Boxing is a messy sport, no doubt. If you don’t knock your opponent out, you can only win by scoring more points, and this is why it is messy. Judges watch the back and forth punching and try to ascertain which punches land and which punches are effective. If one boxer seemingly lands more effective punches, that fighter will win the fight on total points, if he or she is not knocked out, as I said. The subjective analysis of boxing judges is often messy, as what one sees another might not, and one punch might be effective to one judge and not so effective to another.
Our economic struggle today is like a prizefight, and the economic analysis we get is similar to the judges in a boxing match – each economic report that comes out is a punch that “judges” attempt to define in context of which side will win, the bears or the bulls.
WASHINGTON (Reuters) – Industrial output rose at a slower pace in August and a measure of New York state business conditions slipped to the lowest level in more than a year, according to data on Wednesday that suggested the economy was cooling but not stalling.
This news is slightly contrary to the economic news recently released, but the ultimate judge, the market, seems to have deemed it ineffective. As of this writing, the major indices have shrugged off early losses and moved into the green. Perhaps it is because within that same report, the information below also appeared.
The survey showed employment continued to improve.
Perhaps, though, as you read further into the article, the market saw the following quote as an effective counter to the less-than-expected numbers from the manufacturing data.
“The Empire manufacturing index was slightly weaker-than-expected, but did not fall below the zero line, further diminishing concerns about a double dip,” said Jonathan Basile, an economist at Credit Suisse in New York.
Then again, as the news excerpt below demonstrates, perhaps it was the left jab in the forex market that mattered more.
Markets largely ignored the reports, focusing instead on developments on the foreign exchange markets, where the U.S. dollar jumped from a 15-year low against the yen on Wednesday after Japan intervened to sell the yen for the first time in six years.
These are wild economic times, and the outcome will not be decided on points – a knockout will determine the winner. Either the economy will find its groove and take out the double dippers, or it will falter and drop back into recession. In the meantime, though, we should expect punches and counter punches, and the market and analysts will judge the effectiveness of the hits. My money, though, is on the bulls, at least for the next round or two.
Trade in the day; invest in your life …
