Stabilizing ... that is the key word that investors are reacting to.
The report was very confusing. The general consensus feeling is that no one knows what, if anything the Fed is going to do.
We're coming close to a heavy reporting season. We will start to hear positive or ... more than likely negative surprises like what we saw with Computer Associates earlier.
We seem to be showing a little bit of a recovery, we were at one point down double digits.
That kind of news will spook the market and we will hear more of it because we're at the peak earnings reporting season.
If they were to cut rates, it might endorse the view that the Fed believes inflation is not a problem. And that can be a dangerous game.
What all this tells us and is certainly telling the Fed is that maybe we need to examine what the sustainable growth rate really is. The risk is that we have an economy that is growing at a pace that historically suggests we should see inflation pressures, but we're not seeing that yet.
People are still not ready to call this the bottom of the market.
On the surface it looks very impressive, but we still feel there are a few hurdles that we need to overcome, but we've made a good step at challenging those levels.
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