Upsy Tipsy...

The Dow climbed a fairly nice 170.38 points last week. So far, all economic data are supporting the possibilities of more rate cut this time round, probably another 25 basis points. The only surprise I had was the employment report last Friday. I was expecting optimism in the market only if the employment report also turn in a little gloomy BUT NO! :) What happened was a textbook response to the employment report which turned in much much better than expected! :) Equities futures SOARED at 0830am when the report was released and a huge wave of optimism roared through the financial system, lifting equities and the dollar in a response we learnt only in our finance textbooks. :) (ok, for once the textbooks were right!) With the numbers continuing to point towards a rate cut when the Fed release their policy statement end of the month, I would expect further pricing in of the rate cut throughout the month at decreasing velocity.