When all you read is gloom, turn here for a much different perspective.

Saturday, November 29, 2008

Mumbai, Black Friday, Cyber Monday

So did any of you get up at 4a on Friday to go shopping? If so, did it appear to you that consumer confidence was low?

I found it very interesting that the US stock market was not phased at all by the 24x7 reports of terror in the streets of India's financial district.

From the reports in the retail sectors of the US in the early morning, the lines were long and unfortunately the stampedes were deadly! The prediction of a significant decline in consumer spending this holiday season seem grossly exaggerated. Consumer sentiment may not be strong, but from the parking lots of Walmart it certainly did not appear to be weak.

And the market continued its weekly advance on what was a slow trading day.

Cyber Monday is almost here, with an almost instant reading on just how the spending season may unfold.

The market seems poised for a comeback. Perhaps it is time for a breakout session.

Tuesday, November 18, 2008

All business eyes on the macro market

With the election behind us, all industries, including recession-proof sectors have their eyes on the macro market. Despite the continued volatility in the stock market, some positive macro economic market indicators have emerged.

With oil prices continuing to fall, the US consumer is gaining significant savings at their local gas station. Since a peak in mid-summer, the price for a gallon of unleaded as fallen almost $2. With the US consuming close to 390 million gallons a day, that savings translates to a $780 million dollar stimulus package for US citizens with no congressional action required.

The business credit markets continue to thaw. According to Bloomberg, borrowing volumes are up by more than 10 times what they were in early October. In a further indication of a world market economy on the mend -- large international banks like Chase and Citigroup are lending to their counterparts like HSBC Bank of Europe.

And the market for commercial paper — the unsecured debt that companies sell for short-term financing — continues to improve. Just a few weeks ago, even the strongest companies like AT&T were having trouble selling paper for longer than overnight. Now, investors are starting to step back in and buy paper with 30-day and 60-day maturities.

And surprisingly in a Reuters report released on 11/14, US consumer confidence actually rose in November from October’s depressed reading.

October was tough. A recession is already likely. But significant economic engineering on the global market scene has already produced some positive results.

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