Green Book November 1984
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Featured Articles
Bond Market Summary
The pre-election target of 11.5% for T-Bonds was essentially achieved. Now the market looks overextended and a period of consolidation or correction is expected in November. Ultimately though, the upward move is expected to continue.
Inflation Watch...Still OK, But...
Examining our early warning inflation tools, we currently find few indications of an inflation resurgence. Only the CPI momentum work is somewhat disturbing. Herein we review this work, and also discuss the inflation outlook for 1985. In a strong economy, inflation could run to 7% next year, but the serious inflation danger lies down the road.
Inside the Stock Market
The DJIA and S&P were unchanged for the month while the unweighted indices declined one or two percent. For two months in a row now, equities have lagged far behind bonds. There were however some groups and sectors that performed pretty well in October.
Sorry About That…
Several clients have requested information as to the components of the Early Warning Index. We have no secrets....well, not very many, so here are the tools we use to help in identifying intermediate stock market tops.
View from the North Country
From a shorter-term tactical standpoint, we have lit the caution light for both the stock market and bond market. However, there are some possible post-election developments that would be cause for changing this somewhat defensive stance and once again becoming totally committed to stocks and bonds.
Table of Contents
Stock Market
Of Special Interest
Macro Monitor
Bond Market Summary
The pre-election target of 11.5% for T-Bonds was essentially achieved. Now the market looks overextended and a period of consolidation or correction is expected in November. Ultimately though, the upward move is expected to continue.
Inflation Watch...Still OK, But...
Examining our early warning inflation tools, we currently find few indications of an inflation resurgence. Only the CPI momentum work is somewhat disturbing. Herein we review this work, and also discuss the inflation outlook for 1985. In a strong economy, inflation could run to 7% next year, but the serious inflation danger lies down the road.
Inside the Stock Market
The DJIA and S&P were unchanged for the month while the unweighted indices declined one or two percent. For two months in a row now, equities have lagged far behind bonds. There were however some groups and sectors that performed pretty well in October.
Sorry About That…
Several clients have requested information as to the components of the Early Warning Index. We have no secrets....well, not very many, so here are the tools we use to help in identifying intermediate stock market tops.
View from the North Country
From a shorter-term tactical standpoint, we have lit the caution light for both the stock market and bond market. However, there are some possible post-election developments that would be cause for changing this somewhat defensive stance and once again becoming totally committed to stocks and bonds.