2014/10/30 TrendView VIDEO: Global View (early)
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TrendView VIDEO ANALYSIS & OUTLOOK: Thursday, October 30, 2014 (early)
In the event the FOMC appears to have surprised to some degree with a shift not so much to a hawkish stance as a move that was more clearly neutral than what the markets expected. And if the initial damage to the equities looked minimal along with some weight on the post-QE3 govvies, things may not be as they appeared yesterday afternoon. The critical question now is whether the Fed has crossed a critical tipping point: Does their shift Wednesday move the equities from a ‘bad news is good news’ psychology to a ‘good news is bad news’ environment? On current form that appears to be the case.
Note not just the weakness of the European equities on their better-than-expected data this morning, but that extended sense of Wednesday’s Fed shift also left the December S&P 500 future slipping back from its 1,985 and 1,975-78 areas. Even though the latter was retested late yesterday, overnight it was trading off twelve dollars into the 1,960 area. And since the video analysis was recorded the release of US Advance (first look) Q-3 GDP showed a better-than-expected 3.50% gain (versus a 2.90% estimate.) Yet this has only engendered a five dollar bounce to the 1,965 area. Of course, whether ‘good news’ really is ‘bad news’ will be more so critical once it gets back down to the next lower supports in the 1,955-50 range (with that classical Tolerance to 1,945.)
In addition to all of the external geopolitical and economic influences, there is the conundrum of the mixed US economic indications that must be sorted out in a less accommodative Fed environment. In spite of sustained (yet somewhat below hoped for) employment gains, recent strong sentiment indications are countered by a second month in a row of weak US Durable Goods orders. And there’s a real contradiction in the recent surprisingly weak Retail Sales that was followed by Tuesday’s very strong US Consumer Confidence. After the massive recovery rally, it’s going to be very interesting from here.
Video Timeline: It begins with macro (i.e. fundamental influences) discussion of quite a few of the factors noted above. It also mentions the typical end of month economic data tsunami will continue to flow into tomorrow, yet with the FOMC shift still most prominent.
It moves to DECEMBER S&P 500 FUTURE short-term view at 02:30 and intermediate term at 06:00, then the OTHER EQUITIES from 08:15, with GOVVIES analysis beginning at 13:00 and SHORT MONEY FORWARDS at 17:40. FOREIGN EXCHANGE begins with the US DOLLAR INDEX at 21:15, jumping over to EUROPE at 23:20 and ASIA at 27:00, followed by the CROSS RATES at 30:15 and a return to DECEMBER S&P 500 FUTURE short term view at 33:45 for a final look and additional perspective. As this is an especially extensive analysis due to the need to include some discussion of the Fed’s shift, even more so than usual we suggest using the timeline cursor to access the analysis most relevant for you.
Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion and TrendView Video Analysis and General Update. Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion.