3.7.08

3.7.08

      The best thing you could probably say about this week is that at least it’s over. For the week, the Dow fell -3%, the S&P 500 -2.8%, the Nasdaq Composite -2.6%, and the Russell 2000 -3.8%. Year-to-date, the Dow is now down -10.3%, the S&P 500 -11.9%, the Nasdaq Composite -16.6%, and the Russell 2000 -13.8%.

         We have a relatively light week ahead in terms of economic data. The most significant reports come at the end of the week with retail sales on Thursday and the CPI and Consumer Sentiment reports on Friday.

         In a move to improve liquidity, the Fed announced it is increasing the size of its Term Auction Facility (TAF) to $100 billion. The Fed advertised its use of TAFs on Dec. 12. The TAFs are designed to improve liquidity by allowing depository institutions to borrow short term funds in an anonymous manner. Also, the Fed allows a broader range of collateral than what can be typically used. The Fed said its move was unrelated to the weak employment reading.
       The volume was somewhat light for the week which showed little or no fear. Being in an oversold condition, we feel there is a better than average chance of an oversold “bounce” in the cards for the market this coming week.
       We are still 100% in cash and will not be in a hurry to change until we get some better indicators going forward.

Till next time

 
The MTA Staff