The latest wild card in the inflation picture is the price of oil which has been climbing steadily over the last few days. This will counter the perception that inflation is tamed, and may fuel fears that the FED is not done raising interest rates. Tomorrow's CPI number is viewed as critical in the overall inflation picture. All of this micro investigating of every number that comes out on the economy is all leading up to the FOMC meeting at the end of next week. We believe that it really doesn't matter.
Stocks are still cheap and there is plenty of time to participate.
The market was quite soft early today and came back after Alan Greenspan's mid day speech on productivity. If the CPI numbers come out soft tomorrow we should have an upward bias for the remainder of the week, but no major breakout until after next week's Fed meeting. We promised you that we would have an update. Based on our conversation with management yesterday we are becoming more convinced that patience will pay off in this situation. Last week's news release concerning the new relationship with Red Tag represents their entry in the B to B business arena.