The case for the ECB to print later this year is growing by the day with opposition such as Bundesbank chief Jens Weidmann falling by the wayside. While the ECB ramping up the printing presses would be bullish for risk assets, we have to remember that we saw widespread market weakness before the ECB stepped in previously...
The international monetary system has collapsed three times in the past 100 years: in 1914, in 1939, and in 1971. Each collapse was followed by a period of turmoil: wars, civil unrest, or significant damage to the stability of the global economy. The next financial collapse will resemble nothing we've seen in history.
The Latest Conference Board Leading Economic Index (LEI) for March is now available. The index rose 0.8 percent to 100.9 percent and the five previous months were revised upward (2004 = 100). The latest number was above the 0.7 percent forecast by Investing.com.
For a short while it seemed that nuclear power was going to see a revival. Then Fukushima happened and public sentiment once again turned sour, with many government leaders around the world shutting down their plants. However, as fears caused by the Fukushima incident begin to fade, Marin Katusa says that the bullish factors for nuclear energy are starting to resurface again.
If you don’t adapt, you die. Or worse … for an artist, anyway … you become uncool and passé. Your performance art becomes performance shtick. And yes, I’m looking at you, Elvis Costello. There’s an adaptive genius to the David Byrne’s and the David Bowie’s of the world, quite separate from their musical genius, and that’s what I want to examine in this note.
The recovery over the past two months appears to support the general view that severe winter weather was responsible for the contraction, and that we shouldn't read the slippage as the beginnings of a business cycle decline. At this point it looks like the Winter slump has been reversed.
Cassandras warn that the foreign appetite for US debt is satiated and wonder who is going to buy US Treasuries when the Federal Reserve stops. Not only are US officials not concerned about this, but the Department of Treasury continues its campaign to discourage foreign central banks from buying so many Treasuries.
CPI and the PCE Price Index and Fed Policy
The BLS's Consumer Price Index for March shows core inflation below the Federal Reserve's 2% long-term target range at 1.66%. The Core PCE price index at the end of the February (the most recent data), is significantly lower at 1.10%. The Fed is on record as preferring Core PCE as its inflation gauge.
Earnings season is upon us. Expect a lot of jumping around this quarter as companies miss or exceed estimates. Although earnings are important, they are also fickle and easily manipulated, which is why it’s always good to remind ourselves, as shareholders, of some of the long-term time-tested ways in which companies deliver value not merely over one quarter to the next, but over years and years to come.