to Greenspan's speech, you hear a fear about the sustainability of economic growth and no inflation pressures. Guess what that spells? Lower interest rates and postponing a return to higher rates, to insure the sustainability of growth.
bad fed hope numbers rays road
When you have a long road to travel, you don't take too many breaks. You just keep on going. We're one or two bad numbers away from reassessment of Fed policy, but we're not there yet. Yes, this number is weak, and yes, it's disappointing, but there are some rays of hope in here.
data gain hard homes looks month percent purchases reported reveal
When one looks at the MBA data that reveal that applications for the purchases of new homes are down 7.5 percent on a year-over-year basis, it is not hard to see that the gain reported this month is not a sustainable trend.
beating beginning bullet collapsing continue dodge eventually happen impact market month negative next rates rising sure
We will eventually see the negative impact of rising rates -- we can't dodge that bullet -- but doesn't usually happen at the beginning of the cycle. I'm not sure we will continue to see the market beating expectations by these margins, but I don't see the market collapsing in the next month or so.
continue creating difference jobs nine six
We will continue on this jobless path, where we're not creating enough jobs to make a real difference to the economy, for at least another six to nine months.
action fed next november perhaps rules until
This rules out any Fed action until November -- or perhaps until next year.
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This report was very encouraging. It gives us stronger employment growth than the market was expecting while none of negative side effects of economic growth are present, such as higher inflationary pressure from wages.
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This report supports Greenspan's rosy economic view that the economy is likely to continue to grow unabated this quarter thereby justifying continued increases in short-term rates.
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This report should soothe the fears of monetary policy-makers who are trying to adjust policy to prevent the economy from overheating.