GeoCapital Economics
Global Economics
Valuable Sources for supporting professionals in their decision taking for managing the complexity and uncertainties of the globalizing world economy to gain and sustain leadership and competitive advantage:
Recommended Readings for Knowledge, Strategy and Mind Set, and Real-World Cognition
- Global Economic Intersection
- Influential Economics - Ranking
- Global Economic Indicators
- Sober Look
- World Economics
- TradingEconomics
- Mauldin Economics
- Calendar - Economic Indicators
- IFC > Economies' Ranking Data & Trends
- Earth's Transformations
- GeoCurrents
- AskDefine Geostrategy
- Geography - Shaping History, Politics, Economics
- Economic Diplomacy
- The Market Oracle
- MarketWatch
- Macro Monitor
- CBS News
- FOX News
- Bloomberg View
- Global Market Update
- Capital Economics News (Bloomberg)
- Globalization
- Encyclopedia of Economics
- The Economist Economics
- The Economist Markets & Data
- The Economist Economics A-Z
- Human Development Index
- EC Economic and Financial Affairs
- Economic Policy and Commentary
- Yale Global Online
- World Development Reports
- World Review
- Economic Diplomacy
- Knowledge Management
- Finding the Flow
- Profile Books
- Global Luxury Report
- Reuter's Breaking Views
- Sober Look
- World Economics
- TradingEconomics
- Calendar - Economic Indicators
- The Market Oracle
- Spirit & Art of Governing
- Spirit Codes (in German)
WSJ Real Time Economics Categories
- Fed
- Credit Crisis
- Global
- Employment
- Business Cycles
- Consumption
- Trade
- Inflation
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- ECB
- Budgets
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- Economists React
Global Macroeconomics
- Chart of World Economic Outlook (IMF)
- World Economic Outlook (WEO)
- World Economic and Financial Surveys
- Economic Indicators
- Economics > Countries & Regions
- Countries Stats & Data
- Country Profiles
- Economics > Country News
- World Economics
- Economics > Countries & Regions
- Economics > Country News
- Economics > Countries - Credit Rating
- Macro Monitor
- Economic Indicators
- Global Economy
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- MarketQuotes
- MarketWatch
- BBC News
- FinancialNews
- BloombergTV
- TWSJ Global News
- TWSJ Market Data
- BBC Market Data
- ThomsonReuters
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- World Economics
- Economic Indicators
- Economics > Countries & Regions
- Countries Stats & Data
- Country Profiles
- Economics > Country News
- Economic Indicators
- USD Index Chart
- Bond Yield Charts
- Economic Calendar
- Macroeconomic Analysis
- World Interest Rates Table
- Financial.Com [Widget]
- Charts & Data For Mining
- Geopoliotics & Oil
- World Gold Council
- Gold Facts - A World Gold Council initiative
- Gold Mining Process - video
- Gold - Chart
- Gold Money Index – Chart and Prices
- Precious Metal Prices - Charts
- Gold Silver Prices - Charts
- Geopoliotics & Oil
- World Gold Council
- Gold Facts - A World Gold Council initiative
- Gold Mining Process - video
- Bond Yield Charts
- Foreign Trade online
- The Forex Market
- USD Index Chart
- Foreign Exchange Strategic Charts
- Bloomberg Market Data
- The Wall Street Journal Markets Data Center
- Oilprice
Seeking Alpha Analysis - Macroeconomics
- Discuss what the Fed could do that would be beneficial to commodity markets.
- Highlight how the ebola outbreak in West Africa is now forcing companies to delay exploration plans.
- Look at some of the upgrades and downgrades by analysts.
- We're never going to stop importing oil because supply diversity is prudent.
- Both oil and natural gas production in this country are the highest in about 35 years.
- There is an enormous demand for rig crews, frack crews and all the associated equipment and materials.
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- Look at yesterday's market action and whether the buying indicated a bottom.
- Discuss SCHW's decision to drop Pimco after the exit of Bill Gross.
- Highlight why GPRO was lower yesterday.
- The European Central Bank remains committed to further stimulus.
- Its accommodating policy should lead to increased lending and improved inflation readings in time.
- Until policy begins showing tangible results, it would be wise to avoid buying the currency or its ETF.
- A strong USD may be helping to weaken crude values, and in the process, this weakens the Canadian Dollar.
- There is going to be a period of explosive growth in the trade of liquid natural gas. Canada is not prepared to participate despite massive natural gas reserves.
