There was no main theme during the last week as the global financial markets try to measure Chinese growth while attempting to weigh the impact of a FED tapering of its quantitative easing program (QE). There is a continual to and fro as the equity markets are holding up well in the face of rising long-term interest rates, but as I have maintained, the yield curves are steepening as investors understand that the FED may be tapering but it is not tightening. This is not 1994. With this in mind let us examine some other issues.
Posts Tagged ‘PEMEX’
Notes From Underground: I Report The Body Of News Electric
August 11, 2013Notes From Underground: Tomorrow Brings More Bernanke, But First A Word From Hilsenrath
July 16, 2013The financial world waits for Ben Bernanke’s testimony to the House Financial Services Committee. (The written speech will be made available at 7:30 a.m. CST, 90 minutes prior to the start of testimony.) This is a new policy so as to preempt any leakage by the notorious inside trading group that resides within the bowels of a non-regulated legislature. (Of course, high frequency trading groups will have it two seconds earlier. What are campaign contributions for?) The prepared text will be plain vanilla and any possible market moving news will come during the Q&A. It would be a great surprise if Chairman Bernanke reveals any new wrinkles on FED policy for another bout of veering from the FOMC minutes would begin to undermine the FED‘s credibility.
Notes From Underground: This Market Is a Tribute to Rudyard Kipling’s “IF”
June 25, 2013“If you can keep your head when all about you
Are losing theirs and blaming it on you”
The opening stanza of Kipling’s poem about British stoutness is not to say others are blaming but rather an admonition from Notes From Underground about keeping your wits about you and trying to make quality decisions in trying times. In a financial world that is steeped in excess leverage, nanoseconds and algorithmic trading programs ,being a fundamental/technical trader seeking relative value becomes a daunting task. I am not one who favors catching “falling pianos” and have been more content to let trades come to make rather than force the action. As the markets unwind leveraged trades that causes massive selling across all asset classes.
Notes From Underground: Friday Is the All-Important U.S. Employment Data, But Why Was European Employment Glossed Over?
March 7, 2013The February jobs data has been compiled and is now ready for public consumption. The consensus is for 165,000 (revised upward from 160,000) nonfarm payroll jobs being added and the rate to hold steady at 7.9%. This may be a difficult number to trade because the equity markets have already sloughed off so much negative news to keep the rally in tact–Italian elections, sequestration and economic malaise throughout Europe. The weekly jobless claims numbers have surprised on the downside during the last few weeks so a 200,000 NFP number would not be a surprise. It will be more important to watch average hourly earnings and the length of the work week–earnings are expected to be up by 0.2% per hour.
Notes From Underground: Will Big Ben Turn Back The Hands Of Time?
December 11, 2012The FOMC will release the results of two days of policy deliberations at 11:30 a.m. CST Wednesday and the market is convinced that the Bernanke FED will vote to end Operation Twist but increase FED Treasury purchases. It may not be the full $45 billion but something above $25 billion, which would be in addition to the already promised purchases of $40 billion of mortgage-backed securities (MBS). It will be difficult to continue Operation Twist because the FED‘s System Open Market Account (SOMA) is nearly void of debt of less than three-year duration. Any new FED purchases will have to be with cash resulting in an increase in bank reserves. The result be not be a Maturity Extension Program but a new round of Quantitative Easing. It is doubtful that the FOMC statement will allude to fiscal policy but will just remain true to discussion of the dual mandate.
Notes From Underground: Europe … The Circle Be Unbroken
October 18, 2011Round and round the EU goes as it searches for a way to resolve its self-made crisis. As predicted, the Germans and French leaked news to the press–via the Guardian–that a deal had been struck, which would provide the EFSF and the ECB with an equivalent of 2 TRILLION Euros for aiding and abetting the bailout and support of the European financial system. The early afternoon news story gave impetus for the equities to RALLY as well as a SELLOFF in the DOLLAR. The precious metals staged a late recovery after a very severe correction in the morning–GOLD was down almost $50 at its lows.