As was highlighted in last week's article, the key theme since 2011 has been declining inflation and economic growth rates. Lower inflation and weak economic growth is not the environment that favors investments in commodities or commodity-sensitive currencies (CAD, AUD).
While the stance of monetary policy around the world has, on any conceivable measure, been extreme, by which I mean unprecedentedly accommodative, the question of whether such a policy is indeed sensible and rationale has not been asked much of late.
The stock market rally is continuing to push higher, taking the broader market indexes into record territory. This has put skeptics like myself on the defensive. But the reality is that we aren’t seeing all-around celebration in the market as used to the case in the past.
The S&P 500 climbed by 0.52% and the Dow rose by 0.58% to close above 15,000. Both indexes have now reached new record highs in nominal terms. Transports, media, industrials, and banks were leading sectors today and technology and homebuilders were laggards.
Japan's Nikkei 225 has been on a tear of late and is now up 73.8% from its interim low in November of 2011. Its Monday gain of 3.55% puts the index up 36.41% in 2013.
Part VI is the last of the series of reports from the 10th annual Strategic Investment Conference, presented by Altegis Investments and John Mauldin. Dr. Lacy Hunt, of Hoisington Investment Management, presents his views of the impact on economies when they become heavily leveraged.