Consistent Stand

The markets were waiting for a strong hit, which will navigate markets back into direction and the trend will defined by economic fundamentals; today the second major inflation indicator that has the focus was released at last...

The CPI data retained market calmness more or less and was not as investors hoped to acquire abnormal profits; yet on the other hand they provided the final touch to the American economy story.

Today data showed that Core prices on the consumer level in the month of July did not gain form the previous month coming in at 0.2% and 2.2% on the year. Meanwhile over all prices added 0.1% down form 0.2 percent in June affected by lower oil prices and transportation. The stability of core readings were an additional entry to the lost and forgotten petition that inflation in no longer a priority and should not be referred to as the predominant concern.

Despite that the data did not shake markets quite strong yet remains that the actual liquidity in the market and the fed contributing to the intervention seems more of a written confession that the sub-prime mortgages are of a predicament facing the federal government; one problem that needs to be addresses and by an induced rate cut in the US market.

With dragged tired growth levels which affected spending levels that the American economy has lived through since the first quarter of this year. All combined affected industrial production levels and the dollar's FX rates, yet that boosted exports from the greenback nation. We say the evidence in yesterday's report which affected inventories and helped production wheel to speed back up, as July's Industrial Production gained 0.3% from 0.5% previous while the capacity utilization inclined to 81.9% from 81.7 percent previous. While the NY Manufacturing Index for August fell to 25.1 slightly from 26.5, nevertheless expectations were much worse at 18.5.

Despite the comeback in the industrial sector which we see as a short to last spike, it will not help the falling economy on its own back on track; all are combined now to face a rate cut to be seen by the Fed. The question remains will their actually be a rate cut in the upcoming meeting?