|Filed Under:||Business & Finance / Investing|
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|Archived Since:||February 23, 2011|
There are times when the market needs to catch its breath after a strong run to adjust to a changing macro environment—this is one of those times. Last year’s near 30% run in the S&P 500 was sure to be a tough act to follow with the end of QE and the prospect of Fed rate hikes coming closer into view.
I’ve been around a long time, through many economic and market cycles, and I don’t recall a time when the bull/bear debate had such strong arguments on both sides.
Gold prices fell to a one-week low at $1232.55 per ounce on Friday in London as safe haven demand was eroded after a rebound in US equities and a strengthening dollar.
Earnings remain front and center in today’s session, with positive results from a number of industry leaders helping boost investor confidence. Hard to tell whether the mood will last through the entire session or not, but markets made a very strong open.
Thus far, the European Central Bank (ECB) remains the only one of the world’s major central banks that has resisted QE in the wake of the global financial crisis. That hasn’t been a matter of prudence— it has been a matter of policy paralysis in the European Union...
How the markets behave in the coming weeks will go a long way to help determine if the September-October correction was the start of a new bear market or just a normal correction in a bull market...
EM economies ex-China are slowing to a “new, normal growth” phase, which will keep bulks and base metals under pressure this year and next. These economies join China in a broad-based EM slow-down, which will increase...
Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. This committee statement is about as close as they get to identifying their method.
The number of active rigs drilling for oil and gas fell by their most in two months, according to the latest data from oil services firm Baker Hughes. There were 19 oil rigs that were removed from operation as of Oct. 17, compared to the prior week.
There has been much talk of globalization and the interdependence that has flowed from it. There is clearly much truth in arguing that what happens in one part of the world affects the rest. But that simply was not evident.
China's GDP growth is gradually slowing as expected - at least according to the official reports. Growth is now at the lowest level since 2009, but so far the Bloomberg China GDP Tracker forecast of a sharp correction this quarter has not materialized.
Favorable looking headlines from China and Europe and a mixed batch of earnings reports provide the backdrop for today’s trading action. The GDP report out of China shows that country’s growth falling to its level in years, but it nevertheless came in better than expected.
In the United States, if we hold a referendum, so voters may speak directly and decisively on a question, it always is at the state level, and, lately, most often addresses the legality of gay marriage, the decriminalization of marijuana, getting tough on illegal immigrants, or some other grave matter.
It would be logical to think that the emergence of ISIL would have increased oil prices, but Brent crude oil prices have plummeted since July. Having now traded as low as $83 per barrel, oil is at its lowest price since 2012.
Friday’s strong finish to last week’s extremely volatile session may not be the end of the market’s weak run. We must add, however, that this morning’s weak indicated open isn’t directly related to the issues that weighed on stocks last week.
An interesting article on MarketWatch today caught my attention. The subhead is the money quote, “Back in April every economist in a survey thought yields would rise. Guess what they did next.”
The drop in U.S. bond yields is perhaps the biggest surprise for investors this year. The gradual decline in Federal Reserve buying, faster growth, and the prospects for a rate hike in 2015 were expected to lift bond yields.
As quantitative easing comes to an end (apparently) by the Fed and is taken up by the European Central Bank (ECB), let’s compare the behavior of nominal domestic demand in each central bank’s economy and venture a reason for any differences.
After last week’s tumultuous markets one of my clients sent me an email saying “I am so relieved your constant talk about worsening imbalances kept us from getting too complacent. Things really are as bad as you keep saying.”
Last Wednesday, the markets reversed course after experiencing a long-awaited 10% correction from their September highs. The consensus view seems to be that this was a healthy and much-needed correction, and not the beginning of a new bear market...