April 17, 2005

THERE'S NEVER A BAD TIME TO DITCH COMMODITIES:

Moody market flummoxes Wall Street (MEG RICHARDS, April 17, 2005, ASSOCIATED PRESS)

In the span of only a few days, Wall Street went from worrying about accelerating inflation and higher interest rates to fretting over deteriorating profits and the specter of a possible economic slowdown.

The resulting gyrations in stocks have puzzled even some professional investors. They also have many analysts predicting a shift in investing trends, away from commodity-driven issues toward less-loved areas of the market, such as health care and consumer staples-- the least-damaged sectors over the last week.

"The shift from a cyclical, almost inflation-driven mindset to one that is defensive with slower growth has put the commodity producers in the leadership role to the downside," said Ned Riley, chief investment officer of Riley Asset Management in Boston. "That masks the fact that the companies with more stable growth, that are less dependent on price increases, are going to eventually be the market's new leadership."


Pretty hard to maintain an inflation-driven mindset for too long when there's no inflation.

Posted by Orrin Judd at April 17, 2005 6:30 AM
Comments

When the Fed keeps rates artificially high, it is hard to keep a bull market around.

Posted by: bart at April 17, 2005 2:25 PM
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