Home > Uncategorized > 2012/11/27: Quick Post: Weekly Calendar and Weak Macro View

2012/11/27: Quick Post: Weekly Calendar and Weak Macro View

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

The weekly Report & Event Calendar is available through the link in the right hand column. The Summary Perspective will available soon. Yet there is also an interesting anomaly in the fundamental influences. And it is not just the strongish US economic data versus the trepidation over the potential plunge off the Fiscal Cliff… there is also the negative outlook into next year.

Some would like to believe that the US election settled enough ‘uncertainty’ to encourage an economic revival on the back of clearer parameters. In fact, nothing could be further from the truth, as the pending legislation enactment (Obamacare in particular along with tax increases) and regulation acceleration (EPA takes on anything exuding carbon) in the US is going to be daunting for business. Wait until Obamacare foments the major cancellation of group healthcare plans at myriad small and mid-sized employers.

It’s good old Nanny State Taxulationism1 finally run amok, as the President and his cohorts distract the opposition with even more outrageous proposals to distract them from unwinding what’s already the law of the land. The questionable nomination of UN Ambassador Susan Rice for Secretary of State after her misguided or purposely misleading statements on the Benghazi tragedy comes to mind.

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

Def.: Combined impact of taxation, regulation and protectionism to an oppressive degree as official policy   

And the degree to which 2013 is going to be a tough year has not escaped the watchful eye of the better macro-economic observers…


…like the OECD. It’s latest global Economic Outlook released this morning was more downbeat than expected. Not only is Europe going back into recession that affects the rest of the world, but we feel its assessment of the US is very charitable in light of the self-inflicted headwinds being created over here. And there is a page on their site that offers a brief note with a link to the full 1:15 press conference with slideshow, and a very concise video as well.

And while many people are talking up the various improved economic data points to purport there is a ‘self-sustaining’ US recovery about to take hold, the likely further expansion of top line growth necessary for that to occur is problematic at best. And among our fellow Cassandra’s (isn’t a contradiction in terms?) is none other than Zero Hedge’s Tyler Durden. One of his latest compilations of thoughts and graphs is most interesting on the key factors that lack any sort of acceleration (or even maintenance) of the current weakish US economic growth.

Even allowing that graphs are visual representations of statistics, and Samuel Clemens’ (aka Mark Twain) observation on them2 likely holds true, it is a most interesting set of economic graphs that seem to tell a much more downbeat tale. As he sums it up, all debt and consumption is based on income… and the signs are not propitious.

2“There are three kinds of lies: lies, damned lies, and statistics.” -attributed to Benjamin Disraeli, but popularized in the US by Clemens.

General Market Observations

All of the technical trend aspects remain very similar to our observations last week, with special emphasis on the top of the rally December S&P 500 future decision to stall into the low 1,400s a key sign things may be rolling over again to the downside. Given that the Fiscal Cliff negotiations may turn more productive at any time, the equities might turn up in a more sustained manner at any time.

However, on current form it more likely will (and in fact very likely needs to) drop to lower levels to focus the minds of the US political class. The key interim level this side of 1,350 is once again the same 1,389-87 that was the post-election critical level. Now it is also last Wednesday’s pre-Thanksgiving Close prior to Friday’s gap higher, and that gap is yet to be filled. Whether it Closes below it once again will be a key factor in whether the market is ready drop back down to 1,350, or might hold up better this time on anticipation the Fiscal Cliff dive will be avoided.  

So the perverse context  right now is that we are near term bearish of December S&P 500 future while still expecting it will surge well above 1,400 on the relief rally once a Fiscal Cliff avoidance deal is cut. When a client asked about this seeming contradictory perspective, all we could say is that we are like the doctor who expects the patient to achieve better health in the intermediate term. Yet we need to monitor any short term ‘stroke ‘he might have along the way. That’s pretty much now the equities look to us right now.   

Thanks for your interest.


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