2016/01/07 Commentary: Meltdown Time? (early)
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Extended Trend Assessments reserved for Gold and Platinum Subscribers
COMMENTARY (Non-Video): Thursday, January 7, 2016
Meltdown Time?
Even if not as bad as all that, the tripartite confluence of impacts from different areas conspires against any upbeat expectation for the global economies and equities markets. Those include still weak data that we are surprised anybody else is surprised to see. We have been highlighting the atypically downbeat expectations from the typically more upbeat OECD (Organization for Economic cooperation and Development) for many months.
That is especially pernicious regarding weak world trade that OECD Secretary General Angel Gurria highlighted as only weakening to the current degree five times over the past 50 years. And in each instance it coincided with a marked downturn in global growth. (More on our analysis which includes that below ‘Read more’.)
And then there is the Fed. It is not necessarily a mistake for the Fed to want to get back to ‘normal’. That includes pushing up the US base rate from the ZIRP (Zero Interest Rate Policy) ultra-low yields. However, we are not the only ones who have questioned whether the FOMC might have missed the rate hike window back in late 2014. If the economic cycle was already turning down into this period, the current rate hike attempt might be misguided. Is this just the Fed’s ‘Normalcy Bias’? (More on that below as well.)
The last factor is the geopolitical disarray stemming to some degree from US President Obama’s weak US foreign policy stance. We discussed that in Monday’s Commentary: Special Alert, and refer you back to that for more details. Suffice to say that the real problem is that these factors seem to be sustained now.
[NOTE: We are providing this brief Commentary: Meltdown Time? in lieu of a full TrendView Global View video analysis this morning in order to provide a more fully articulated technical trend view once the dust has settled after today’s US Close. That will be accessible prior to tomorrow’s US Employment report to provide the most current views before the last critical macro influence this week.]
Authorized Silver and Sterling Subscribers click ‘Read more…’ (below) to access the balance of the opening discussion. Non-subscribers click the top menu Subscription Echelons & Fees tab to review your options and join us. Authorized Gold and Platinum Subscribers click ‘Read more…’ (below) to also access the extended trend assessment as well.
2016/01/05 TrendView VIDEO: Global View (early)
2016/01/05 TrendView VIDEO: Global View (early)
© 2016 ROHR International, Inc. All International rights reserved.
The analysis videos are reserved for Gold and Platinum Subscribers
TrendView VIDEO ANALYSIS & OUTLOOK: Tuesday, January 5, 2016 (early)
As noted in Monday morning’s Special Alert Commentary post, the immediate exacerbation of what was likely to be a negative start to 2016 would seem to be driven by geopolitical events. As such, even the equities weakness which might have been the case in any event Monday morning on the back of weaker than expected economic data was that much greater due to the disarray in the Middle East. This has two immediate implications.
The first is that things cooling down in the Middle East might relieve some of the pressure on equities (and remove a bit of the bid from the govvies.) The technical implication is also important insofar as neither the US equities nor especially the Chinese equities have broken key support levels. The weakness of the Chinese Manufacturing PMI has indeed reinforced our overall bearish view for this year, Yet, the Shanghai Composite Index which was up from a low of 2,850 back in August only dropped back from recent highs near 3,700 to the 3,200 area prior to recovering a bit today. Hardly an implosion.
Without being too political about it, the current Middle East situation is the extension of the Obama administration’s very weak US foreign policy stance. We had more to say about that in Monday’s post, and refer you back to it for that brief further comment.
On the economic front we were very clear through all of last year that major headwinds were brewing for the global economy and equities (along with those being reasons to still see resilient primary bond markets.) We will touch on the key aspects again below.
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Video Timeline: It begins with macro (i.e. fundamental influences) mention of aspects noted above, and the degree to which data generally weakened into the end of 2015. That was especially so for US housing, which had been a previous source of strength. It also notes weakness in other Manufacturing PMI’s, most importantly in the UK and US, along with the still critical nature of other influences this week. Those include Wednesday’s Services PMI’s and FOMC minutes release along with Friday’s US Employment report.
It moves on to S&P 500 FUTURE short-term at 03:15 and intermediate term view at 07:00, OTHER EQUITIES from 09:00, GOVVIES beginning at 13:00 (with the BUND FUTURE at 16:30) and SHORT MONEY FORWARDS from 19:15. FOREIGN EXCHANGE covers the US DOLLAR INDEX at 22:45, EUROPE at 24:15 and ASIA at 26:45, followed by the CROSS RATES at 28:15 and a return to S&P 500 FUTURE short term view at 30:15. We suggest using the timeline cursor to access the analysis most relevant for you.
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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.
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