Home > Uncategorized > 2012/08/10: Quick Post: Courtesy Brief Update: “Rock and a Hard Place” Equities

2012/08/10: Quick Post: Courtesy Brief Update: “Rock and a Hard Place” Equities

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

Short & Sweet again on the specific market comments in this post, because today’s TrendView Brief Update is a pointed discussion of the significant clash of forces in the equities market. As we noted in Wednesday’s QE is the Opiate of the Perma-Bulls part 1a (part 2 to be provided soon), it has been a “bad news is good news” equities market of late. And Perma-Bulls seem to feel the worse the better, at least insofar as that increases the chances for additional central bank Quantitative Easing.

That would be the ‘rock’ that underpins the market. And yet the ‘hard place’ that both investors and short-term portfolio managers find themselves in is the now almost pervasive weak economic data. Even the recently Teflon Equities could not withstand the weak Chinese Export data today in the wake of their other weak data yesterday. All of which is only the further reflection of across-the-board weak global economic indications backlashing into China.     

And the other key aspect we keep a close eye on also reconfirmed those tendencies yesterday…

 

 

…in the form of Organization for Economic Cooperation and Development (OECD) Composite Leading Indicators (CLI) confirming pretty much the whole world rolling over into weaker tendencies. And this month’s indications were particularly telling insofar as they confirmed the shift to weakness noted last month for Japan, and most importantly the US. As the latter is supposed to be the engine which helps buffer weakness in the rest of the world, along with continued Chinese weakness that is just not good.

None of which means the equities will necessarily crumble right away, or the primary government bonds and US dollar will push-up markedly in the near-term. It is more of an intermediate-term backdrop, and timing and risk management will still be paramount in such a psychologically-driven market buffeted by such strong opposing views.

[As a final note, the OECD Composite Leading Indicators available through our Brief Update is one of the few English language versions available right now. Sadly the OECD has been having a sustained problem with their website since at least the time of yesterday morning’s CLI release. The link that normally defaults to display the English language version has only been able to display the French language version since yesterday morning. Along with our advisory clients and readers, we wish to thank the very nice individual in the Secretary-General’s office who was kind enough to e-mail us the English language version yesterday morning.]

General Market Observations and EXTENDED TREND IMPLICATIONS are briefly revisited in today’s TrendView Brief Update. The rest remains much the same as Monday’s Summary Perspective or Technical Projections (depending on the extent of your interest in the broader range of markets.)

Thanks for your interest.

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