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Importance of Numbers

May 13, 2011 – 5:04 pm

Inflation news in the form of the PPI and CPI reports over the last two days suggest inflation is not a problem and if you add the steep fall in oil and other commodities in the last couple of weeks inflation is no longer a story.

Out this morning was the Consumer Sentiment report’s first look at May with a preliminary reading of 72.4 up from 69.8 last month. That was better than the 71 number that was expected. I really never liked this report as it tells us nothing useful. It does not tell you what the consumer is ‘doing’ only how he/she ‘feels.’ Supposedly how they feel reflects what they are doing but I find feelings are very fleeting therefore it all depends on when you take the poll. If something in nature happens like our flooding or the earthquake in Japan consumers feel bad but they don’t stop spending because of it.

I am more interested in things like jobless claims which in recent weeks was rising and that worried me. This week it spiked down sharply. Job search companies and job openings have increased nicely this month. Money in people’s pockets if far more important than how they feel.

The more the market moves sideways or down the cheaper it becomes.

Good Trading
Steve Peasley

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