Tag Archives: newsletter

  The Economy and the Stock Market As long time readers know, we are always paying close attention to the manufacturing sector, which is far more important to the US economy than is generally believed. In terms of gross output it is the largest sector of the economy, and it should of course be obvious that saving, investment and production are the only ways to create wealth. Contrary to what one often hears from...

The post contains the main-stream view on the Swiss National Bank. It is the “continued intervention pledge“. But seven years post the financial we are in the second part of the business cycle. In the second part, the SNB must fear rising inflation more than the ECB. See here or in the two phases of CHF appreciation. For us, Brexit has not influenced the main driver of global GDP growth, U.S. or European consumers....

This week we focus on the charts, we omit the technical explanations, given that Marc Chandler is currently on a two-weeks trip. The dollar was surprisingly strong this week. This despite a more hawkish ECB, bad U.S. economic data in the ISM surveys. Swiss Franc Currency Index The Swiss Franc index had a bad week with a bad Friday. The dollar index rose at the end. Swiss Franc Index Trade-weighted index Swiss...

Swiss Franc Speculators are reducing their net short Euro positions, since Draghi’s comments on inflation. Apparently not only against the dollar but also against the Swiss Franc. This also means that the euro zone may be target real money (like purchases of stocks, real estate and bonds) instead of Switzerland. This makes both European stocks and a Euro long FX position interesting. With a stronger euro, purchases...

Summary The IEA forecast that the surplus in global oil markets will last for longer than previously thought. Philippine President Duterte called for US troops to leave the southern island of Mindanao. Relations between Poland and the EU are deteriorating. Former head of Brazil’s lower house Eduardo Cunha was expelled and banned from public office for eight years. Brazil’s central bank cut the amount of daily...

Summary: Bonds are not rallying despite poor US data. Greater chance that Trump gets elected than the Fed hikes next week. Berlin may be more important than Bratislava. (Two week business trip is winding down, leaving London tomorrow and will be in Canada for the first couple days of next week, then back to NY.  Sporadic posts to continue. Thanks for your patience) Yellow lights are flashing. Bonds remain...

This simple two-step process would greatly diminish the Ministry of Propaganda’s influence. Here’s a radical idea: how about presenting the facts and letting voters decide who is “fit to serve”? Consider the context of this presidential election and the judgment call as to who is “fit to serve”: 2. Both the Republican and Democratic candidates have highly unfavorable ratings; they may well be the most disliked...

  Renewed Escalation This summer witnessed a renewed escalation between Russia and Ukraine after Russian President Vladimir Putin accused Ukraine of sending saboteurs to attack Russian troops, targeting “critical infrastructure”. Kiev denied the allegations and claimed Russia’s “fantasy” was nothing but a false pretense to launch a “new invasion”. But what does the media tell us about what has been happening in...

SMI The Swiss Market Index is set to finish the week notably weaker along with global equity markets as fears around global monetary policy hit sentiment ahead of key meetings by the Bank of Japan and US Federal Reserve next week. The SMI did manage to outperform its European peers thanks to its heavy weighting towards more defensive pharmaceuticals and consumer staples sectors.   Economic Data Global equity markets...

Strange diversion of conditional inflation forecasts: At the ECB Meeting Draghi expected inflation to rebound to 1.2% next year and 1.6% in 2018.The SNB, however, predicts 2017 inflation at 0.2% and 2018 at 0.6%. YoY CPI Inflation in Germany is at 0.4%, in France 0.3%, in Italy and Spain near or under zero. Switzerland sits on a real estate bubble that sooner or later will translate into rents and prices. Rents in...