The mantra of those days is that all news are mixed. Bears can dig enough garbage when they want. Bulls have enough of good news to cheer up, especially if they ignore bad news.

What happened this week:

  • Manufacturing rebounded from dangerous lows
  • Earnings are good
  • Productivity rebounded, but still at 10-year lows
  • There are some negative developments in the CMBX commercial mortgage CDS
  • Jobs are now pointing that recession is possible very soon

What to watch next week:

  • Feds will say something pleasant, as usual
  • Retail sales could be weak
  • Purchase price index may show some price compression between input and output prices
  • Suddenly, PPI and CPI became very important. I think when we’ll see a noticeable slowdown in inflation, the Feds will immediately lower the rates. IMMEDIATELY.