Friday , November 1 2024
Home / Tag Archives: Featured (page 1494)

Tag Archives: Featured

AIIB Launched, but Threat to Dollar Exaggerated

The China-sponsored Asian Infrastructure Investment Bank was formally launched over the weekend.  Many observers have seen it as a rival to the World Bank.  Others saw in another vehicle that would be used to facilitate the internationalization of the Chinese yuan.  We have consistently argued that these ideas are a serious exaggeration. News that AIIB will lend only US dollars supports our claim.  It seemed obvious that most members would fund their quota in dollars.  It also seemed...

Read More »

Collective Sigh of Relief in Capital Markets or Turnaround Tuesday?

The relentless pounding that investors suffered in the first two weeks of the year has subsided.  It is too early to have much confidence that a turn is at hand.  By various measures, the sell-off had stretched the technical condition.     In any event, the stability of the yuan, gains in the Chinese stocks, and a bounce in oil prices appears to be giving the bears a day off.  Chinese economic data (Q4 GDP, retail sales, industrial output, and fixed asset investment were a little softer...

Read More »

Emerging Markets: Week Ahead Preview

EM ended last week on a sour note. The most important factor for global risk appetite has become China, with the Fed tightening cycle now on the back burner.  Our base case remains that China muddles through, but policymakers there need to communicate better with the markets.  The PBOC fix and Chinese equity market performance will likely be the biggest drivers for global markets this week.  Commodity prices continue to slide, with oil and copper making new cycle lows last week and...

Read More »

Trying to Get One’s Bearings

The market is trying to get its bearings today. The large decline in the US equities before the weekend has had modest spillover effects elsewhere.  Equity markets, barring the Shanghai and Shenzhen Composites, are mostly modestly lower.  The MSCI Asia-Pacific Index is off about 1% while the Dow Jones Stoxx 600 is less than 0.5% lower in late-London morning turnover.   Iranian oil sanctions were lifted.  Oil prices are off a little more than 1% today, with Brent and WTI briefly slipped...

Read More »

The Bull Market in Stocks May Be Done

It has come to my attention that, perhaps, the great stock bull market is done. To most people, a bull market is good, and its end is bad. After all, a rising market signifies a healthy economy. Investors are making money. And it seems to prove that the free market is validated, able to deliver miracles despite Obamacare. Share prices are connected to business productivity, aren’t they? In a free market they are, of course. However—and this cannot be said too often—we don’t have a free...

Read More »

Won’t Get Fooled Again, Report 17 Jan, 2016

There is a great lyric in Won’t Get Fooled Again by The Who: Then I’ll get on my knees and prayWe don’t get fooled again Remember last week, when the price of silver spiked? On Thursday that week, the price was moving sideways around $14. Then around 5am (Arizona time), the price began to rise. Before 11am, it had hit $14.38. And then it was all over. The price went downhill from there, the rest of the day and all day Friday. It closed at $13.93. The same thing happened this Thursday, with...

Read More »

Week Ahead: What Will It Take to Stabilize the Capital Markets?

Two weeks into the year and most investors are nursing sizable drawdowns.  The recovery in the US equities on January 14 looked like a potential turning point. However, the coattails proved non-existent, and the bull trap was sprung with new downside momentum established before the weekend. The obvious takeaway is that the current driver is not to be found in New York.   And to be sure, we are not just talking about equities, but during this market meltdown, correlations between various...

Read More »

Speculators Boosted Long Yen Positions, but Mostly Continued Trimming Exposures

Speculative activity in the CME currency futures picked up in the latest reporting period. There were six significant gross position adjustments, which in our work is more than 10k contracts.   The gross short speculative euro position was reduced by 17.9k contracts, leaving 209.6k. Since early December, 53k gross short euro contracts were covered.  During the same time, about 17k gross long contracts were added.   Speculators stayed long the yen for the second consecutive week, and...

Read More »

Outlook for the Dollar: Dissecting the Bull

The US dollar remains strong against most currencies.  The exceptions are the Japanese yen, Swiss franc and euro though the franc and euro pulled back in the US afternoon before the weekend.  The greenback is still appreciating on a trade-weighted basis, which is the metric that counts in assessing its impact on the overall economy.   The euro, yen and franc strength is not as is often portrayed as some kind of safe haven that is flocked to in turbulent times.  Rather those currencies...

Read More »

The Market’s Bad Omens mount as the Black Swan population grows!

Last week’s market action confirmed clearly its corrective trend. I cannot say more than that, because when systematic risk kicks in the good, the bad, and the ugly all suffer the same slippery fate. Clearly it prophecies a healthy renewal once this bear trend is over, but first this downward phase has to be over-done before there is a capitulation that would signal a key reversal. For now, there is not much to expect. As the market is in the grip of a profit recession on the one side, and...

Read More »