Tuesday, September 20, 2005

The New Hitchcock: Greenspan Has Market on Edge

Caution ahead of the Federal Reserve's decision on interest rates this afternoon and a bevy of Hurricane Katrina-related profit warnings kept stocks in suspense mode.

Many have called on Fed Chairman Alan Greenspan and the team to take a break in its plan to steadily raise rates because of the damage caused by Hurricane Katrina.


I think not.

Some traders said that the approach of Rita gives the FOMC even more reason to pause.

But if the Fed were to keep rates steady today, it wouldn't end up stimulating the economy until next year, when growth could already be rebounding because of rebuilding efforts, say some experts.

In other news, Best Buy missed earnings this morning -- we put a Buy Rating on the stock last week after the retailer was clobbered for lowering guidance.

The bears are forgetting that Best Buy the company is not the same thing as Best Buy the piece of paper it trades on.

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