Market Commentary: Economic Statistics

  We have seen weak economic statistics this week while at the same time the stock market rallied. Why? First, the economic numbers were not as bad as expected. GDP was down .3% for last quarter but the expectation was for .5%. Housing prices were down for new construction but inventory shrank at the same time sales jumped.  Consumer spending fell when adjusted for inflation. Not adjusted it was up slightly. Inflation for September was still strong but oil prices have fallen dramatically so inflation is going to ease in coming months.

Yes, the economic news was not good but stock prices have fallen so strongly that they reflect an economy that is in a free fall and it appears that instead we may only enter a normal recession.  If that is true stock prices are at bargain prices. 

Will all the efforts of all the world governments to save the financial system work? If your answer is yes, it’s time to invest; if no, then stay out.

Good Trading
Steve Peasley 

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