2012/05/22: Quick Post: Weekly Calendar and Perspective still 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 Wednesday and especially into Thursday… with a much lighter reporting/influence day on Friday. However, as opposed to last week’s clear focus on the negativity generated by the potential Greek expulsion/departure from the Euro-zone, it’s a somewhat more balanced perspective as we head into the informal European summit tomorrow.

Can they really craft the sort of hybrid approach outlined at the G8 meeting that blends the further growth encouragement into the necessary fiscal rebalancing? It’s going to be quite a balancing act, and there are no small numbers of fiscal purists who might act as bomb throwers. While the Left-leaning governments on Europe’s periphery are all for it, the idea of greater funding for supranational organizations splashing out spending across the weaker portions of peripheral Europe is not necessarily a new idea.

In fact, that has already been articulated today…

 

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.

2012/05/14: 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 now 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 Wednesday into Thursday this week. However, as opposed to last week’s clear focus on the data, it’s all about the facts on the ground out of Europe this week. After Wednesday’s FOMC minutes, the subsequent government bond auctions right into a European holiday on Thursday will surely be a bellwether for success or failure of any extended plans to stabilize the Euro-zone situation…

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…

2012/04/25: Waitin’ on the Fed: Highlights and Headwinds… which will win out?

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

The FOMC rate decision and statement, Fed staff and member forecast revisions, and Chairman Bernanke’s press conference are alleged to be a major driver for the markets later today. Forget about it. It’s going to be more of the same, even if it is a supportive factor. It will be no surprise of the net focus will be continued improvement in US growth, even if at a slower pace than the Fed would like. More blame and derision will likely be (rightfully) heaped on the ineffective US administration and Congressional response to the problems in employment and housing. That is ultimately linked to the uncertain business environment regarding taxes, regulation and a bit of protectionism: Taxulationism(1) still rules. Yet, after all that only one thing matters…

There is still a ‘Bernanke Put’ ready to be implemented if necessary. There will almost certainly be a lack of any overt commitment to further immediate QE (quantitative easing.) That will be a disappointment to the aggressive bulls who would like to see the Fed continue to juice the economy and equities market (along with other risk assets.) However, that famous a cappella group Benny and the Doves are still singing the same tune: the Fed is prepared to step in if conditions should deteriorate. Voilà… the ‘Bernanke Put.’

And in spite of those two highlights, further central bank support may indeed be necessary at some point. It was most interesting that the equities Closed lower last Thursday in spite of 18 out of 18 corporate earnings announcements beating estimates. That was due to the increasing headwinds that are appearing from many macroeconomic quarters…

(1) Taxulationism © 2010 Alan Rohrbach & Jack Bouroudjian. All international rights reserved unless explicitly waived

2012/02/01: 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.

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 in govvies even if the US Dollar Index failed last week.

Adding to the somewhat perverse “it’s all going up together” psychology (except the US dollar) right now is the strength of Gold once again and resilience of Crude Oil, which would not normally accompany the combined overall up trends in equities and govvies.

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.

2012/01/12: ECB Supports the Reflation Trade

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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.

2012/01/10: Quick Post: Courtesy Access to Rohr Report Brief Update Today

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

Short & Sweet. March S&P 500 future gapping above its high-end resistance Tolerance at 1,280.90 this morning is truly impressive. Unless it can find a reason to drop back below it by the end of the week, the next stop is likely 1,310. Yet both govvies and the US dollar remain firm on their near term downside reactions, at least so far. This reflects the skepticism other asset classes had already been exhibiting on overall resolution of European problems, and even the global economy in spite of recent improvements in economic data.