JANUARY 5,2005

Today was a pretty lackluster day. The economic stats, however continued to show strength in the U.S. in the form of strong auto sales, over 18mil units and the ISM Non-Mfg-Idx at a robust 63.1, whereas the Euro-Zone Services PMI was unchanged at a realitivley subdued 52.6.. True, the falling mortgage applications survey seems to coroborate the decline in new home sales we saw earlier. However none of these were market movers. The market is still repricing its overbought condition at year-end and grappling with the implications of weaker foreign economies and rate hikes at home

The President was pushing his tort reform pakage today. As you recall his election win kcik-started the rally that lasted into year-end. In my November missive I stated that I believed that the strong market reaction to his win , was strongly tied to his platform of tort reform, health care reform, and social security reform. they are all market friendly and very beneficial to big corporate and wall street. Much like most of his policies in his first term, they benefit everyone, but the big and rich most of all..

Now that the oil inventory figures are out of the way, the important news tommorrow will be intial claims for unemployment , possibly somewhat distorted by the holidays and of greater import, Walmarts guidance for same store sales in January. They have a though comparison.