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Posts Tagged ‘ISM’

2012/10/01: Quick Post: Weekly Calendar available and QE influence still a factor

October 1, 2012 Leave a comment

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

The weekly Report & Event Calendar is available through the link in the right hand column. The Technical Projections and Select Comments from late last week are also available and still relevant. This week’s Summary Perspective on Key Influences will be posted later this evening, and we hope you find that useful as well.

As is typical of the first week of the month, it is going to be a heavy data week all week, and that began today with Global Manufacturing PMI’s. Continued disappointment with Asia (including Australia) and Europe was offset to a fairly interesting degree by the better-than-expected US ISM Manufacturing. However here as well, there was some bad news…

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2011/10/05: QuickPost: The Fed, Jobs, Housing and Europe

October 5, 2011 Leave a comment

Much remains the same as yesterday in terms of the negative influences. And in our view those emanating from the US will count for even more of the future weakness in the intermediate term than the obvious headline focus on Europe.

Which is a bit of a radical view in light of the increasing social unrest response to draconian austerity measures in Greece. There are also the problems at the banks that have been highlighted by the problems at Dexia, leading to an admission by the European powers-that-be that just possibly banks which hold a significant amount of underwater sovereign debt are indeed going to need recapitalization; which is to say further significant support from the state.

Even in light of that admission being welcomed by the markets in the form of yesterday’s US equities late session sharp recovery from new lows, so far this is just so much talk. That said, getting back to sharply higher on the day from much lower did establish important technical bottoms for US equities (more on that below.)

However, all that still leaves the question that we have asked many times before: does crisis mitigation necessarily amount to a restoration of global growth that will be truly positive for economies and equity markets? And commensurately burdensome for government bond markets and the US dollar?

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2011/09/20: Operation ‘Twisted’ …Does Fed Matter When Risk Model Now Greece-On/Greece-Off? Does Greece?

September 20, 2011 3 comments

It seems an awful lot of attention has been focused on whether the Fed is going to either announce or actually initiate Operation Twist in its post-interest rate (non-)decision statement on Wednesday. Certainly there are some forms of ‘twist’ that matter. Chubby Checker helped destroy American social mores in the 1960’s with the dance. And who doesn’t like one near the end of a good suspense story?

By comparison the Fed’s plan to move some of its balance sheet from short-dated Treasury securities out into the 30-year Treasury bonds is likely to have about as much impact on the US economy as the QE2 liquidity infusion… which is to say, not much. And in this case it does not even provide that additional liquidity, which at least repaired portfolios through risk asset inflation.

It’s the macro-financial equivalent of distracting the masses with shiny objects. Not a single person who does not meet credit standards will get a loan, and no more than a very few businesses will create an additional job. And it holds certain deferred risks in the form of extra upward pressure on government borrowing yields once the economy actually turns up.

Much more impact will be felt from any Greek default, or the ability to once again avoid default (at least temporarily.) Everyone knows that is the driver for the current extreme volatility of equities, and government bonds’ resilient ‘haven’ bid for the past couple of months; recently joined by the US dollar. And even those uplifting “Greece-on” phases bring less and less weakness to government bonds (i.e. higher yields) for one good reason:

It’s the global economy!! Don’t take our word for it… ask the OECD.

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