In response to "Brink" of a New Cold War? Another Cold War Already Started?, reader Ted informs me that former Secretary of State Henry Kissinger feels the same way about sanctions and the renewed cold war as I do.
The recent turbulence in the stock market is behind us and a rally is now underway. Given the fact that we have recently entered the most favourable 6-month period of the U.S. Presidential Cycle, it is our contention that Wall Street will advance quite sharply until spring.
Including this morning’s reports from Wal-Mart and Viacom, we now have Q3 results from 461 S&P 500 members or 91.8% of the index’s total membership. Total earnings for these 461 companies are up +6.9% from the same period last year, with 70.5% beating earnings estimates.
China has announced it will finally open its equity markets to foreign investors. A trading link will be established between Shanghai and Hong Kong this coming Monday. This will open up access to nearly $2 trillion worth of Chinese equities.
Large pools of capital, including central banks and sovereign wealth funds continue to buy French bonds, keeping yields near German levels. The logic is not so much about fair value based on economic fundamentals. Instead, it is a political judgment.
Gold’s time will come again, and so will silver’s. But I don’t think we’re there yet. If a bear market has three phases, I’d say we’re in the final phase – but the bear still has some biting to do. Time will tell if I’m right or not.
In May we started a recurring monthly review of all the main economic data. At the time, the consensus view was that growth in wages and employment were accelerating and that this would soon lead to a meaningful increase in inflation above the Fed's 2% target. So far, this has been wrong.
Given European growth is expected to decline well into 2015 we are likely to see another round of the Euro crisis occur which could derail strong bullish seasonal strength the U.S. market typically sees in the last two months of the year.
The truth on Obamacare is finally out: The bill was purposely written to trick the CBO (congressional Budget Office) into believing the bill was not a tax. Moreover, the bill also depended on the "Stupidity of the American Voter".
Stocks lost ground in a big way about a month back, with global growth fears giving us the first major correction of the year. It didn’t last long, with investors gaining confidence that the strong U.S. economic momentum will be able to sustain itself without global growth support.