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Posts Tagged ‘QE2’

2012/09/04: Quick Post: Weekly Perspective now available… HUGE European focus

September 4, 2012 Leave a comment

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

Very short and sweet today, because all of the perspective is still much the same as our expectations last week that Jackson Hole was going to be more style than substance. And Mr. Bernanke certainly confirmed all of our expectations that while the Fed may still ‘do something’, it will likely be less influential in the real economy than in the risk asset psychology. His defense of the previous rounds of quantitative easing (ostensibly QE1 and QE2) was eloquent, and might have even had some merit.

Yet even many of those who believed those efforts were necessary at much lower levels in the equity markets allow that further liquidity infusions might accomplish little more than a further escalation of commodity prices. And that would not even help equities very much. And in any event the greater risk or redemption likely rests with Europe now that the specifics of any rescue effort must soon be more clearly articulated.

That is exactly the sort of focus we have concentrated upon in this week’s Summary Perspective on key influences, available through the link in the right hand column. It joins yesterday’s Weekly Report & Event Calendar.

It still gives due credit to ECB President Draghi for the masterful “do whatever is necessary” to save the euro ‘spin’ he placed upon the late-summer phase of those negotiations.

And yet…

 

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2012/07/17: Quick Post: Weekly Calendar and Perspective still relevant into Mr. Bernanke today

July 17, 2012 Leave a comment

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

In all humility, our assessment of why the equities would strengthen and other asset classes would behave as they have into the Bernanke testimony today has turned out pretty much as expected… At least so far. 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 Summary Perspective on Key Influences. We hope you find that useful as well.

It contains an opening discussion of why Mr. Bernanke’s little chat at the Senate today is a pivotal influence for the first part of the week. Of course, that includes the degree to which anticipation of some sort of additional quantitative easing (or liquidity expansion by any other name) is an issue the Democratic members are going to push into this political season. And yet, there are quite a few good reasons why the Fed Chairman will more likely demure.

Which is more critical than usual for the first part of this week because…

 

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2012/07/16: Quick Post: Weekly Calendar and Fresh Tech Now Available

July 16, 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 are already available as well in the calendar section this week as well. The Summary Perspective on Key Influences will be posted later this evening, and we hope you find that useful as well.

 

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2012/06/20: Quick Post: Weekly Calendar and Perspective still relevant

June 20, 2012 Leave a comment

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

In all humility, our assessment of why the equities would strengthen and other asset classes would behave as they have into the FOMC meeting today has turned out pretty much as expected… At least so far. 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 Summary Perspective on Key Influences. We hope you find that useful as well.

It contains the opening summary of why European and central bank influences were going to underpin the equities in the first part of the week. It also has the Concise Market View at the end, which points out the key levels for the equities that are probably also the overall driver for market psychologies in the other asset classes.

Not the least of which is…

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

May 17, 2012 Leave a comment

© 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.

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2012/05/11: Better headline global economic data could be highly ‘specious’

May 11, 2012 Leave a comment

© 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…

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2012/04/27: Quick Post: Bifurcated market psychology again: Govvies and Equities both strong

April 27, 2012 Leave a comment

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

In its way, it’s nothing less than breathtaking. The tremendous resilience of the govvies (at least the primary markets) in the face of the equities seeming to get back on track yesterday is impressive. Let’s allow that each of these asset classes is on a bit of a correction from recent highs. Even so, the degree to which govvies have maintained their overall bid while equities have rallied so strongly since the first of the year is quite a phenomenon. Maybe it is all just a reflection of the massive global central bank liquidity infusions and low interest rates; and that is causing investors to chase yield wherever they can find it.

However, there is very possibly another macro-technical factor at work: a classical corporate earnings announcement season split influence. That is to say positive earnings driving equities buying. At the same time troubling real world economic and political news causes other funds to seek the safety of the primary government bond markets. And that is more so typical of the short term cycle. As such, it is less surprising than might otherwise be the case. We have seen it before, and the operative question is, “What happens next?

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

April 25, 2012 Leave a comment

© 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

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2012/04/09: Courtesy ‘Market Alert’ from Friday… Back in tomorrow

April 9, 2012 Leave a comment

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

Short & Sweet on the specific market comments in this post, because we are out today with the UK and Europe. That said, Friday’s TrendView Market Alert was also a view on some very interesting influences coming up early this week. Might this possibly be the beginning of a more substantial significant trend reversal in equities? That’s quite a bit more problematic into the beginning of a new quarter and the June S&P 500 future only dropping to initial support at 1,375-67 so far. 

And without a new trading high of any substance last week (i.e. only marginally above the previous week’s 1,415.50), there is not even a bona fide pattern top in place. While across time the equities might still be topping out, the seasonal phase and significant support below the market indicate any major trend reversal will most likely occur on a ‘trading’ basis. There will more likely be some further filling out in a more convincing top between the mid-1,300 and low-1,400 area than any further sharp capitulation.

That said, there are a couple of wild cards out there.

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2012/04/03: Just Do It vs. Triple-E

April 3, 2012 Leave a comment

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

Whatever the other asset classes may be doing, it is a very interesting equity markets right now. And spite of some still formidable tail risks on Europe and the like, the market does have reasons to be encouraged. As we noted in our formal research, this week sees the information equivalent of carpet bombing by the liquidity infusion-oriented major central banks.

For those who’ve been reticent about diving into the equities since the first of the year, there seems a compelling (Nike-inspired) “Just Do It” imperative to not miss the further appreciation. And various factors this week would seem to support the idea the equities will find encouragement from quite a few quarters. After FOMC minutes this afternoon, it’s the ECB meeting and press conference tomorrow, all followed by the Bank of England meeting and somewhat limited statement on Thursday.

What we know for certain is moderate (Goldilocks “not too hot, not too cold”) US growth was highlighted again in the FOMC minutes. That will be seen as constructive, while allowing (‘50s pop group) Benny & the Doves to maintain further QE (quantitative easing) potential. Even if that was played down in the minutes, the rate hike horizon being pulled forward to late 2013 somehow does not seem much of a threat. The perception remains QE will be implemented if the economy weakens. There is still a ‘Bernanke Put’ out there.

There will also likely be another upbeat ADP Employment Change report tomorrow, driving bullish anticipation for Friday’s US Employment report. So after relatively constructive global Manufacturing PMI’s and other economic data, the only question becomes why aren’t the equities stronger?

It seems that on both the data and the central bank influences a June S&P 500 future that Closed yesterday above the 1,400-07 resistance for the second time in the current rally should have been doing better. Might it be that there are some broadly acknowledged tail risks out there, even if they are not dominant at present? Maybe it’s the Triple-E threat!

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