The Federal Reserve has pursued the unprecedented monetary policy of lowering rates to zero and increasing their portfolio from 500 billion to over 4 trillion. But as the Fed reminds us, there is a cost.
European, Asian stocks declined, halting a global rally that sent U.S. stocks surging to new all time highs faltered, weighing on the S&P although the index rebounded modestly after a kneejerk announcement lower overnight after Trump's National Security Advisor announced his unexpected resignation.
European and Asian stocks, S&P futures, bond yields, the dollar and commodity metals are rose, in some cases making new all time highs, lifted by the latest reemergence of the "Trump trades" as hopeful investors once again bet that the U.S. president's tax reform plans will boost economic growth and corporate profits, despite another warning from Goldman that the president's fiscal plan is about to be derailed.
"it's risk-on in Bonds, it's inflation-on in Stocks, and EM is now playing role of cyclical catch-up trade" says BofA. In short, in the last week the Trump Trade has emerged from the dormancy in which it had faded for the past month. But when one looks at where the money is flowing, it's everywhere but where one would expect, as US stocks have seen outflows 4 of the past 5 weeks.
“The bulls and the bears have met at the crossroad. However, neither is ready to commit capital towards their inherent convictions. So, for 43-days, and counting, we remain range bound waiting for what is going to happen next... Every bull market in history has ultimately crumbled under the weight of fundamental realities. Despite the many hopes to the contrary, this time will be no different."
Asian stocks hit their highest level in 18 months, with positive momentum lifting European shares which were helped by Societe Generale earnings. Yields fell on some of the euro zone's battered low-rated bonds as investors put aside the political risks that have dominated markets this week. After trading flat, S&P futures bounced as US traders walked boosted by a spike in the USDJPY.
With the Trumpflation rally fizzling with every passing day, the only question asked by traders is "Is it time to sell the market?" According to Bank of America, the answer, at least for now, is no. Here are the seven rules and indicators Bank of America uses to make that determination.
"I find myself in the strange situation of cheering Donald Trump’s nascent program of economic renewal for the US, while worrying deeply about the domino effect that may topple a dollar-based global financial system whose health has relied greatly on benign neglect by the United States."
More debt and less discipline is not the solution to a pre-existing condition characterized by the same. The price tag for failing to acknowledge and address that reality rises exponentially over time.
In a mostly quiet Wednesday session, Asian stocks rose overnight along with European bourses, which were led higher by miners after Rio Tinto posted higher profits for the first time in three years and a bigger-than-expected dividend, while India’s Sensex extended declines after the central bank unexpectedly left rates unchanged. US futures were little changed as oil continued to fall after API reported a huge inventory build
"It totally undid me that he could vote for Trump... I felt like I had been fooling myself... I don't see this ever being fixed... once they found out I had voted for Trump the stuff started flying..."
Not since the Vietnam War have we seen as much strife and personal hostility within an otherwise friendly community. Thank the administration of New Trier High School in north suburban Chicago. This story is about the madness on college campuses now being crammed down into a public high school... "Get your fucking KKK looking asses back to your house and shut up...”