http://www.theage.com.au/business/doubt ... -g96o.htmlEQUITIES traders are looking for solid signs of economic activity in the US. Weak economic figures have raised suspicions that data for the first half of the year could have been distorted by the Government's stimulus measures.
Wall Street's main indices closed 0.5 per cent lower on Friday after durable goods and new home sales figures came in lower than analysts expected. The news caused equities traders to question the strength of economic recovery in the US.
The ASX/S&P 200 Index yesterday closed 35.9 points, or 0.8 per cent, lower at 4677.4, though this still left it 3.6 per cent higher than at the start of the month.
Credit Suisse economist Damien Boey said North American investors were also anxious about the Federal Reserve's coming decision on whether to keep printing money, or withdraw stimulus measures.
''The fact that there is division in the Fed on this issue is causing people to get a bit nervous and take profits,'' he said. ''People are thinking, 'If [economic data] is all [due to] government stimulus, and it could all be withdrawn tomorrow, maybe stocks are overbought'.''
We are doing OK due to very prompt stimulus action here and in China and the bank guarantee but could still see a double-dip recession if the US economy slumps again. India is going pretty strong but can that continue without the US picking up?
This recession is not yet over, folks!