(As of 7:39 am PST)
The market turned defensive
this morning after US GDP showed a small but surprise drop in the 4th
quarter, attributed to a big drop in defense spending. Consumer confidence was down as well as fears
from the debt ceiling and the prospect of major budget cuts added to the shift
in momentum. Markets were down, but only
by a small fraction. There are some
thoughts that the surprise contraction of GDP will give the Federal Reserve
more argument to continue the quantitative easing programs, which have provided
massive liquidity to markets. Gold is up
moderately, while oil is near unchanged.
It is hard to see any upside to today’s reversal of positive report
trends. Expect continuing deterioration
as the day progresses.
