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Equities rallied yesterday following the release of the minutes of the Fed’s September 18th meeting. I am not going to parse the words but the bottom line is that investors were encouraged by the unanimity of FOMC Board’s vote to ease money supply--thereby suggesting that should credit markets conditions continue to hamper normal business financing transactions, the Fed would take additional steps to insure liquidity problems don’t push the economy into recessions. Two points:
(1) I am encouraged by this and believe it to be a positive for the economy; however, I think it important to point out that the above quoted unanimity of concern was about a liquidity issue not a macro-economic one; in other words, I am again cautioning that further monetary easing [another drop in the Fed Funds rate] is likely only if credit markets are unable to clear normal business transactions but not because the economic data being reported is a bit erratic.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aq4TUMZuFDgw&refer=home
(2) The DJIA [14164] is approaching a 7% overvalued level though the S&P continues to lag. My focus is on stocks near their Sell Half Price or stocks that simply can’t rally in a strong Market.
News on Stocks in Our Portfolios
Thoughts on the valuation of oil stocks:
http://www.seekingalpha.com/article/49455-exxon-mobil-stock-up-big-but-underperforming-crude
More Cash in Investors’ Hands
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