This market has no memory. The last two days they slammed the Investment Banks. Morgan Stanley was hit from 46 to 40, and can be picked up under 40. With weak claims, and backward looking inflation numbers, the market will look forward to lower interest rates.
Why lower?
Because this is the news headlines bandied about everywhere:
Consumer prices shot up in July at twice the expected rate, pushed higher by surging energy and food costs. The latest surge left inflation running at the fastest pace in 17 years...
That inflation surge presents a major problem for the Federal Reserve, which could be forced to start raising interest rates even as the economy struggles to avoid a recession.
http://biz.yahoo.com/ap/080814/economy.html
Anyone want to believe this? Anyone think the news outlet has the story right? By the end of the day, they'll have another story!
Another play is the West Coast refiners. Margins for gasoline for Costco on the West Coast have been terrific. Which means that the shorts in Western Refining (WNR 9.23) may get the itch to cover.
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