Thursday, May 5, 2011

Timing

We warned late March that gasoline prices would cut considerably into consumer activity, would cut considerably into GDP. Wall Street, resorting to all sorts of fancy formulas, disagreed. A growing chorus has now come to understand. It is too late.

Next, we predicted that the high risk of further violence in the Middle East put a floor under crude, yet that commodity plummeted today on the threat of a slowing economy. We’re not oil analysts but we understand the Middle East pretty well.

Finally, we noted Monday that tomorrow’s Payroll release carries great potential to worry the market, a little to cheer it. It’s not going to be awful, but likely south of expectations (+190M).

Robert Craven

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