2012/01/30: Quick Post: Observations and Weekly Reports & Events Calendar Now Available

© 2012 ROHR International, Inc. All International rights reserved.

The full calendar is available through the link in the right hand column. Apologies for the delayed posting this week due to significant technical challenges. Since two weeks ago we have been adding color-coding to the various reports and events to indicate the nature of the key influences or items of somewhat elevated importance.

There are no central bank meetings this week, due to the ‘split’ old month into new month week pushing the Bank of England and European Central Bank out into next week. Yet, it is always the case that these sorts of weeks see a lot of economic data…

 

2012/01/27: It’s a wrap: Risk Fizzle, Euro-hope, WEF ‘Global Risks 2012′, Smartest Guy in the Room

© 2012 ROHR International, Inc. All International rights reserved.

Looks like Helicopter Ben morphing into Gusher Ben didn’t help much… except to exacerbate what we all knew was going to be a disjointed week from the time we walked in. And the markets certainly did not disappoint in that regard. Pops and flops (equities and to a lesser degree risk assets like commodities), solid extensions of up trends (those strange bedfellows govvies and Gold), and significant reversals (back to the ‘risk-on’ US dollar “carry trade” in foreign exchange) were all apparent. And substantially due to the FOMC opting-in to a consensus the Federal Funds rate should remain effectively at zero for much longer than the middle of next year projected at their last meeting.

That summary view is all the reasonable response we anticipated in yesterday’s post on Gusher Ben attempting to push psychology upward from underneath hoping that the enthusiasm will pop like an oil ‘gusher’. This is nothing less than a mind game version of quantitative easing (i.e. de facto Q3.) All of the specific asset class analysis and the intermarket implications that came home to roost by yesterday’s Close spilled over into today were noted in yesterday’s analysis.

That said, the resilient equities have found a new/old cause for hope: fresh upbeat assessment of the potential for a Greek debt deal. EU Finance Minister Olli Rehn said this morning at Davos, “A Private Sector Involvement deal is imminent; if not today then likely over the weekend.” We shall see. Certainly everyone hopes he is right.  Yet there are several grounds for skepticism which even go beyond whether a deal can be crafted. There is now some concern whether the Greeks will sign on to something as modest as “reform” (forget “austerity”), and other issues remain.

2012/01/26: FOMC de facto QE3 helps everything except US dollar

© 2012 ROHR International, Inc. All International rights reserved.

Looks like Helicopter Ben has morphed into Gusher Ben. Due to both the economics and current elevated fiscal focus, it is impolitic right now for the Fed to expand its balance sheet beyond already bloated levels. That would be the equivalent of dropping dollar bills from helicopters. So instead it seems to have opted-in to a consensus that the Federal Funds rate should remain effectively at zero for much longer than the middle of next year projected at their last meeting.

Aside from the fact that a prediction of where interest rates are going to be fully across the next several years seems quite an overreach in its own right, there are the other knock-on effects. By attempting to inspire confidence with free liquidity indefinitely guaranteed, Mr. Bernanke and the rest of the Fed is actually attempting to push psychology upward from underneath hoping that the enthusiasm will pop like an oil ‘gusher’. This is nothing less than a mind game version of quantitative easing (i.e. de facto Q3.)

Unfortunately for them, the first things that are shooting up once again are the prices of risk assets, as the return of the ‘risk-on’ trade assists everything except the US dollar. Is it just us, or does it feel an awful lot like spring of last year once again? In any event, the increase in commodity prices represents what now seems to be the next round of the Risk Asset Hot Potato game in a zero interest rate environment, which typically raises more questions than real economic activity.

2012/01/25: Quick Post: Merkel’s Jerry Maguire Moment, Obama, Apple, and Hungary & the Fed

© 2012 ROHR International, Inc. All International rights reserved.

Well, it seems to have finally happened… Germany’s Jerry Maguire Moment. At long last this week it is finally agreeing to “show (me) the money” to the rest of Europe hungering for greater funding for its sovereign debt bailout funds. However, that comes with significant strings attached, along the lines demanded previous on major moves toward closer integration of the European Union…

…and that is along much more stringent Teutonic fiscal lines. Those are at the very least distasteful to much of Europe, and completely unacceptable to the UK. That much was clear from Mr. Cameron’s rejection of the push for such an agreement at the previous EU Summit. As such, if Frau Merkel made her assertion during her meeting last week with French president Sarkozy that everyone should relax on the sovereign debt dilemma because the entire EU treaty was going to be ready for next week’s follow-on EU Summit, it appears as specious as we suggested when they announced it.

In fact, it only reinforces our view that might’ve seemed a bit extreme when we noted it one week ago: the bombastic, bi-polar nature of the leadership in Europe right now. As noted then, the vacillations are almost as troubling as the lack of real progress. If the rest of Europe is not going to go along (and there are others who disagree as well) with the extreme strictures in the German proposals for closer integration, then the only inference that can be taken is that Germany is not going to agree to greater funding of the rescue operations.

So maybe it is not a huge surprise she has also at least partially thrown Greece under the bus this morning by noting the bailout may not be working. What is interesting about that is she allows that the combination of the requisite billions of euros along with austerity does not seem to be getting the job done. And that last bit is the most interesting part.

