Lies, damn lies, and statistics! I am sure you have heard that saying before. There has been a burgeoning cottage industry for market pundits that trash any economic number that comes out, especially the ones that go against their projections.
Confronted with the possibility that the endgame of the present experiment in extreme monetary accommodation may be higher inflation and even currency disaster, many private investors and portfolio managers respond that they should be okay, since their wealth is protected through allocations to equities and real estate.
After posting another new high last week, stocks were taking a breather during Monday’s session. The primary catalyst came out of China.
We are in a somewhat of a dead-zone on the data front this week, with the Q4 earnings season effectively over and not much on the economic calendar either. For the record, the earnings season isn’t officially over yet as we will get results from more than 180 companies this week, including 2 S&P 500 members.
Guest blogger Frederik Vitting Hermann looks at the more widespread use of China’s currency around the globe. Conditions in the domestic market and the Chinese incremental reform style of monetary authorities make full internationalization within the next ten years implausible.
The Agri-Food Price Index hit an all time record high for the week ended 7 March. This index of Agri-Food prices is rather comprehensive in that it includes sixteen(16) important Agri-Commodities. That index is plotted in the chart below which covers the past almost two years.
Global markets are relieved that the risk of a shooting war has receded (but not disappeared), and they are rallying. The situation remains highly volatile. Threats and counter-threats are issued daily. We do not know how this drama will end. There are some substantive developments, however; and these are the subject of this note.