Quote:
Originally posted by tabs
You boiyz should read Louis Naviler....
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From this month's Marketmail. It's Navellier,
http://www.navellier.com
"Friday, however, was a totally different story after Alan Greenspan warned at the G20 meeting in Berlin that the U.S. current account deficit is unsustainable. The deficit is around $600 billion, all of which needs to be financed by foreigners. Greenspan also alluded that he expects the dollar to get pressured lower as a result. Investors suddenly became alarmed about not only the dollar, which, by the way, fell to a four and a half year low against the yen, but interest rates, too. After all, if the dollar is primed for weakness and inflation is rearing its ugly head, the Fed is almost guaranteed to continue to raise rates.
In fact, Greenspan commented about worldwide interest rates by saying higher rates “have been advertised for so long that anyone who has not hedged his position by now is obviously desirous of losing money.” The fed funds futures contract is pricing in a 90%+ probability for another 25-basis point rate hike from the Fed on December 14 and about an 85% probability for 25-basis points more in early February. The 10-year Treasury yield popped from 4.117% to 4.196% on Friday, though it was flat for the week.
CONCLUSION
We appear to be heading toward a climate that has higher interest rates and a weaker dollar. This will certainly cause the stock market to get even narrower than it already is. Investors will need to be careful moving forward. Picking not only the right stocks but also the right sectors will be critical"