Daily Investment Interpretations

May 31, 2009

2009-5-31:  It's interesting to note that only the NASDAQ Composite has surmounted its 200-day moving average. The Dow and the S&P 500 indices have approached their 200-day moving averages and have bounced downward off them. The technical advisory service to which I subscribe, normally optimistic, is in a wait-and-see mode right now, waiting to determine which way the markets are going to go when they break out of their present trading range.
    Long-term, the U. S. stock market appears attractively priced.
    Paul Krugman, Permanent Link to What you donít know Ö, has cited a Friday Wall Street Journal that again raises the question: Are the Chinese leaders "cooking the books"? The article observes that Chinese growth in GDP has moved in lockstep with rising electricity consumption. Recently, though, electricity consumption has fallen while GDP (officially) continues to advance. Now, China's electric power producers have stopped publishing power generation data.
    The article, Does China need green shoots?, notes that the flood of liquidity provided by the world's governments, rather than being loaned out by banks, is finding its way into emerging markets, not because the economies in these countries have improved, but because there's so much money looking for a place to invest. Fund managers are experiencing performance anxiety.
    On the other hand, this article, China factories still strong, suggests that the Chinese recovery remains on track.