- Is it possible the crude supply glut combined with tepid global demand will take the crude market 10/20 dollars per barrel lower?
- Mario Draghi disappointed markets in a downbeat speech that promised little to prevent deflation or increase growth.
- Markets fell hard around the world, with safe-haven buying of bonds, dollars which pushed commodities lower.
- My investment exposure has been shrinking since summer and getting more and more defensive, shorting gold at times. This is time to get defensive.
- Brazil dryness returns for coffee and no hope for rains for at least 2 weeks.
- Gold prices break major support.
- Stronger dollar pressures crude, along with a glut of global supplies.
- A strong dollar in the third quarter has been matched by EM currency weakness.
- EM economies with "cheap" currencies are already benefiting from better export growth.
- The strong dollar is spreading U.S. growth around the world.
- The attempt to correct the dollar lower fizzled out.
- Disappointing European service PMI provided new excuses to sell the euro and sterling.
- The US employment report may disappoint.
- There are several factors likely to push the dollar higher going forward. The greenback is no longer merely a cyclical safe haven, but a compelling story on its own.
- Chief among these drivers is the growing divergence in economic outlook, and monetary policy, between the US, Europe and Japan.
- A combination of slower global economic growth, and further appreciation of the dollar, should maintain significant headwinds for dollar denominated industrial commodities, and oil prices in particular.
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- Are commodities good forecasting tools for the stock market?
- Does weakness in commodities mean the economy is in trouble?
- Key S&P levels we are watching.
- Offshore drillers are in a bear market.
- Some offshore drillers are managing the downturn better than others.
- Drilling backlog can be used to forecast supply/demand and revenue scenario's.
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- Macroeconomic data suggests rates could justifiably be 100 basis points higher.
- However, a number of forces at play suggest U.S. Treasury rates will fall further.
- Despite current market volatility, expect one more rally for U.S. stocks and bonds.
- The U.S. oil production is slowly rising and is expected to gain over 12% by 2015.
- OPEC may cut its oil quota.
- The weaker than previously estimated demand for oil in Europe and China is slashing the gap between Brent and WTI.
- Brazil has made plenty of news over the past year. However, the most important development in Brazil this year has garnered almost no international attention: extreme drought.
- Historically, the main weather problem for Brazil's coffee farmers has always been frost. Few have had to deal with the consequences of prolonged heat and dryness.
- As consumers in the most populous countries of the world get wealthier and their palate expands, per capita consumption of coffee will rise - having an enormous impact on global demand.
- Natural gas supply and demand appear well-balanced, lending support to the Henry Hub stability thesis at ~$4/MMBtu.
- New takeaway capacity schedule in the Northeast Region defines the trajectory of natural gas supply, and is the key driver to monitor.
- Chesapeake sees no relief to the Marcellus North constrained situation in 2015, with gradual relief in 2016-2017.
- Finance and Economic officials continue to lower forecasts for economic growth, yet they see growth continuing for several more years.
- These forecasts imply that the American economy will at least achieve the second longest expansion in its history...even though one with extraordinarily slow growth.
- Just how long can this expansion continue? What will policy makers be able to do? How might this expansion stop? It might be a lot different than we have experienced.
- Investors prefer owning the equity now rather than owning gold.
- Investors should seek companies that are funded to generate significant catalysts going forward.
- Companies that are fully funded to production are less susceptible to changes in their equity prices in the near term.
- The Shiller P/E currently sits at 26. The last three times the level was above 25 were during the Great Depression, the tech bubble and the financial crisis.
- Solid GDP growth, low inflation and decreasing unemployment are uncharacteristic of those three periods suggesting that things might not be so bad this time around.
- The S&P 500 has gone almost three years now without a 10% correction - the longest such period in 100+ years of stock market history.
- We look for rates to move higher, given economic acceleration, the end of QE and seasonal step-up in Treasury financing.
- History has shown that the U.S. stock market continues to rise when 10-year Treasury yields begin to move higher, particularly in a low-inflation environment.
- Stocks are actually more likely to decline in an environment of falling interest rates, which often signals economic down-cycles.
- Ethanol has fallen out of grace in recent years. Should investors be excited about new developments in this once promising alternative fuel?
- Although ethanol has not replaced petroleum as the primary fuel source in the world, it has a widespread reach nonetheless.
- Unfortunately, the transition to gasoline blends containing higher levels of ethanol has sputtered in recent years.
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- Pessimism is at a three-month high, but is only above average for the 8th time in 12 months.
- Bullish sentiment is at its lowest level since early August.
