Global Macro Perspectives
In the last month global economic outlook has improved a bit. In U.S. we can see some signs of retail sales and manufacturing activity growing at soft rates, but growing; at the same time employment, housing, construction spending, durable goods orders are stagnating. Recent fall in initial jobless claims has to be confirmed this week as […]
The newspaper with the best track record on guessing (or maybe pre-announcing) FED policy changes reports that the QE 2 size will be smaller than market expects. The central bank is likely to unveil a program of U.S. Treasury bond purchases worth a few hundred billion dollars over several months, a measured approach in contrast to purchases of […]
Nothing special here, FOMC is determinate to provide further monetary stimulus by purchasing longer-dated treasuries. The question which they debated on is whether to provide these measures in case the speed of growth doesn’t pick up or in case the economic condition worsen. My take is, I would not bet that they will announce asset buying programe during November meeting, and […]
This months strategy is a little bit late because your favorite blogger is feeling (a bit) nihilistic in the last weeks. We have had a nice run in September in almost all asset classes. Reasons: recent economic data is not deteriorating as fast as feared and the central bankers determination to extend monetary stimulus is stronger […]
They admitted only that the pace of recovery has slowed in recent months and introduced a hint of additional measures. Like I expected only the weakening economic activity is not fully addressed. Unexpectedly a fear of deflation and a will to fight it is introduced into statement (in two instances), in my view completely off the mark. The main […]
Equities Economic data released in recent month or so is on a absolute and relative basis weak. The difference from July is that the consensus has moved downwards, so the markets focuses on comparing actual data with consensus and disregarding absolute levels. But we are here to earn some money, not waste our time on […]
And we have QE 1.1. Lite. Direct monetization. Basic money printing. I’m surprised FED reacted so fast. To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities […]
We have a slow day today with no economic data in the U.S. Europe is trading on average up 1.5%, U.S. futures are up 0.3%, so it looks U.S. markets are not going to follow European lead. Sell side macro economists are following Goldman’s (brilliant) Jan Hatzius lead and reducing GDP growth both for second half of 2010 and […]
Equities Economic data released in recent month or so is dominated by bellow consensus readings and on absolute level pointing to only marginal and slowing growth. Consumer demand proxies point to deceasing level of consumer demand. Unemployment is high and it is not falling. The government stimulus is wearing off. But the market is rising despite all of that […]
The big news point of the day is a newly discovered 346 tons of gold on Bank for International Settlements (BIS) balance sheet. The information can be found in a footnote in the BIS’s annual report. Page 163. Included in “Gold bars held at central banks” is SDR8,160.1 million (346 tonnes) (2009: nil) of gold, which theBank held in connection […]
Almost unchanged from June. Equities Only extremely favorable economic data could change the negative trend established. This is highly unlikely. So I would say we will soon see S&P 500 at 875. On a macro level, the stimulus is wearing off, politicians and central bankers are not ready to continue with loose fiscal an monetary policies, just the opposite, austerity is the game. […]
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 […]