Weekly Recap 12/8/07

. The ISM's Index of Manufacturing Activity unexpectedly fell to 50.8 in November compared to October's 50.9.

. The ISM's Non-Manufacturing Index fell from 55.8 in October to 54.1 in November.

. The New Orders Index fell to 51.1 in November, a 4-1/2 year low.

. Productivity surged to 6.3% in the third quarter of 2007.

. Unit labor costs showed a 2% annual decline in the third quarter.

. U.S. Factory Orders rose by a strong 0.5% in October.

. Non-durable goods orders were up 1.3% in October.

. nonfarm payroll jobs report showed an increase by 94,000 jobs in November.

. Unemployment rate was at 4.7%.

. Michigan Consumer Sentiment Index fell to 74.5 from 76.1 , and second worst reading in the last 15 years.

. Consumer Credit increased at an annual rate of 2.3% in October, slightly faster than the previous month's gain of 1.6%.

Right now we are in a cycle of the stock market in which earnings and inflation are rising, while interest rates are falling. We are set up well technically for a move higher but the Fed has to cut rates aggressively to save the economy from recession. I think they will because the Bush is going to push Bernanke to do it. I don't care what they say in public, it's what happens behind closed doors that's relevant. Paulson, a smart market guy from Goldman Sachs is on the job (advising Bush). The President doesn't want to leave office with another negative on his record.

It will be a volatile next week, everything depends what happens on Tuesday.