200k aging Republican bikers, a decent percentage likely unemployed. More than 200k “Liberal” boomer democrats, many also unemployed. Another 50-200k millennial anti-Trump protestors. What could go wrong?
'Trump Time' - Let the games begin - Massive political uncertainty – President’s conflict with the CIA – ‘Strong dollar policy’ to end as U.S. has $120 trillion plus debt – Trump inherits Bush and Obama’s humongous debt
European shares rose as Fiat rebounded on hopes concerns about parallel to Volkswagen are overblown, Asian stocks were little as Chinese shares fell to the lowest level of 2017 after poor export data, and U.S. equity-index futures rose ahead of a deluge of bank earnings. The dollar is headed for a weekly loss and gold trades at the highest price in almost two months.
We expect global monetary authorities to protect the dollar as long as they can and we expect them to fail. Stocks and bonds will react violently; stocks and weak credits falling, treasuries prices rising (at first). That failure will lead to hyperinflation – not driven by demand, but rather by central bank money printing. A new global monetary understanding will then emerge.
The Fed's latest Beige Book released Wednesday found seven regional Fed districts reporting economic activity as growing at a modest or moderate pace, a decline from 11 in the last report, with strong dollar headwinds among one of the more frequently cited reasons for the weakness.
The key economic releases this week are consumer confidence on Tuesday, ISM manufacturing on Thursday, and the employment report on Friday. There are a few scheduled speaking engagements from Fed officials this week. The Beige Book for the December FOMC period will be released on Wednesday.
One day after a slump in Chinese trade sparked a global market selloff on concerns the world's second biggest economy had once again hit a downward inflection point, overnight China surprised once again, this time to the upside when the latest inflationary data printed hotter than expected, sending European and Asian stocks higher and pushing the yen lower after China’s producer price index rose for the first time since March 2012.
In the US focus will be on the market's reaction to the second presidential debate, FOMC Minutes but also retail sales, import and producer prices and Michigan sentiment. We also hear from various Fed speakers throughout the week, and Chair Yellen gives a keynote speech on Friday.
While the entire nation was transfixed on last night's latest, and most scandalous yet "debate", in which there was little actual debating and a lot of talking points and character assassination attempts, index futures were little changed throughout Sunday's 90 minutes event, suggesting that no clear winner had emerged on either side.
When one month ago China announced that it had created just Rmb 488 billion in new credit as per its broadest credit aggregation metric, Total Social Financing, there was broad concern that the PBOC had again hit the brakes on the country's rampant credit expansion. Those concerns were more than allayed, however, overnight, when the PBOC released its latest August new credit data, which saw total credit grow by well over Rmb 1 trillion.
September will be quite a busy month for investors since there are around 30 major central banks meetings scheduled. Since the Bank of England’s last policy announcement, the total monthly amount in global official quantitative easing has reached almost $200 billion, which corresponds, for the purpose of comparison, to Portugal’s annual GDP in 2015. Long-rumoured and oft-discussed, QE infinity is now a reality.
While not as dire as the recent analysis by Deutsche Bank, overnight JPM released its latest recession probability analysis, and - somewhat unexpectedly following the last two stellar job reports and a full court political press that the recovery has rarely been stronger going into the election - now sees a 37% chance of a recession in the next 12 months. This is the highest recession probability calculated by Jamie Dimon's bank during the current economic cycle, and matches the odds first laid out in early July.