Home
Up
comm040300

Co-brand Partnerships

award-5.gif (6517 bytes)

topsite.gif (1668 bytes)

webfifty.gif (6027 bytes)


 
drop_center.gif (2753 bytes)


wpe1.jpg (2095 bytes)


FREE EMAIL
Email Login
Password
New Users Sign Up!
 
MAILING LIST
Sign up for our weekly e-mail newsletter!
Tell Me More!

Enter your e-mail address
subscribe
unsubscribe
NEWS SEARCH
WEB DIRECTORY
WEB SEARCH
 CITY GUIDES
search by:
 WEATHER

Current Weather
Enter Your City, State, or Zipcode:

   

MASTERING
THE TRADE

ORIGINAL, INTERACTIVE SEMINAR ON TRADING USING
TECHNICAL ANALYSIS
 

 
EARNINGS ESTIMATES

Enter Symbol

U.S. QUOTES

Enter Symbol:

U.S. CHARTS

Enter Symbol:

TECHNICAL OPINION

Enter Symbol:

CANADIAN CHARTS

Enter Symbol


 SEC FILINGS

Search For:
 

Company Name
Ticker Symbol

 BROKER RESEARCH
Exclusive Broker

Research
Enter Ticker

 

MORNING COMMENTS WEEK OF 3/27/00-3/31/00

 

3/31/00

 

3/30/00

 

3/29/00

In the early stages of a bull market, the prospect of improving fundamentals down the road provides the impetus to higher prices. In the latter stages of a prolonged bull market, when the early prospects of improving fundamentals have been fulfilled, the rally often continues on driven solely by momentum and fear—fear not of a market decline, but rather a fear of the consequences of nonparticipation.

As a trend winds its way higher, and word of the easy money to be made spreads to the most remote outpost, the crowd of followers grows, their faith in the sustainability of the present environment becoming ever more deeply ingrained as the newly arrived money propels prices higher, drawing in more money, creating a momentum driven virtual circle that feeds on emotion rather than actual events.

It is perhaps no surprise then that as a trend nears its grand finale, the ability of fundamental events to impact the market decreases, and the ability of subtle blows to the crowd’s perception of the sustainability of the trend itself to impact the market increases.

Tuesday, one of those subtle blows to the late bull market psyche struck, accomplishing that which the FOMC’s interest rate hike last week was unable to do: produce jitters and create doubts among the fans of the market’s highest flying stocks.

The bull market’s greatest cheerleader, the pied piper of excessive valuations, sounded a cautionary note on Tuesday when she lowered her recommended exposure to stocks from 70% to 65%, striking fear into the hearts of the many who have come to believe 25% annual returns are an inalienable fact of life.

While Goldman Sachs recommended 65% exposure to equities is still far above that of many of its competitors and will not dislodge the firm from its place at the head of the "This time it’s different" table, the slight shift in stance was enough to spark a technology led market selloff, spooking many investors who were suddenly forced to contemplate a concept that many thought had ended with the coming of the New Era of wonder: the idea of 8%-10% annual returns from the stock market.

Although the impact of today’s jitter producing shift in asset allocation will likely not extend beyond today, today’s market reaction to the news did point out that at this stage of the game it is a continuation of exuberant sentiment, rather than a continuation of current fundamentals, that holds the key to the market’s ability to remain at its current historically lofty levels.

Of course, shifts in the recommended portfolio mix of an employee of a firm that stands to be a little less golden if the current exuberance ebbs are not the only thing that can cause a dip in the confidence of investors and consumers—rising oil prices can also do the trick, as Tuesday’s release of the March Consumer Confidence numbers from the Conference Board showed.

The Consumer Confidence Index fell to 136.7 in March from February’s 140.8, its second straight decline, and its lowest reading since October. The future expectations component of the index, also fell to its lowest reading since October, dipping 8.4 points to 106.2.

While the dip in confidence is a step in the right direction, the mixed picture painted by this month’s data is unlikely to sway Fed policy. Despite this month’s drop, consumer confidence remains at historically high levels despite nine months of Fed gyrations.

Although consumers’ expectations for the future fell, the present situation component of the survey rose to its second highest level ever, indicating that consumers are continuing to spend like there is no tomorrow despite surging prices at the gas pump, higher mortgage rates, wild swings in equity prices, and a hawkish central bank. If present economic conditions hold, there is little to indicate that the average consumer’s spending patterns six months down the road will be significantly different from their spending patterns today.

In short, unless the economy slows and current labor market tightness eases over the next few months, this month’s dip in the future expectations component of the survey is unlikely to be indicative of a coming slowdown in consumer demand. Unless this month’s dip in confidence carries over to upcoming economic data, the end of the rate hike tunnel is still far off.

Confidence suffered a one-two punch today but the patient, buoyed by a sea of liquidity and a deeply ingrained layer of complacency, is likely to make a full recovery in short order—an event which at some point in the not too distant future will force the Pre-Emptive Crusader and his merry band of rate pranksters to increase the pressure, raising the decibel level from 25 to 50.

 

3/28/00

 

3/27/00

 NO COMMENTARY PUBLISHED

DISCLAIMER

 

 
Search for it at the TulipSearch Open Directory
Investment Bookstore Investment Newsstand Market Mavens Report

TULIPS AND BEARS NETWORK SITES

 

FINANCE
Tulips and Bears
Contrarian Investing.com
Internet Stock Talk
Traders Message Boards
Traders Press Bookstore

NEWS AND INFORMATION
TulipsWeather
Freewarestop.com
TulipsMail
TulipsEspa´┐Żol
TulipSearch
TulipNews
TulipCards
AllMusicSearch.com
City Guides
Travel Center
Bargain Bloodhound

WEBMASTER TOOLS

BecomeAnAffiliate.com
TulipDomains
GoSurfTo
TulipStats
TulipHost...coming soon
TulipTools...coming soon
...coming soon




Questions or Comments? Contact Us

Copyright ´┐Ż 1998-2002 Tulips and Bears LLC.
All Rights Reserved.  Republication of this material,
including posting to message boards or news groups,
without the prior written consent of Tulips and Bears LLC
is strictly prohibited.  'Tulips and Bears' is a registered trademark of Tulips and Bears LLC


Last modified: April 02, 2001

Published By Tulips and Bears LLC