For the past 7 years we've listened to the so-called "experts" bemoan the "extraordinary" Fed policies. They called them dangerous, untested, experimental. Now all of a sudden there is a change of heart? Don't raise the rate?? It is too risky?? It would be irresponsible and dangerous?? The markets and the economy couldn't possibly bear an interest rate above 1/8 of a percent?? The [...]
Top News Headlines Whipsaw market in full effect. Stocks stage a bounce-back, at least temporarily. The VIX Index is still at 26. Crude oil up over 10% for the week; biggest weekly gain in 6 years. Sanders, Trump ride anti-establishment wave. Fed rate cut to be delayed? Alaska's Mount McKinley to be renamed Denali. Random Thought Of The Week Is China [...]
August 28, 2015
Here is a small piece from our strategic macro research partner, MRB, on what some may have missed in the People's Bank of China move Tuesday. Yes rates and reserve requirements were cut to combat the tightness in financial markets stemming from a combination of lower nominal growth and higher expected future cost of capital. But the central bank also [...]
Has the much-anticipated correction finally arrived? After trading within a range of 150 or so points, the S&P 500 Index (IVV) just fell off a cliff in the last week, decisively breaking the 200-day moving average as well as the psychologically important 2000 level. The S&P 500 is now down 2.89% year-to-date. The EMU Index ((EZU)), or the European Economic [...]
The volatility and negative price movement in capital markets this week is a symptom of a money system void of principle. The morally bankrupt system ignores the demand for money and just supplies it at continually cheaper levels. Unfortunately, the recipients of the cheap money are not inclined to use it for productive purposes. Idle cash, disruptive capital flows, and the [...]
The S&P 500 Index ((IVV)) zig-zagged with no certain direction for the first part of the year, gaining just under 3% during this somewhat volatile period. The index now finds itself in a wedge pattern that will resolve itself only with a big move in one direction or another. If it's to the downside, we might finally be in the midst of [...]
Are we going to get the 10-20% pull back in stocks that, it seems, everyone in the investing world is calling for? Given the anxiety and market volatility surrounding the Chinese currency devaluation, one might have thought again that this was the week for the long awaited correction. Well, SPY closed at 207.95 on 8/7 and 209.42 on 8/14 a [...]
The S&P 500 Cap-Weighted Index ((IVV)) held support at the 200-day moving average (at least temporarily) after failing to get back above the 2120 level last week. The index has been straddling between the 50-day and the 200-day moving average for some time now. The S&P 500 is up 2.17% for the year. The S&P 500 Equal-Weighted index ((RSP)) is [...]
US monetary policy is the major driver of the global cost of capital. As a Fed rate cycle approaches, we see the effects of raising required returns across the globe. The increased volatility is a reflection of investors' changing return requirements, risk assessments and the associated unwinding of leveraged exposure. As we approach the anticipated Fed rate hike, look for he [...]
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