What we're witnessing right now in U.S. markets is a shift in the narrative structure around Fed policy, and it's hitting markets hard because the narrative structure around the Fed as an institution has never been stronger or more constant.
After hitting all-time highs last week, the markets quickly sold off ahead of first-quarter earnings, with Alcoa kicking things off Tuesday. Both the S&P 500 (SPY) and Dow (DIA) were down a little over 1% on Monday’s close.
This week the market has seen a greater loss in momentum and breadth, which suggests we are on a much weaker foundation than was seen in 2013. Interestingly, while US markets are beginning to show signs of exhaustion, there are signs of life in emerging markets.
With April Fools’ Day behind us, it’s time to get serious about investing. Don’t be fooled by this week’s non-farm payroll report; nor by the assertion that the U.S. may have the cleanest of the dirty shirts. And certainly don’t be fooled into thinking the market has your interests in mind…
Set aside the gloom and doom and make hay while the sun shines, advises Jim Puplava in his recent Big Picture broadcast, “As Good As It Gets—And It’s Getting Better.”
Jim Bianco warns that China may be in a hard-landing phase right now as economic data continues to deteriorate and more funds flee the country. When asked what the implications are for other markets, he said that it will certainly cause a problem, but he’s not expecting an ’08 crash.