07 Mar 2003 Uncertainty of War Likely Over Soon

The week’s economic releases were, to say the least, mixed.  The worst of it came this morning as the government reported that theU.S.economy lost 308,000 jobs.  Some of these losses are likely attributed to the call-up of reservists, but certainly not the majority. 

Companies tell economists and journalists that sluggish demand and the threat of war are prompting them to delay both investing and hiring.  Rightly or wrongly, the Iraqi war threat has become the scapegoat for many of our problems.  Yesterday, Petsmart, the specialty retailer for pets, blamed their earnings woes on “geopolitical risks.”  Caroline Baum of Bloomberg News wrote a humorous article on how popular it has become to blame the war.  Here’s the article if you are interested.

The good news is that the uncertainty of war with Iraq will apparently be behind us shortly.  More good news is that authorities are narrowing their search for Osama bin Laden and that they have captured his two sons.  The NASDAQ 100 rallied 1.5% immediately following the news on bin Laden this morning.  Markets will undoubtedly respond very favorably and for a sustained period or time to the resolution of both events.