Commentary: ‘Santa’ is already in town (redux)
But does that mean ‘Mr. Claus’
or someone else (or even others)?
© 2014 ROHR International, Inc. All International rights reserved.
COMMENTARY: Tuesday, November 25, 2014
This year is a bit different. We still believe that our long-standing views on the ‘Santa’ influence in the markets remains the same. Yet the plethora of blessings for the equities markets from multiple benefactors this year is very impressive. The natural tendency of ‘Santa Portfolio Manager’ to benefit others by applying any excess cash to purchases of well-regarded stocks in positive equities years will always remain. Yet as we have noted extensively of late, due to under performance of quite a few economies outside the US, other central banks are also attempting to add some stocking stuffers for (not so) needy equities investors’ profits this year.
There is of course Santa Super Mario, as the ECB finally gets the fiscally tight-fisted folks in the northern tier of the Euro-zone to allow much more extensive QE than anything which might have been imagined previous. Maybe the weakening of their economies finally set a few bells ringing. And the weak Chinese economy has finally shaken the Santa PBOC dragon out of its two year slumber. And the long term BoJ commitment to QE can hardly be questioned (other than to inquire whether it will ever work) in the wake of its recent acceleration of the program.
There’s also that “new (stimulus) sheriff in town” known as Crude Oil Crunch. We have noted in quite a few previous posts how lower production and transportation costs blended with some additional consumer discretionary spending (i.e. not paid out for heating or petrol) is a benefit to all global economies. So those natural tendencies of Santa Portfolio Manager are mightily reinforced this year. Now we just need to see how the markets respond to the economic weakness driving all that additional Quantitative Easing.
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2014/11/26 TrendView VIDEO: Concise Highlights (early)
2014/11/26 TrendView VIDEO: Concise Highlights (early)
© 2014 ROHR International, Inc. All International rights reserved.
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TrendView VIDEO ANALYSIS & OUTLOOK: Wednesday, November 26, 2014 (early)
MACRO INFLUENCE ALERT: Due to Thursday’s US Thanksgiving Day holiday, almost all end of month US data is jammed into today. However, there is still quite a bit of very important data from other centers throughout the balance of the week. That should make for a very interesting finish to the month on Friday. Due to Thanksgiving being a midweek holiday, all US markets have normal trading hours today, with Closes around 12:00 CST on shortened holiday hours Friday.
And regardless of the nature of the data, there are other important influences which have impacted the markets of late. As just one example, Monday morning’s Markit Triennial Survey was a negative shock. And Tuesday’s OECD Economic Outlook that was focused on Europe pointed up the reasons it was likely to remain weak in the near term, even if it agreed with the need for the ECB’s intensified Quantitative Easing program.
The entire report and full video presentation are available on OECD website. That very good (if lengthy at just under one hour) webcast recording of the discussion by OECD Chief Economist Catherine Mann is worth viewing. In fact, their analysis is easier viewing than reading. Most importantly, it highlights a very telling point for the global economy: the Euro-zone problem now is more so a lack of domestic demand than the previous lack of competitiveness. And in that it definitely supports ECB President Draghi’s current accelerated QE efforts.
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Video Timeline: It begins with macro (i.e. fundamental influences) discussion of a some of the factors noted above, including the weak PMI’s last week into early this week being countered by more upbeat German IFO data on Monday. Yet other data remains weak right into this morning, which continued with the major US data after the video recording was made. That included Initial Jobless Claims, Durable Goods Orders and Personal Income and Spending. We await Chicago PMI, Michigan Sentiment and New Home Sales.
It moves on to the DECEMBER S&P 500 FUTURE short-term trend view at 02:30 and intermediate term at 06:05, with OTHER EQUITIES from 08:15, and GOVVIES at 12:10 with SHORT MONEY FORWARDS at 18:25. FOREIGN EXCHANGE begins with the US DOLLAR INDEX at 22:00, and only mention of EUROPE and the JAPANESE YEN at 23:30 with AUD/USD being the one critical view at 24:20 followed by mention of the CROSS RATES at 26:00, and a return to DECEMBER S&P 500 FUTURE short term view at 26:30 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.
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