2012/05/29: Quick Post: Weekly Calendar and Perspective now available

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

The Weekly Report & Event Calendar is still available through the link in the right hand column. The focused comments below it are now also available as well in the calendar section as the now regular weekly Summary Perspective on Key Influences. We hope you find that useful as well. It also has the Concise Market View at the end.

For those of you who have not already seen it, there is a lot of emphasis again this week on the later part of the week. While beginning just a bit on Wednesday, the real intensity picks up from Thursday into Friday, with a twist…

 

2012/05/17: Fed more likely to step in. Does it matter?

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

It is one of those canards in the current equities market (and to a lesser degree economic) psychology that there is no more extensive QE (quantitative easing) at present by central banks outside of Japan. Nor is there any explicitly planned. Yet there could easily be more if conditions warranted.

This is a form of the central banks’ desire to both have their cake and eat it. Whatever one might call it (‘Bernanke Put’, etc.), the central banks have indicated that they are indeed ready to provide more liquidity if necessary due to deteriorating economic conditions or disorderly market activity.

Seems like a good way to underpin market psychology. Yet, will it really help all that much if the crunch returns? Frankly we’re skeptical. And the context of the FOMC minutes key passage yesterday highlights how the promise of easing or liquidity infusions in a crunch will not likely actually do much overall for the economy.

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…

2012/04/17: Quick Post: Weekly Calendar and Perspective Still Available

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

The full calendar is available through the link in the right hand column. The focused comments below it are already available as well in the calendar section this week as 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 tremendous focus on Thursday this week. Whatever happens prior to that, it will pale by comparison to the Spanish 10 year Obligaciones (government bond) auction. It is a binary decision: It is either going to be very good for the upbeat, bullish equities outlook if it goes well; or very bad if it goes poorly…

2012/03/07: Courtesy access to ‘Brief Update’ and extended discussion in new format

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

Short & Sweet on the specific market comments in this post, because yesterday’s TrendView Brief Update was also actually very brief for a change. That is because the equities key technical indications were very well crystalized for the sharp failure yesterday after such a long churn to the upside. And we are referring you back to yesterday’s analysis because the levels and psychology explored there for the March S&P 500 future remain the same for the critical late week period.

And one of the reasons we did not post to the blog during the highly active market swings yesterday was that we felt the more critical decision will be made in the late part of this week. Yet not necessarily solely upon the market response to the US Employment report. As we noted in the title of Monday’s post, “You better have ‘game’ prior to Friday…” (which was to say prior to Friday’s US Employment influence.)

And why is that? Because of all the factors we have covered previous on the more critical nature of the next phase of the attempt to address the European Sovereign Debt Crisis. That is something we have explored at length in previous analysis. Any of our regular readers should have been ready for the potential market dislocation under the influence of (finally) a more definitive deadline for at least the current attempt to defuse any immediate sharp failure of those European rescue efforts.

Which gets us to the other reason we were not available to add another post to our already extensive observations in that area yesterday morning. In addition to all of our highly active institutional analysis and sharing our background thoughts on the blog, we have resurrected a previous media role that allows for more extensive, open-ended discussion of those factors.

And I am very excited once again about…

2012/02/27: OGB Alive & Well and Perspective along with Weekly Calendar

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

Our full calendar is available through the link in the right hand column. There is also a bit more extensive than usual fundamental factor review this week. That is due to the ostensible finalization of a Greek debt deal now being approved by the German Parliament not seeming to affect trends to any great degree. If this is such a major success, why were the equities only marginally higher from Friday and stalling into resistance in the strong sister US once again?

And the OGB (Occupy Greek Budget) movement in Germany is on the move again. According to an excellent Financial Times article on that today, “German tax collection experts have volunteered to go to Greece…” Oh, Goody!! The discussion of has played down all of the acrimony since an earlier article reported on initial responses to similar suggestions in late January from Davos; especially note the comments elicited by the latter. Here’s the bottom line: Rigid implementation of agreed Greek reforms that include strict enforcement of tax regulations are the good intentions which are paving the path to Hell.

The ‘hawks’ seem oblivious to the degree to which Greece has already been the learning lab, and the lesson is that pro-cyclical austerity will not result in the narrowly calculated fiscal improvement. Even allowing it may be a necessary evil, as we’ve noted previous you’d think the folks who suffered the occupation of the Ruhr after WWI would be a bit more sensitive about how they went about proposing tax collection ‘assistance’. We all know how well that episode worked out.

Why doesn’t Greece just declare war on Germany? They could throw the contest after the first shot, and put in for ‘reconstruction’ support rather than try to cure such a hopelessly over-burdened balance sheet. (Please reference “The Mouse That Roared.”)

And now (just now this afternoon in the US) we have Standard & Poors downgrading Greece to “Selective Default” and that seems to mean some of the actual debt has dropped to “D” …for ‘Default’ due to the insertion of ‘collective action clauses’ on some outstanding Greek bonds.

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.

2012/01/12: ECB Supports the Reflation Trade

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

It is no doubt just a bit presumptive to take the communication from one monthly ECB press conference and infer there has been a significant policy shift. There were certainly many interesting aspects to president Draghi’s Q&A session today. However there was one focal point he revisited on several occasions that seemed to point toward the ECB becoming more Fed-like in its approach to the European Sovereign Debt Crisis and economy than anything that might have been attempted by his predecessor. And that is showing up in the markets in the form of the risk-on ‘reflation trade’ seeming to return over the past few days. On several fronts this would seem to be another example of the markets exhibiting technical trend decisions where the reasons only become apparent once the further information driving the psychology is available.

2011/12/19: Quick Post: Observations and Weekly Reports & Events Calendar Now Available

© 2011 ROHR International, Inc. All International rights reserved.

The full calendar is available through the link in the right hand column. This is such a robust week once again, it is impossible to include anything but a fraction of the major influences in an overview. Yet, key aspects will be those that relate to the continuing debt and fiscal reform problems in Europe and less so US influences that are as goofy in their way, yet not as influential at present.

In addition to the continued sharp influences from the attempts to address the European Sovereign Debt Crisis, there is also going to be quite an impact from important scheduled reports, communication from central banks and bankers as well as political events and news releases, yet with much lighter government debt auctions.