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Thursday, February 18, 2010

Market Thought... surprise!

The Fed raises rates on the discount window. This is not really a surprise. We knew it was coming, and its gonna be coming through the year, and next year. We all know rates are too low, we all saw Australia increase the rates, and China doing what they can on multiple fronts.

All this is good news. It means things are working. The after hours does not reflect that because many were surprised that the Fed specifically didn't tell them they would raise a now irrelevant rate.

The SP500, as expected, rose to the SMAs, and with this rate hike, it is a good excuse to sell off.

The economy is getting better. I know this because pretty much every company I follow told us its gotten better in all the conference calls.

I see the continued efforts to facilitate job creation, which make it difficult for me not to like this market.

On the China front, anyone thinking China's issues will hurt the global economy in the short to mid term is mistaken. China is providing stimulus in a very smart way. They still continue to pump the money in, but are taking it out a different way. IMO, in such a way that they are facilitating a consumer orientated economy.

There will always be negatives, and potential instabilities, but we must put these negatives in perspective. To me, the only real uncertainty is the potential instability created by a deconstruction of the Euro. The EU community has a ton of problems they must address to save that currency. But because I am not an expert in currency trading, I do not know the ripple effect the destruction of the Euro will have. Hence my uncertainty. But if it survives, I know the out come.

(ps. I am still waiting to go heavy AAPL, IBM and GOOG)

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