每日市场点评 - Oct 31, 2007

Investors seem to get the treat they are waiting at this Halloween. As widely expected, the Fed cuts both discount rate and Fed fund rate by 25bps. However, in the statement they also mentioned that higher oil price will become an ongoing concern. In addition, it appears that the Fed may pause after this cut as the risk to economic slowdown and the risk to inflation are more balanced now. Just as oil becoming a concern for the Fed, it shot up by another $4 and reached a new historical high amid a bearish inventory report. As I mentioned previously, continuous bearish inventory trend may lead the commodity to $100 mark and now the chance is obviously increasing. The GDP report this morning shows that other than the housing sector, the economy is doing fine and it is very unlikely we are going to get a recession in the near term. Inside the market, sector performance is widely divided with the sectors more sensitive to interest rate lagging while tech stocks continue to lead. As we are entering November and it is historically a strong performing month for stocks, let\'s see whether we are going to get the fourth quarter rally many investors are hoping for. Happy Halloween!