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Stocks Slump and the Dollar Slides as Market Concludes Fed is Mistaken

December 20, 2018
Overview:  Once again the US equity market failed to hold on to even minimal upticks.  The sharply lower close spurred follow-through selling in global equities.  Few have been spared the wrath of investors who apparently were disappointed with the Fed and its reluctance to consider stopping the balance sheet unwind.  The US benchmark 10-year yiel…
Stocks Slump and the Dollar Slides as Market Concludes Fed is Mistaken Stocks Slump and the Dollar Slides as Market Concludes Fed is Mistaken Reviewed by Marc Chandler on December 20, 2018 Rating: 5
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Purchasing Power Parity Shifts in 2018

December 19, 2018
Nearly every investment strategy seems to fall in one of three buckets.   There is trend-following--go with the underlying direction of prices--and its opposite, mean reversion, look for the trend to be reversed.  Lastly, there are arbitrage strategies.  We would put carry trades, where a low yielding currency is borrowed to finance the purchase …
Purchasing Power Parity Shifts in 2018 Purchasing Power Parity Shifts in 2018 Reviewed by Marc Chandler on December 19, 2018 Rating: 5
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The Fed's Paws may Still Unsettle Investors

December 19, 2018
Overview:  The failure of the S&P 500 to sustain even modest upside momentum yesterday is keeping traders on edge today, though another attempt on the upside is likely.  Asian equities were mixed, with Chinese and Japanese shares lower.  The Nikkei closed below the 21000 support level.  European shares are struggling to hold on it early gains,…
The Fed's Paws may Still Unsettle Investors The Fed's Paws may Still Unsettle Investors Reviewed by Marc Chandler on December 19, 2018 Rating: 5
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Stock Rout Deepens, Casts Shadow over Holiday Spirit

December 18, 2018
Overview: The 2% slide in the S&P 500 to new lows for the year yesterday hit Asian and European equities today.  Bond yields are lower, and the dollar is softer against most major currencies.  The dramatic equity losses and some disappointing data sparked doubts about the ability of the Fed to raise rates tomorrow at the conclusion of its last…
Stock Rout Deepens, Casts Shadow over Holiday Spirit Stock Rout Deepens, Casts Shadow over Holiday Spirit Reviewed by Marc Chandler on December 18, 2018 Rating: 5
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Markets Quiet to Start Fed Week

December 17, 2018
Overview:  Activity in the global capital markets is subdued as investors move to the sidelines as the year-end approaches.  The Federal Reserve headlines the holiday week that also features a Bank of England a Bank of Japan meeting.  Only the Fed is expected to change rates. The dollar, which rose against most currencies last week, is a little so…
Markets Quiet to Start Fed Week Markets Quiet to Start Fed Week Reviewed by Marc Chandler on December 17, 2018 Rating: 5
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Dollar Benefits from being Less Ugly

December 16, 2018
The US dollar rose against all the major and most of the emerging market currencies last week.  The Dollar Index made a new marginal high for the year.  Although US jobs growth disappointed in November and the flash Markit PMI and manufacturing output was weaker than expected, poor data abroad helped underpin the dollar by default.  UK Prime Mini…
Dollar Benefits from being Less Ugly Dollar Benefits from being Less Ugly Reviewed by Marc Chandler on December 16, 2018 Rating: 5
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FOMC Dominates Week Ahead Calendar

December 15, 2018
The last FOMC meeting of 2018 is at hand.  After hiking rates three times in 2017, the Fed signaled that four hikes were likely this year and with a widely expected move on December 20, it would have fully delivered, though many steps along the way, skeptical investors had to be led by the nose, as it were, to minimize the element of surprise.  
Th…
FOMC Dominates Week Ahead Calendar FOMC Dominates Week Ahead Calendar Reviewed by Marc Chandler on December 15, 2018 Rating: 5
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Week Closing on a Disappointing Note

December 14, 2018
Overview:  A string of disappointing economic is spurring risk-off sentiment today.  Global shares prices are being punished and core bonds are being snapped up.  The US dollar is trading higher against most major and emerging market currencies.  The MSCI Asia Pacific Index was flat on the week coming into today's session.  Many of the large m…
Week Closing on a Disappointing Note Week Closing on a Disappointing Note Reviewed by Marc Chandler on December 14, 2018 Rating: 5
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May Survives but its Draghi's Day

December 13, 2018
Overview: There is a sense of optimism among investors today that may be tested as the session progresses.  News that China may reconsider its "Made in China 2025" initiative as an apparent concession to the US while reports suggest it has bought 1.5-2.0 mln tons of soy is easing trade tension fears.  UK Prime Minister May survived a vot…
May Survives but its Draghi's Day May Survives but its Draghi's Day Reviewed by Marc Chandler on December 13, 2018 Rating: 5
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