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Institutional Advisors initiates
coverage of GDP with a "Sell".
January 30th, 2003
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On the latest report, the Consumer Comfort
(sentiment) Index (ABC/Money Magazine) is at a nine-year low.
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The deltas mark the instances when the
index has plunged 5 points, or more, in one week.
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The plunge in confidence in 1990 and 2001
crisply signalled the start of recession. The latter's signal is still
valid and those since could be considered as a series of warnings. It
should be emphasized that the eruption of car and home buying out of 9/11
is anomalous in the history of post-bubble contractions.
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Omninously, this series of warnings has
been accompanied by the only series of stock market downside
"capitulations" since 1929 to 1932. (The ABC index is not available for
that contraction.)
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GDP has no board lot and can't be traded.
Moreover, it has negligible predictive value in positioning things that do
trade. Occasionally, when something instructive comes along, it prompts a
comment.
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Bob Hoye
Editor & Chief Investment Strategist
www.InstitutionalAdvisors.com |
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