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Adjusting the Numbers

August 26, 2011 – 4:58 pm

This morning the second quarter GDP number was revised downward to 1% from 1.3%. That was expected and clearly demonstrates the weakness in our economy in the second quarter.

Of course the market is looking forward and Bernanke will be speaking this morning to give us a hint of what, if anything, he might do. The market will decide at that point to bounce up or sell off as it opened on the weak side.

Early in the week Durable Goods rose by 4% in July and unemployment laims increased 5,000. For the durable goods report it was not as good as the top line number indicates because without airline and autos it fell. However, that is much better than last month when the top line number came in at a minus 1.3% for June. The unemployment claims on the other hand was much better than the number indicates. Verizon employees were on strike and that represented 8,500 unemployment claims for last week and over 12,000 the week before. Those claims will likely be denied and the strike is over. So claims would have fallen for both weeks without the Verizon employees filing.

The market is trying to find and hold a bottom as it bounced this week from the lows made early in the month. The investors and traders are trying to adjust to slower growth and dealing with the fear of another recession, that most experts do not expect.

Good Trading
Steve Peasley

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