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TrimTabs
- Press Release - Jul 28, 2004 Santa Rosa, CA - July 28, 2004 - Over the past 21 trading days, the market capitalization of all U.S.-based stocks has declined by $900 billion, or 5.3%, to $14.9 trillion from a peak of $15.8 trillion on June 24. "Conventional wisdom erroneously lays the blame on a slowing U.S. economy, particularly since the Democrats naturally use their convention to criticize the economy," states Charles Biderman, President of TrimTabs Investment Research. "We believe the real reason for the stock market's decline is simply pre-election jitters." Despite Weak Stock Prices, U.S. Economy Is Surging. Corporate Buying Is Outpacing Corporate Selling by $500 Million Daily and Individuals Are Pumping Another $500 Million Daily into U.S. Equity Funds. Regardless of the stock market's month-long decline before today's rally, corporate buying has been outpacing corporate selling by about $500 million daily, or a total of $10.5 billion over the 21 trading days since June 24. Furthermore, individual investors have pumped an estimated $500 million daily into U.S. equity funds, or a total of $10.5 billion, over the same period. In other words, about $1 billion daily has flowed into the checking accounts of stock market intermediaries since June 24. Underlying the surge in net corporate buying, wages and salaries rose nearly 6% year-over-year over the same period, which means that take-home pay -- assuming a 26% average withholding rate -- totaled $310 billion ($14.8 billion daily) over the past 21 days versus $283 billion ($13.5 billion daily) over the same 21 days last year. Growing Economy Will Eventually Ease Fears of Either Bush or Kerry Presidency: Stock Market Rally of 20+% Possible. Once the Democratic convention is over, Wall Street will forget its fears and concentrate on the growing piles of cash in the hands of companies and individuals. "Assuming the U.S. does not experience any major terrorist attacks, more money in the hands of stock market intermediaries and a declining trading float of shares will spark a significant stock market rally," according to Biderman. "Since most of the hedge fund world appears to be lightly invested these days, the rally could become incendiary if hedge funds decide to go fully long at the same time." #
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