During the Great Financial Crisis, Hyman Minsky was rediscovered. Minsky's insight was that long periods of steadily rising asset prices encourages financial engineering and leveraged bets that assume a continued rise in asset prices.
Stocks today were indicated to open essentially flat even before this morning’s ADP report and the labor market report, which didn’t add any excitement. The government jobs report coming out on Friday is the key economic read on the docket now.
The U.S. dollar is extending its advance as the divergence theme moves into overdrive. The dollar has drawn close to JPY119.50. The euro has fallen to new lows near $1.2320, having been turned back from $1.25 on Monday. The Australian dollar has been pushed briefly below $0.8390.
This is a brief follow up on the Supply and Demand Report of 30 November. In that report, we observed an extraordinary development in the gold market. We made several predictions, which came true almost immediately.
Two years ago it was hard to find analysts who expected average GDP growth over the rest of this decade to be less than 8%. The current consensus seems to have dropped to between 6% and 7% on average.
Bond yields are falling, as are commodity prices. Both NDX and RUT are starting December down more than 1%. Is a December swoon set to trigger? Based purely on seasonal tendencies, the odds of a steep fall in equities through the end of the year are low.
Stocks ended in the red on the first day of December, but appear on track to reverse course in today’s session following a positive market action in Europe ahead of the ECB meeting on Thursday.
Every now and then the financial media is abuzz when a Hindenburg Omen is signaled and investors turn cautious. A short description of the frightening market-event is provided below from Wikipedia. Named after the famous Zeppelin airship that exploded in a disastrous fire...
Everyone needs to buckle up because there is a lot to cover as I try to do justice to the wild events that took place in markets from Thursday through today, and what I think some of the ramifications may be.
This Great Graphic, composed on Bloomberg, shows that China's market capitalization (white line) is greater than Japan's (yellow line). This is the consequence of two forces.