Calling Their Bluff

Profit from the Pros Calling Their Bluff In the last commentary we talked about the "Game of Chicken" being played between investors and the Fed over the possibility of raising rates. There is a new chapter to add to the saga. First the backdrop. For the past week it seemed that the Fed's table pounding to raise rates was gaining momentum as the 10 year Treasury rallied from 1.69% to 1.78%. However, on Friday investors got the upper hand back. This came in the form of two weak economic reports starting with Consumer Sentiment laying an egg with its fourth straight month of decline to a reading well below expectations at 89.7. In particular, the forward looking expectations component stands at 79.6. Remember that under 100 is considered negative... and this is way under. This data corresponds with the current weakness found in retail sales. Next up was another poor showing for Industrial Production at -0.6% calling recent signs of manufacturing sector progress into question. When you add these two reports together you understand why the outlook for the economy is still cloudy and why the 10 year started heading south again as this is another reason for the Fed not to raise rates. The key question at this time is how much more investors can cheer bad economic news just because it keeps the Fed from raising rates? The Goldlilocks scenario would be 1-2% GDP growth. Just low enough to keep the Fed on the sidelines and just high enough to produce earnings growth and higher share prices. Best, Steve Reitmeister Executive Vice President, Zacks Investment Research Sponsor [Could this "fountain of youth" stock become your "river of gold?"] Thanks to an astounding technological breakthrough, a 125 year lifespan is now within reach. And one legendary growth investor is "doubling down" on the company that is trying to bottle this "fountain of youth." [Click here to see why this investing legend is so excited about this stock.] [China Stock Roundup: Alibaba Acquires Controlling Stake in Lazada for $1B, LightInTheBox Beats] Markets enjoyed a week of strong gains following a series of encouraging economic reports. [Read More »] [Fed is Bluffing on Rate Hikes] Should you listen to the doves, the hawks, or the real-money interest rate markets? [Read More »] [Bank Stock Roundup: All About Q1 Earnings - JPMorgan, BofA in Focus] Over the last five trading days, Q1 earnings took precedence, with all eyes turning to the banks' performance. [Read More »] [5 Top Performing Best-Ranked Mutual Funds in Q1] A strong rebound in the second half of the first quarter helped most of the major benchmarks to finish the January-March period in the green. [Read More »] [What Awaits These Mega Stocks This Earnings Season?] Earnings performance of Pepsico, IBM, Morgan Stanley and Netflix is always a matter of keen interest for investors. [Read More »] Sponsor [Low-Priced Stocks with Sky-High Potential] Zacks is now revealing its most exciting stocks. Priced under $10 per share, these companies have outstanding prospects for long-term gains of 2X, 3X, and even more. Why are these select "Under $10s" so much more promising than others you may find? Vastly improving outlooks for earnings growth plus other Zacks indicators tell us which stocks are primed for early movement. They also give us confidence to ride the stocks long and high while other investors jump off for lesser profits. [See Zacks' Best Stocks Under $10 Now >>] [Bull of the Day: Canadian National Railway (CNI)] After a period of weakness, the growth story for this company might be on track again as estimates have been rising. [Read More »] [Bear of the Day: Archer Daniels Midland (ADM)] If you are looking to harvest gains this earnings season, then you might want to avoid this low-ranked stock. [Read More »] [Customize Your Profit from the Pros Delivery] Connect with Us: [Facebook] [Twitter] [StockTwits] Contact Info: Phone: 1.800.767.3771 ext. 9339 Email: [support@zacks.com] [Terms] | [Privacy] | [Unsubscribe] [Zacks] You are registered to receive this "Profit From The Pros" e-mail newsletter at {EMAIL}