With most of the world's markets closed celebrating Labor Day, overnight markets have been especially thin, with virtually no newsflow, even as the dollar surge, now above its 200-DMA keeps a lid on S&P futures.
.. The ongoing political impasse across Italy is likely to continue to breed continuing populist politics, while the Greeks will retain a long-term resentment to Europe for generations. Right wing racism will continue to fuel electoral dissent – and becomes easy for rable-rousers to focus.
China has developed a craving for consumer goods, the more luxurious, the better. Along with most other countries, China’s credit boom and spending spree are being followed by out-of-control debt.
"Having erred bearishly of equities for most of this year that has been the proper course of action; but we shall change that this morning from “has been” to “was,” for it is now proper to err bullishly of shares generally."
It’s an extremely busy week of US data/earnings/events with plenty to keep US yields in the spotlight after a notable sell-off in the first half of the week followed by a notable rally over the last couple of days.
Increased demand for RMB assets and a switch out of the USD for trading purposes, which will likely undermine the United States' dominant role in the global economy and create a sea change in global asset allocation to Chinese markets.
Concluding years of "on again, off again" speculation, at noon on Sunday, T-Mobile and Sprint announced they finally consummated an all-stock merger resulting in a telecom giant with a $146 billion enterprise value which will serve some 127 million customers.
In the longer run, of course, the premature and non-free market based destruction of capital and other economic resources takes its toll. Ultimately, the result is lower productivity, reduced output, less GDP and lower living standards...
"Treasuries tend to rally in episodes of market stress.This is not happening today, which is why investors need to pay attention to whether an EM-style debt crisis is about to play out."
