We have seen a clear deterioration in the market’s short-term trend but this is a welcome event helping to alleviate the market’s overbought condition. With the market’s intermediate-term and long-term trends and momentum still in bullish territory coupled with cyclical leadership, we have a very robust market that is likely to head to new highs once this short-term pullback exhausts itself.
The market was quiet as investors’ kickoff the summer with the 3-day Memorial Day weekend. The S&P 500 was off less than one point and the Dow was slightly higher.
Casey Research's Chief Energy Investment Strategist, Marin Katusa, whose portfolio profited nicely the last time the uranium bull broke loose a decade ago, recently interviewed a group of world-renowned energy experts to discuss the prospects for the sector that some considered doomed by the Fukushima disaster.
Inflation is not on the radar anymore. We do hear occasional comments from central bankers who warn about future inflation arising from QE. We also recall a few statements in the media along the lines of, "They're printing all this money, we're going to have huge inflation, and interest rates are going to shoot up."
The May Advance Report on April Durable Goods was released this morning by the Census Bureau.
Japan's current economic policy also has strong mercantilist overtones, as the devaluation of the currency is held to help its export sector.
Natural gas is an important feedstock for the chemicals and fertilizer industries, so higher prices could pressure those sectors. Oil companies with significant chemical operations could also see this business segment take a hit...
This may be an unpopular suggestion, but those with a contrarian view of the world will surely appreciate the logic here. The chart below from Goldman shows the consensus economic forecast for 2013 GDP growth of the large Eurozone nations. Again, this is not the actual GDP, but a forecast over time.
One of the more fascinating ways to visualize the world’s growing pile of public and private debt comes via an interactive graphic in the online version of today’s Wall Street Journal.
The intraday reversal in the markets Wednesday is of big interest and importance to traders and market technicians. Since the Jon Hilsenrath article, almost two weeks ago, investors have put more weight again on any tapering talk from the Fed.
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