I have maintained for some time now that a significant pullback isn't likely before April. As Clint Eastwood said, "deservin's got nuthin to do with it," a phrase that has frequently been on my mind of late.
I don't think that a fundamental shift is happening in the markets now. Rather, it happened a couple of years ago. I still expect a sharp correction in mid- to late spring.
The market wants to go to the all-time high on the S&P 500 this spring. It can be stopped, but it will take more than another chunk of indifferent data or some more warning lights to do it. Seasonal adjustments and new budgets may ward off evil surprises in that respect for a little longer.
I agree that domestic energy production will be a long-term positive for our balance of trade, and make contributions to employment and growth over time. But the price of oil-based energy products for users has risen this year, not fallen. US producers would, not surprisingly, rather sell extra barrels at the Brent price rather than at WTI, and the price of the latter is still tightly wound with financial markets.
The fact of energy self-sufficiency is not proof against recessions or stock market turbulence.
Like Druckenmiller I don't see a market meltdown either, not yet - only that we are building to one. But 10%+ corrections have been part of the landscape for the last six years and I don't see that 2013 will escape one. In fact I hope that it doesn't, because a straight-up market would only increase the chances of an uglier resolution later on.
I believe that the most likely outcome for the eventual May-June correction is to see the indices test the unchanged level on the year. The political variables, though, make it difficult to have much confidence in those outcomes..
Central Banks Are The Shepherds, Markets Are The Sheep [View article]
I think the answer is pretty long and complex. But I do think that the problem is not so much that we are like the French, but that the Europeans might have been better off being more like us, at least for a while. The Japanese were very slow to repair the damage - or even acknowledge it was there - after their bubble. The US has been at the other end of the spectrum on a relative bases, and Europe in the middle. So long as their own restructuring drags on, it's a drag on the US and Asia as well. China isn't going to help either, at least not this year.
Trading A Defiant Market Against An Import Warning [View article]
A fair point, though the non-petroleum data weakened as well. Keep in mind also that although our own crude oil production has risen recently, so have our imports of refined products (e.g., gasoline) as a percentage of the total.
Trading A Defiant Market Against An Import Warning [View article]
When any country's imports tail off, it is a tell-tale sign of domestic weakness. As to global trade, it did decline in 2012.
The currency situation could flare up in 2013, but I don't think it will. I don't see the battle getting joined in numbers unless and until the global economy significantly worsens.
Trading The Market Versus The Economy [View article]
The meaning of that is that in ordinary times, the Fed wants to act like another bank, only in charge - sort of like Head Boy in an English school. But these are not ordinary times, and people like Bill Gross, Mohammed El-Erian and far humbler servants like me, all agree on one thing, at least - current Fed policy is unprecedented. We don't really know how it will all work out and we're not even sure how it should work out. You've heard of FDR's remark that we have "a rendezvous with destiny?" Well, we have a blind date.
It's Not The Economy, It's Not Earnings, It's The Season [View article]
Thanks chaser. As of today, I wonder if anything but a major political surprise will be able to overcome the first quarter effect. In more typical times, I'd be looking for a pullback after expiration Friday, but this time I fear something bigger might be needed to halt the chase for 1575 before the real correction can begin.
Time To Start Fearing For Equities [View article]
Time To Start Fearing For Equities [View article]
I don't think that a fundamental shift is happening in the markets now. Rather, it happened a couple of years ago. I still expect a sharp correction in mid- to late spring.
Time To Start Fearing For Equities [View article]
Time To Start Fearing For Equities [View article]
The fact of energy self-sufficiency is not proof against recessions or stock market turbulence.
Time To Start Fearing For Equities [View article]
Echoes Of 2007 In The Markets [View article]
Central Banks Are The Shepherds, Markets Are The Sheep [View article]
Central Banks Are The Shepherds, Markets Are The Sheep [View article]
http://bloom.bg/US7rcc
Central Banks Are The Shepherds, Markets Are The Sheep [View article]
Central Banks Are The Shepherds, Markets Are The Sheep [View article]
Central Banks Are The Shepherds, Markets Are The Sheep [View article]
Trading A Defiant Market Against An Import Warning [View article]
Trading A Defiant Market Against An Import Warning [View article]
The currency situation could flare up in 2013, but I don't think it will. I don't see the battle getting joined in numbers unless and until the global economy significantly worsens.
Trading The Market Versus The Economy [View article]
It's Not The Economy, It's Not Earnings, It's The Season [View article]