Global Macro Perspectives
Negative tone added to the statement, making a rise in federal funds rate even more distant opportunity. FED Press Release. Economy improving, but the financial conditions less supportive because of developments abroad. Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually. […]
Equities With my 1,200 S&P 500 target reached I’ve moved to a kind of a ambiguous stance to the markets. Now I believe the equity markets are bound for a 10%+ down move at least. My mid-term view remains unchanged – this is just a bear market rally; U.S. and E.U. economies will experience same […]
Nothing major. FED Press Release. Economic activity picking up; Business spending improving; Construction spending not; Labor market beginning to improve. Information received since the Federal Open Market Committee met in March suggests that economic activity has continued to strengthen and that the labor market is beginning to improve. Growth in household spending has picked up […]
Equities Although I’m convinced that the economy is not pulling a V-shaped almost everywhere except in China and in their commodity based economy satellites I believe that in the short term the equity gains will continue. I have a 1200 S&P 500 target. I have only a small exposure to the markets (via a June […]
“Exceptionally Low Federal Funds Rate For Extended Period” still here; FED funds rate stays at 0%-0.25% in 9:1 vote with Kansas City Fed President Thomas Hoenig voting again against. Economic activity picking up; high unemployment; business spending is recovering; housing relapse: Information received since the Federal Open Market Committee met in January suggests that economic […]
Equities In the macro arena we have leading indicators rolling over, and a stream of worse-than-expected data pieces on U.S. housing, U.S. employment, U.S. durable goods ordered and large move lower by consumer confidence. Seems that the markets do not appreciate the data. Things that move the markets are only FED policy on rates, dollar […]
The important part: The FOMC continues to anticipate that economic conditions–including low rates of resource utilization, subdued inflation trends, and stable inflation expectations–are likely to warrant exceptionally low levels of the federal funds rate for an extended period. Full version.
Marvin King: It was at this press conference one year ago that I explained the asset purchase programme to you. That was at a time of sharply falling output and collapsing confidence. Since then, the position has improved considerably. Output has stabilised and confidence has recovered. The additional money created by the asset programme will […]
FED just released that the benchmark rate remains unchanged. The “extended period” is still here. Business conditions are improving but at subdued rate: Information received since the Federal Open Market Committee met in December suggests that economic activity has continued to strengthen and that the deterioration in the labor market is abating. Household spending is […]
The target rate remains the same; extended period phrase is here: The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels […]
Nothing new material in the statement. FED press release.
Higlihts:
Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales.
Optimism is a flavor of the day. Nice article by Bloomberg showing disparity between analysts and economists. Bloomberg link: Stocks Show Why Analysts Dismiss Economists on Growth. Not that I think that either of them will be right at the end of the day, but it’s interesting to look at the dilemmas the market is in. Its pretty obvious, given the run we had, no analyst wants to look like an idiot having bearish reports so they are chasing the market. On the other side you have economists who are analytical guys; who don’t want to believe that anything beside predicted by their models will happen and those prospects don’t look good. And we have also corporate insiders who are selling and companies that are issuing shares. Bloomberg link: Mobius Spurns Brazil Share Offers as Gol Seeks Sale. (disregard Mr. Mobius statements as he probably trades opposite his statements). Being skeptical and contrarian by nature the market looks overly optimistic to me, but given the sentiment it could go further higher.