These comments from Dave Rosenberg
Market Musings & Data Deciphering
Breakfast with Dave
September 22, 2009
WHILE YOU WERE SLEEPING
A freshly minted report from the Asian Development Bank forecasting faster-than-expected growth for the region — excluding Japan, growth is seen at 3.9% this year versus the March projection of 3.4%. This is having a fairly significant market impact this morning with credit risk declining, the U.S. dollar under renewed downward pressure (the Euro just crossed 1.48 for the first time in a year), commodities rallying right across the board, resource-based currencies, such as the Loonie and Kiwi (the latter also benefiting from a much lower current account deficit for the year ending June) and global equities, in most jurisdictions, in the green. U.S. equity futures are flying as the buy-the-dips psychology has become tremendously well entrenched — see Optimistic View on Rally on page 25 of the FT. A Barclays survey shows that bears are now capitulating en masse and now fewer than 1 in 5 believe this is a bear market rally ripe for correction.
POST-CLUNKER ECONOMY LOOKING CLUNKY
Edmunds.com just reported that U.S. motor vehicle sales so far in September are running at an 8.8 million annual rate — a 28-year low and a 38% plunge from the incentive-induced 14.1 million tally in August. If this is what autos do, imagine what housing does once the $8,000 first-time homebuyer tax credit expires (if it does) at the end of November (not to mention what the Fed does in terms of extending its mortgage purchase program beyond the December expiry too — it has had a hand in financing 80% of all new mortgage issuance. But look at the good news — at least we will be able to see what the economy can do without the walker.
Professor Elam 
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