2012/01/24: (Yet) To Be, or Not To Be (Discounted)? That is the Question

© 2012 ROHR International, Inc. All International rights reserved.

The good ship Greek Debt Negotiation has seemed to suffer the same fate as the Costa Concordia (with due respect for the latter being a human as well as a financial tragedy.) Both ran close to the shoals of disaster. The Concordia in the form of an actual shoal, and the debt negotiations in the even murkier shallows of financial canard. The difference is that the Concordia should reasonably have had a chance to avoid its fate through either high-tech instrumentation warnings or more conservative navigation by its captain. The Greek debt negotiation was already effectively aground before it started, after very early technical indications the country was drowning in more debt than it could possibly service were widely ignored.

More on that intractable situation below. The real question is how the equity markets are gliding along so well near the top of their recent rally in the wake of the indication at the top of this week those negotiations were truly failing. Is it possible that a Greek debt default on (or into) its major March 20th €14.4 billion bond maturation is already discounted? Is it possible this is something the equity markets can simply ignore? Or is it more so that this is yet to be discounted at some point in the future? Drawing the full implications of all that is nothing less than disturbing and fascinating.

2012/01/23: Quick Post: Observations and Weekly Reports & Events Calendar Now Available

© 2012 ROHR International, Inc. All International rights reserved.

The full calendar is available through the link in the right hand column. Apologies for the delayed posting this week. We had some significant web connection failures earlier today. From last week onward we have been adding color-coding to the various reports and events to indicate the nature of the key influences. We will also be italicizing those reports and events which we add to the base table from other resources than the main table. That will assist with differentiating which bold font items are highlighted because of their importance, versus those that simply come from other sources.

This week typically sees a bit less economic data, even if some of it remains quite important. However, on many fronts this week in particular is likely to be one of the most convoluted, impactful weeks in the scope of recent trends in all asset classes. That is due to significant international influences on many fronts that overshadow things like the Tuesday’s preliminary European Purchasing Managers Indices and Euro-zone Industrial Production, Wednesday’s German IFO, and Thursday’s extensive US releases into a quieter day on Friday.

2012/01/20: Further Evolution of Critical Macro-Technical Decision on S&P 500 Stalling

© 2012 ROHR International, Inc. All International rights reserved.

There is a very interesting fundamental context in markets right now, and even in light of the price activity yesterday in other equities and asset classes much still rests with the S&P 500 future decision into the key 1,310 area resistance. The background on that is the same as yesterday’s post. So, very brief today, simply adding some evolution of the technical trend observations to that extensive previous trend analysis.

The US is still leading the other equity markets higher, which is part of what makes the March S&P 500 future decision so critical with the DAX and FTSE 100 obviously still lagging in spite of pushing above their near-term resistance of late. And before getting to the govvies and the US dollar it is important to note that both the Gold and Crude Oil are sagging in spite of the US equities resilience. Which highlights another interesting twist to the entire range of intermarket activity right now.

2012/01/19: Critical Macro-Technical Decision Looming for the S&P 500 …and the Rest in Its Wake

© 2012 ROHR International, Inc. All International rights reserved.

There is a very interesting macro-technical context to markets right now. As is the case in so many of these major psychological decisions, the S&P 500 is approaching a key technical resistance area that is also a major previous psychological decision threshold. That would be into the March S&P 500 future 1,310 area. There are quite a few reasons that is an important technical resistance.

Yet, the important fundamental/psychological aspects make this a very clear macro-technical crossroads for all the equities… and in that context the other asset classes as well. In the first instance, there is the fact that US is now leading the other, more challenged, equity markets higher. That is reasonable in light of improved US data pointing toward potentially better times in the key ‘conspicuous consumption’ economy.

2012/01/18: Quick Post: Technical Projections and Comments Now Available

© 2012 ROHR International, Inc. All International rights reserved.

The Current Rohr Technical Projections – Key Levels & Select Comments (as of Tuesday’s US Close) are now available through the link in the right hand column. We have summarized some of the most interesting and telling tendencies below.

As noted in yesterday’s post, somewhat more upbeat economic data assisting the equities has also been putting a bit of pressure on the US dollar and primary government bond markets. Yet they have also been quite resilient, not exhibiting any UP trend reversing effects just yet. Adding to the somewhat perverse “it’s all going up together” psychology right now is the strength of Gold and Crude Oil, which would not normally accompany the combined overall up trends in equities,  govvies and the US dollar all together.

2012/01/17: Quick Post: Observations and Weekly Reports & Events Calendar Now Available

© 2012 ROHR International, Inc. All International rights reserved.

The full calendar is available through the link in the right hand column. From this week forward we will be adding color-coding to the various reports and events to indicate the nature of the key influences. We will also be italicizing those reports and events which we add to the base table from other resources. That will assist with differentiating which bold font items are highlighted because of their importance, versus those that simply come from other sources.

This is another important data release week, yet is less crowded and critical than some of the intense reporting last week even if the upbeat Chinese data has already been influential. Yet, continued sharp influences from any developments on the European Sovereign Debt Crisis will remain a major key even if the equities seem to be ignoring the recent sovereign debt downgrades for now (with more on that soon.) Thursday is a very key auction horizon once again this week as well.