A slowdown in China, further reductions in Fed stimulus, and an eventual crack up in the bond market have raised the possibility of a larger correction later this year, said Bill Fleckenstein, President of Fleckenstein Capital.
As we’ve been saying at PFS, this year is going to be about stock picking with the S&P 500 up merely 1% year to date. A lot of that has to do with the incredible run in the U.S. indices last year, which has caused many investors and analysts to question valuations...
If interest rates are supposed to be on the rise, why has the price of gold gone up so much this year? Is it merely because it is bouncing back after a sharp decline in 2013? We have a closer look at the link between gold and interest rates to gauge how investors may want to approach the bait provided by the Fed.
Throughout the current economic cycle I have continually referred to the characterization of “the tale of two economies”. Specifically, I have been struck by the dichotomy between the fate and fortunes of large US companies relative to their much smaller business brethren.
The European Central Bank is in a pickle. The pillars of monetary policy, money supply growth, and inflation are crumbling. The main interest rate it influences, the repo rate, is already at a lowly 25 basis points. Excess liquidity is trending lower as European banks returned funds borrowed under the Long Term Repo facility.
Today's release of the Fed's Industrial Production report showed a 0.6 percent increase in February, handily beating the Investing.com forecast for a 0.1 percent gain. The improvement was further enhanced by the upward revision of previous month's headline number from -0.3 percent to -0.2 percent
The FDIC has sued 16 of the largest banks in the world plus the British Bankers Association (BBA) alleging that they engaged in fraud and collusion to manipulate the London Inter-bank Offered Rate (LIBOR). BBA called LIBOR “The most important number in the world.”
Given the widespread deterioration I am seeing we may be setting up for a larger correction, with the mid-term election cycle predicting an intermediate peak in the market between now and the end of April.