Sign inMysteryTrader's Commentaries
Correction
It was overdue and had to happen sooner or later. U.S. stocks are finally having a much deserved and long delayed downside correction after being overbought for weeks.
Stock valuations are expensive, and overly optimistic general expectations are fully discounted, leaving little room for disappointments. So, even the smallest shortfalls in actual versus expected might be used as excuses to sell.
Ford Motor announced that it would borrow about $18 billion by the end of 2006, partly to provide a cushion against the possibility of a recession.
The U.S. dollar hit a new 19-month low on news that China now sees risks for its dollar holdings. True that prospects seem to point toward slowing U.S. economic growth and so the next move by the Federal Reserve might be to cut interest rates. Both would be downside drags on the dollar. A sharp enough fall in the dollar could spill over into demand for stocks.
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