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.
There is a fairly regular pattern to how the market behaves during what is called the "four-year election cycle." Currently, the pattern suggests a market peak in April, followed by a bottom in late August, before a strong year-end rally.
The Labor Department reported that nonfarm payrolls rose by 175,000 in February after an upwardly revised gain of 129,000 in January and the jobless rate increased from 6.6 percent to 6.7 percent as more workers entered the labor force but were not able to find jobs.