2012/05/11: Better headline global economic data could be highly ‘specious’
© 2012 ROHR International, Inc. All International rights reserved.
“Specious.” It’s one of those terms that gets tossed around quite a bit, even when it’s not necessarily proper in some contexts. Yet, it would certainly seem to apply to a goodly portion of recent “excellent” global economic data. And that was even before a range of important Chinese economic data disappointed today.
Much is suspect after the lower US Unemployment rate reported last week right through economic releases this week. And this is not a matter of attempting to find a dark cloud to obscure these silver linings. It just seems a desire to look for reasons why the global economy and equity markets are still good is once again overshadowing thorough assessment of the ‘story behind the numbers’.
And that’s true everywhere from the Far East right around into North America. Beginning with the latter, there is little doubt that the lower US Unemployment rate reported last Friday was a function of a lower labor force Participation Rate. In fact, it was down to 63.6% from 64.0% as recently as December. That’s not only quite a drop; it also speaks of a more pernicious tendency just as the Obama administration would assert this is slow yet steady “progress.”
That is the degree to which the folks who have left the unemployment rolls may not have dropped out voluntarily. It is no secret that a surge in layoffs occurred in the US in the wake of the 2008-2009 severe economic and market problems. Even as the US administration has been extremely keen to extend unemployment benefits availability above and beyond the previous regime, that is now coming to an end for many folks. And those who are no longer ‘officially’ looking for work while on jobless benefits are also dropped from the ‘unemployment’ numbers.
This not only portends a certain portion of the population will be in a more depressed economic state. It also has implication for the US fiscal and retirement program calculus. One of our favorite ‘street’ economic commentators said it best in his timely assessment of the US Employment report last Friday…
2012/05/09: Quick Post: ALERT: Finely calibrated equities decision rests with Europe
© 2012 ROHR International, Inc. All International rights reserved.
After all of the major divergence between the US equities and Europe, the significant trend decision seems to be recalibrated around the critical lower supports in each market. The confluence of facts on the ground in Europe comes right into more important scheduled fundamental influences tomorrow, and a major raft of Chinese economic data on Friday. And it will all come down to the key 1,338 support level for the June S&P 500 future.
The reason for that is the weaker European markets already being down into or near lower critical supports. And that is consistent with current consideration of whether the US indices will sink back in to an entire lower range as well. If the stronger sisters are capitulating, we are fairly confident the weak sisters will be headed lower still in spite of the degree to which they have already dropped over the past month and a half.
2012/05/03: Weak data, France headed for Socialism, ECB against stimulus…
© 2012 ROHR International, Inc. All International rights reserved.
It seems the fundamental drivers for the markets are possibly headed for another significant disconnect. Yet the markets are ignoring it for now. Possibly that is because whether there is a dislocation in Europe will not be completely clear until after Sunday’s French Presidential election and Greek Parliamentary elections. However, that does not lessen the degree to which the mindset of the European people (and some European governments), the economic data, and the current stance of the European Central Bank might be at odds.
This has become more apparent through the French Presidential debate allowing Monsieur Hollande to maintain his lead over President Sarkozy. It is of course still possible that the current French head of state will attract enough votes from the Far Right to defeat the challenger in Sunday’s poll. Yet, we must admit that the prospect of the Socialist victory in the presidential election is creating far less concern in the markets than we might’ve suspected from yesterday’s Showdown at French Election Corral.
The consistent weakness of the international economic data (now including US ISM Non-Manufacturing Index) is making Tuesday’s strong US ISM Manufacturing Index ever more the outlier in a weakening global economy (as we had already noted yesterday.) While there might be a surprise in tomorrow morning’s (holiday delayed) European Services Purchasing Managers’ Indices, any further confirmation of weakness there will set a very negative tone into the important US Employment report.
That is already somewhat suspect due to the weakness of yesterday’s ADP private employment figure and this morning’s Challenger Job Cuts pushing up once again. Whatever else we may see, the prospect of further weakness in economic data would seem to justify the “growth” versus austerity agenda of those on the Left. And yet, at today’s post-rate decision press conference ECB President Draghi seemed far more focused on reform rather than any further stimulus. And that is just the sort of thing that might leave the central bank on the opposite side of popular rejection of austerity…
2012/05/02: Quick Post: ALERT: It’s only going to get wilder…
© 2012 ROHR International, Inc. All International rights reserved.
Our Weekly Report & Event Calendar and focused comments in the Weekly Report & Event Summary Perspective on key influences anticipated all this from the top of the week. Hope you found that useful, as the fun has just begun.
Whatever has transpired so far is just like a good symphony: it is just the overture for what is coming next. And for any of you who might have failed to read that assessment of the key event horizons for the week…
2012/04/30: Quick Post: Weekly Calendar and Perspective Available
© 2012 ROHR International, Inc. All International rights reserved.
The Weekly Report & Event Calendar is now available through the link in the right hand column. The focused comments below it are already available as well in the calendar section as the regular weekly Summary Perspective on key influences. We hope you find that useful as well.
For those of you who have not already seen it, there is a lot of emphasis on Thursday and Friday this week. However, as opposed to last week’s economic data and important event saturation bombing each day, the dislocation of European events due to the May Day (or Labour Day) holiday Tuesday is an important theme. In spite of some other influential market impacts, the European holiday intensifies the focus on the Thursday-Friday event horizon.
2012/04/27: Quick Post: Bifurcated market psychology again: Govvies and Equities both strong
© 2012 ROHR International, Inc. All International rights reserved.
In its way, it’s nothing less than breathtaking. The tremendous resilience of the govvies (at least the primary markets) in the face of the equities seeming to get back on track yesterday is impressive. Let’s allow that each of these asset classes is on a bit of a correction from recent highs. Even so, the degree to which govvies have maintained their overall bid while equities have rallied so strongly since the first of the year is quite a phenomenon. Maybe it is all just a reflection of the massive global central bank liquidity infusions and low interest rates; and that is causing investors to chase yield wherever they can find it.
However, there is very possibly another macro-technical factor at work: a classical corporate earnings announcement season split influence. That is to say positive earnings driving equities buying. At the same time troubling real world economic and political news causes other funds to seek the safety of the primary government bond markets. And that is more so typical of the short term cycle. As such, it is less surprising than might otherwise be the case. We have seen it before, and the operative question is, “What happens next?“
