Biding time on Wall Street
by Peter Switzer
That said, the Dow only lost 5.45 points and the S&P 500 slipped just over one point. I call it flat but it makes me think that a bad jobs number will unleash seller tension but on the flipside a better than expected result will reinforce the rally.
The retail result wasn’t that surprising given the softer economic data and it does suggest that it might be too early to get too positive about this unemployment show and tell tonight.
Talking to Chris Cuffe — one of Australia’s best fund managers, from Third Link Investment Managers — last night on my Sky News Business Channel program, he warned unemployment may stay high despite an improving economy and a better stock market.
He doesn’t know when the market will take off but as a long-term investor he knows it will.
He has exposed himself to emerging markets and our trade figures this week show why you would do that. He has also positioned himself with real estate investment trusts (REITS), which shows he believes the worst is behind us.
Finally, he has a small holding of cash and is heavily locked into more risk assets.
Set up for rally
Whatever happens with this employment report, unless it’s a disaster, I reckon we’re setting ourselves up for a significant rally, which will be better than the one we have already had.
This opinion has come from the better US company reporting season and the increasing weight of smart guys and gals that I watch and listen to.
Let’s hope I’m on the money, but the important thing is to not get too despondent if these damn job numbers don’t deliver tonight.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
The Switzer Super Report is a newsletter and website for self managed super funds. With exclusive commentary from Peter Switzer and Paul Rickard the Switzer Super Report will help you maximise your after tax investment returns and grow your DIY Super. Click here for a free trial or subscribe today.
Published on: Friday, August 06, 2010blog comments powered by Disqus