Daily Investment Interpretations
July 30, 2010
The markets ended today about where they started. The NASDAQ Composite
to finish at 2,254.70. The Dow lost 1.22
at 10,465.94, and the S&P 500
to end at 1,101.60. Oil ended at $77.96 a barrel, while Gold
said goodbye at $1,180 The VIX fell
While the chart below shows a steady decline, that's only because the first-quarter GDP was revised upward to 3.7%. If that can happen to first-quarter GDP in the third quarter, why can't it also happen to second-quarter GDP in the fourth quarter? If second-quarter GDP were revised upward in October from today's 2.4% to 3.4%, suddenly, the chart below would show a flattening-out, consistent with a recovering economy..
2010-7-30 (Morning): Dr. Kellner missed the call today. Second-quarter GDP came in at 2.4%, or very close to the 2.5% that had been forecast for it. Also, the Chicago Purchasing Managers' Index was a little better than expected, and consumer confidence, while down for July from June's anomalously high reading, was better than expected. Nevertheless, there was initial consternation because the first quarter's GDP was revised up to 3.7% from 2.7%, leading to the chart shown below.
This chart suggests a steady decline, projecting a negative GDP for the fourth quarter. However, these numbers are so subject to revision that such apparent trends aren't entirely convincing, and the stock markets are recovering.