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Finance 0
EUR/USD Recovery Halted On Positive US Housing Data
US existing home sales came out at 5.45 million annualized, slightly above 5.4 million that was expected. In addition, last month’s number was slightly revised to the upside: 5.36 instead of the original report that stated 5.33 million. While the numbers basically deserve the title “within expectations”, they come on top of a week that has been nice to the US dollar, and provide fuel for last minute gains instead of profit taking. The Federal Reserve went hawkish by widening the door for a June rate hike. Not only did they mention the word June 6 times in the minutes but also talked about it as a serious option, given some more upbea... -
Finance 0
E The Flip Flopping Fed Strikes Again!
Boy, the Federal Reserve must really hate traders. Once again, a flip flopping Fed has reversed its message to the market, suggesting that interest rates will rise as soon as its June 17 meeting. The news came out with the release of its April Open Committee Meeting minutes. It’s clear that as soon as financial markets stopped crashing, a rate rise was back on the table. The revelation pulled the rug out from traders who were expecting no move on interest rates until December at the earliest. Markets were stunned senseless by the surprise for a few minutes. Then, the lower interest plays, like gold (GLD) and utilities (XLU) started to crate... -
Finance 0
The Philly Fed ADS Business Conditions Index Update
by Jill Mislinski The Philly Fed’s Aruoba-Diebold-Scotti Business Conditions Index (hereafter the ADS index) is a fascinating but relatively little known real-time indicator of business conditions for the U.S. economy, not just the Third Federal Reserve District, which covers eastern Pennsylvania, southern New Jersey, and Delaware. Thus it is comparable to the better-known Chicago Fed’s National Activity Index (more about the comparison below). Named for the three economists who devised it, the index, as described on its home page, “is designed to track real business conditions at high frequency.” The index is based ... -
Finance 0
E The Daily Shot And Data – May 20, 2016
Greetings, Let’s start with the Eurozone. The latest ECB minutes point to the central bank’s frustration with the currency bloc’s governments’ inaction. The Governing Council is effectively saying: “We are hitting a wall here – it’s time for the Eurozone governments to step up.” Labor reforms are especially important in this environment in order to support the ECB’s effort. Source: ECB Governing Council minutes Indeed, the ECB is providing government deleveraging via QE, as privately held government debt balances collapse. Source: Credit Suisse 1. In other Eurozone developments, the IM... -
Finance 0
2,050 Or Bust – Can The S&P 500 Avoid A 4th Weekly Decline?
10 points. That’s what we need on the S&P today to reverse what is turning into a very ugly downtrend on the weekly chart. We’ve been discussing that line since February as the danger zone and, if you read us at all, you KNOW we short the S&P every time it gets to 2,100 and the last visit was mid-April, when I warned it wouldn’t last in “Toppy Tuesday – What More Can They Do?” At the time, the market had spiked up on enthusiasm over the “emergency meeting” between the White House and the Fed – nothing came of it and the markets promptly began to fall for the next 4 weeks. In that a... -
Finance 0
“Shanghai Accord Flows Reverse” – Retail Investors Pull Money From Stocks For 6 Straight Weeks
One week ago we showed that in a surprising twist, even as the broader market has remains stable and trading rangebound between 2040 and 2080 over the past month, actual equity outflows had accelerated and one week ago EPFR reporter another $7.4bn in equity fund outflows (the 5th straight week) driven by $4.8bn in mutual fund outflows and $2.7bn ETF outflows, leading to a $44bn equity exodus past 5 weeks, which as Michael Hartnett points out is the “largest redemption period since Aug’11.” Overnight we got the latest fund update and not surprisingly, the outflows from equities have continued. BofA summarizes the latest flow... -
Finance 0
Evening Euro Target: 1.1260
For the past twenty six hours the difference between pairs heading the same way has reduced. The euro/dollar is up 48 points: from 1.1179 to 1.1227. The pound/dollar is down 113 points: from 1.4663 to 1.4550. The spread between the pairs has reduced due to a revival of the euro/pound cross. European stats have nudged the euro up. In the UK, industrial orders in May were down 8 points against a 13 point forecasted fall and a previous 11 point fall. The surplus on current Eurozone operations has risen to 27.3 billion euros against a forecasted 19.6 billion euros and a previous 19.2 billion euros. Without taking seasonal fluctuations into accoun... -
Finance 0
Weekend Reading: Yellen’s Line In The Sand
This past week, the big news for the market was the release of the April 27th FOMC minutes which once again suggested the Federal Reserve may be on a path to hike rates sooner rather than later. The reality is simple, with the markets hovering on critical support, a Presidential election just around the corner and no real evidence of economic recovery, the likelihood of a rate hike in June is approaching zero. Here are some key highlights from the meeting minutes: “Participants generally agreed that the risks to the economic outlook posed by global economic and financial developments had receded over the inter-meeting period. Participants... -
Finance 0
Flying With The Fed
The market has drifted lower in recent weeks as rising anxiety over a second Fed rate hike looms. I look at some of the top technical and fundamental reasons the market is behaving the way it is. Observations of risk and reward are noted throughout. Charts include: large cap stocks, treasury bonds, oil, energy sector, high yield bonds, REITs, and more. Recorded on May 19, 2016. (Video length 00:10:46) ...
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