MARKET COMMENT
November 1, 2006
A correction is starting just as the new month begins. It’s like I said yesterday; “Who knows where
news will come (from) to either rally stocks or knock them down.” With markets overbought and poor economic
news being repeated again (today from a worse than expected ISM number and,
surprise, poor housing data) it was easy to push markets down. We’d rather them go sideways and by the end
of the week that may prove the case, but we’re not in charge.
Bond and stock investors will be looking ahead now to Friday’s
job report for signs of further weakness.
Previously weaker than expected numbers have been greeted warmly by stock
bulls who believed the Fed wouldn’t raise rates. They may now sing a different tune “if” jobs
data indicate an economic “hard” versus “soft” landing.
The day started off nicely enough, but now with October
window-dressing complete early November may prove a time to correct. The employment data will have an impact on
Friday.
Have a pleasant evening.
Disclaimer: The ETF
Digest maintains positions in: SPY, IEF, TLT, PWO, XLU, DVY, SWH, EFA, EWC, EWA
and EEM.