2014/12/16 TrendView VIDEO: Concise Highlights (early)
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TrendView VIDEO ANALYSIS & OUTLOOK: Tuesday, December 16, 2014 (early)
Concise Highlights
As we have stressed since last Friday, the equities weakness no longer seems like a replay of the 1997 Asian Contagion. That was the phase where emerging Asian economy problems caused what proved to be very temporary dislocations in developed economy equity markets. Yet it is now looking like the US equities are indeed in more than just a bit of trouble on weak external influences. This gets back to ‘macro’ consideration that global ‘delinking’ has been debunked. (That was a consideration as China outperformed developed economies after the 2008 financial crisis.) Nothing drives that point home better than the spillover from the Russian ruble weakness into more downbeat perceptions for the global economy.
And once again for the record, the integrated global economy is always ‘linked’, even if the leads and lags can be masked by regional and country differences. It is the classical tendency for the US economy to lead the way with Europe in tow. While no longer as clear, it was the reason US long yields would push up while the German yields would remain soft coming out of a recession. Is there any doubt the ‘linked’ weakness of Europe, and now Asia, are restraining US rates? That tendency has infected equities from last week.
That is likely more justified now than other instances like 1997. The world has become more economically integrated, and is experiencing some serious dislocations of late. While we have been very pointed that the Crude Oil weakness is not the primary culprit behind the recent equities concern over economics, it does play a significant role. More so than in 1997 the future lack of demand for imports into cash strapped oil producing countries with weakening currencies is a reasonable concern. How many Mercedes (or even sausages) will Russians be buying from Germany next year? CNBC’s Steve Liesman provided a rough estimate that Russian salaries had gone from $13,000 to $5,500 (US.)
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Video Timeline: It begins with macro (i.e. fundamental influences) discussion of some of the factors noted above, along with the pervasive weakness of last week’s economic data except for Thursday’s constructive US Retail Sales and Friday’s Michigan Sentiment. This week’s data has also still been weak out of Asia and better elsewhere (including strong US Industrial Production), but has been overtaken by the importance of Russian weakness.
It moves on to the DECEMBER S&P 500 FUTURE short-term trend view at 02:40 and intermediate term at 05:40, with OTHER EQUITIES from 08:00 and GOVVIES at 13:00 with only mention of SHORT MONEY FORWARDS at 17:00. FOREIGN EXCHANGE begins with the US DOLLAR INDEX at 17:40 followed by only mention of EUROPE AT 19:15 and ASIA at 19:50 prior to returning to the DECEMBER S&P 500 FUTURE short term view at 20:40 for a final look and additional perspective.
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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.
2014/12/17 TrendView VIDEO: Global View (early)
2014/12/17 TrendView VIDEO: Global View (early)
© 2014 ROHR International, Inc. All International rights reserved.
The analysis videos are reserved for Gold and Platinum Subscribers
TrendView VIDEO ANALYSIS & OUTLOOK: Wednesday, December 17, 2014 (early)
It’s another ‘FOMC Wonderful Wednesday’. Whatever the various markets think about the impact of Crude Oil on its exporters’ economies and the exports of the developed world into those economies, there is a bit of contagion in the air. The question is whether that will have a sustained impact on the developed economies, or is it a glancing blow that can be reversed once any sense of financial market contagion is addressed? One aspect which has defused a bit of the ‘risk off’ crisis atmosphere today is Russia’s Finance Ministry finally throwing some currency reserves at stabilizing the ruble.
One of the big questions in recent days has been why the Russian central bank only tried a massive rate hike to stabilize the currency into an already weak economy. That just doesn’t work. Didn’t anyone in Russia study the UK attempt to keep Sterling in the ERM back in 1992? A major UK rate hike in September of that year was viewed as just as unsustainable, and therefore had as little influence in supporting the currency. Whether one agrees with it in principle or not, currency intervention only works if it involves purchases which at least temporarily burn the bears. That’s it.
And the stabilization of the ruble is a significant development, including whether or not it sticks. It gets back to ‘macro’ consideration that global ‘delinking’ has been debunked. (That was a consideration as China outperformed developed economies after the 2008 financial crisis.) Nothing drives that point home better than the spillover from the Russian ruble weakness into more downbeat perceptions for the global economy.
While we have been very pointed that the Crude Oil weakness is not the primary culprit behind the recent equities concern over economics, it does play a significant role. More so than in 1997 the future lack of demand for imports into cash strapped oil producing countries with weakening currencies is a reasonable concern. How many Mercedes (or even sausages) will Russians be buying from Germany next year? CNBC’s Steve Liesman provided a rough estimate that Russian salaries had gone from $13,000 to $5,500 (US.)
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Video Timeline: It begins with macro (i.e. fundamental influences) discussion of some of the factors noted above, along with the importance of the dovish BoE Meeting Minutes into the weak UK Employment numbers this morning. It obviously also reviews just how important this afternoon’s FOMC statement and press conference are going to be.
It moves to MARCH S&P 500 FUTURE short-term view at 03:30 and intermediate term at 06:00, then the OTHER EQUITIES from 08:00, with GOVVIES analysis beginning at 12:20 and SHORT MONEY FORWARDS at 17:10. FOREIGN EXCHANGE begins with the US DOLLAR INDEX at 19:30, jumping over to EUROPE at 21:30 and ASIA at 24:30, followed by the CROSS RATES at 29:00 and a return to MARCH S&P 500 FUTURE short term view at 31:50 for a final look and additional perspective. As this is an especially extensive analysis due to the need to explore current broad macro factors, even more so than usual 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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