I'm still keeping my powder dry
Steve Cook on Disciplined Investing

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Normal 0 MicrosoftInternetExplorer4 Economics

   This Week’s Data

    Second quarter productivity rose 6.4% versus expectations of a 5.5% increase; however, the first quarter number was revised from up 1.5% to up only 0.3%, taking a little starch out of this better than anticipated result.

    Second quarter unit labor costs fell 5.8% versus estimates of a 3.8% decline.

   Other

    Better than expected corporate profits doesn’t mean economic recovery:
    http://online.wsj.com/article/SB10001424052970203517304574306414148814226.html

    Debt to GDP (graph):
    http://www.ritholtz.com/blog/2009/08/bloomberg-us-indebtedness-may-keep-economy-struggling-long-term/

Politics

  Domestic

Here’s a new (and very scary) analysis of the economic impact of Obamacare on wages:
http://www.poorandstupid.com/2009_08_09_chronArchive.asp#3293351309667487047

    Stalling on free trade:
    http://www.ibdeditorial.com/IBDArticles.aspx?id=334450197653275

    Greg Mankiw analyzes ‘cap and trade’:
    http://www.nytimes.com/2009/08/09/business/economy/09view.html?_r=1

  International War Against Radical Islam

    Christopher Hitchens on Clinton diplomacy:
    http://www.slate.com/id/2224779/

The Market
    
    Technical
   
    The indices (DJIA 9337, S&P 1007) closed within their up trends off the March lows (8536-10234, 928-1137).  The S&P remained above the 1004 resistance level despite yesterday’s mild sell off.  This is the second consecutive day.  Volume was very light and the breadth indicators are narrowing.  As I said yesterday, the S&P seems to be struggling just as it did in its first challenge to 947.  I continue to hold fire but my finger is on the trigger.

   Fundamental
   
     Headlines

    David Rosenberg on the Market:
    http://www.ritholtz.com/blog/2009/08/david-rosenberg-on-bear-market-rally/

    Yesterday, the biggest headline was that investors were focused on the headlines for the rest of the week.  First, it is a big week for economic data (productivity, inventories, trade deficit, budget deficit, jobless claims, retail sales, consumer price index, industrial production, capacity utilization).  Second the FOMC is meeting today and tomorrow; and the chatter was centered on what, if any, policy changes may occur (and be communicated in the accompanying Fed statement).  Finally, the Treasury has another big auction--$75 billion in bills and notes.






Posted 08-11-2009 8:26 AM by Steve Cook