Fed changes their wording of ‘balanced growth’. They didn’t go so far, but they did say, ‘Economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks.’
Hmmm...doesn’t sound as if growth is balanced with risk/inflation, does it? So why didn’t they just drop the bias? Because, they know that it could ‘spook’ foreign investors. And when foreign investors get spooked, they don’t buy our assets, and when they don’t buy our assets, the current account doesn’t get financed, and when the current account doesn’t get financed...the dollar gets weaker!
However, traders are not happy about that when they all trade on a minute basis today. If you follow their steps as a small investors, probably you could get wiped out soon.
2 comments:
Hi, haven't seen you for a long time. Hope you're doing well.
I don't think the rate cut would save the market either 25 or 50 points because it doesn't solve the underlying problem, declining housing price and a lack of clarity in the financials. A domestic recession seems more and more likely so a sell-off is just natural. I am moving towards consumer staples and aero/defense stocks which has better record in this kind of market.
hi hooper:) I am getting better. I would also look at healthcare sector this time , considering its relatively low valuation.
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