- Small-cap stock performance is having a mixed effect on investor attitudes.
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- Sterling continues to closely track interest rate expectations.
- The heavier sterling tone coincides with ideas that maybe the BOE can push out the first hike until after the May election.
- We are skeptical about the partisan politicization of UK monetary policy.
- Indian markets are likely to outperform other emerging markets over the next 3-5 years.
- The growth and development push by the new government is likely to take GDP growth higher.
- India's GDP growth is likely to surpass China's GDP over the next 3-4 years, making India the hottest investment destination.
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- US Federal debt has surged to $17.6 trillion and the debt is likely to increase further.
- There is a diminishing impact of debt on GDP growth and more debt is unlikely to solve the growth issue.
- Unfunded liabilities ensure that Federal debt will continue to rise even if the economy is on a sustainable growth path.
- Increase in interest rates can create another problem from a rising debt servicing cost perspective.
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- Euro corrects higher in aftermath of Draghi's anti-climactic press conference.
- Little fresh information has really been gained.
- Worries about ECB will be expressed, but exaggerated as sub-investment grade instruments will be small part of purchases.
- Weekly corn sales were 638,000 MT, a 24% decrease from last week.
- Weekly net soybean sales were 869,100 MT, a 66% decrease from last week.
- Weekly net wheat sales were 741,100 MT, an 87% increase from last week.
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- A primer on the arguments pro and contra tightening monetary policy.
- Those who are in favor fear asset bubbles, rising wages and want to protect income from savers.
- Those who are against argue that rising rates risks the recovery, inflation is low, rates would be low in the absence of Fed expansionary policies and there is still considerable.
- As I predicted when it happened, the 2,000 level on the S&P 500 has proven to be a very stubborn resistance level for the market to breach decisively.
- The recent downturn in the market has accelerated recently due to some of the concerns I highlighted for investors in another column.
- These worries could remain for a while and the market started the fourth quarter with a thud. What I see ahead and how I am playing the market given these concerns.
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- The sharp market correction yesterday is likely to be the beginning of a sustained correction.
- Treasury bond yields and dollar index supports my view on market correction.
- The ECB meet today is unlikely to have a positive impact on markets and can accelerate correction on the contrary.
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- Discuss yesterday's market action in the oil market.
- Look at the news from Tesla yesterday and what rumors are currently in the market regarding potential new products to be released October 9th.
- Highlight the latest moves by Saudi Arabia to cut oil production and oil prices.
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- Argentina was declared in contempt of court after circumventing U.S. judge rulings on repaying creditors holding defaulted bonds.
- The country continues to show willingness to pay, but the conflict keeps on escalating.
- The solution might not come until early 2015.
- Despite the consequences, Argentine assets remain attractive.
- The market has begun to turn.
- Small cap stocks usually get hit first.
- The large cap stocks get hit afterwards.
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- Discuss the latest on the ebola case in Dallas, Texas.
- Look at the pullback in airline stocks caused by investors worried about ebola scaring passengers away.
- Highlight another company developing an ebola vaccine.
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- Do you remember Geithner and Paulson insisting that AIG pay banks 100 cents on the dollar on insurance claims?
- And do you remember that was done after AIG executives said they thought they could get banks to settle for 60 cents on the dollar?
- The Starr lawsuit against the US government for excessive penalties against AIG should provide some interesting new information on exactly what happened and why.
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- Disappointing US economic data and pullback in US yields have spurred a bit of a correction.
- Dollar-bloc and yen are benefiting the most.
- Shifting UK rate expectations may be taking a toll on sterling.
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- The Australian dollar is rebounding sharply from a poor reaction to Australia's August retail sales report.
- The forex trading action suggests a bottoming process is finally underway for the currency.
- Once again, how the Australian dollar trades against the Japanese yen may provide the key signal of a turning point in trading.
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- The progress in the labor market could play a role in bringing down GLD.
- The stagnation of the U.S inflation is also keeping GLD from making a comeback.
- The ongoing rise of the US dollar could keep pull down GLD.
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- Consumer confidence was just reported down sharply in September, thanks to all the scary news about ISIS, Ebola, Russia etc.
- However, consumer spending was just reported up in August 0.5% and GDP revised to 4.6% for Q2, so Wall Street need not worry about the economy on Main Street.
- That said, capital flow issues continue to haunt stocks in my view.
- There is a heated debate about confiscation.
- Let's look at history as a guide.
- Will it also affect your safety deposit boxes?
- In August, the US economy added just 142,000 jobs, the lowest boost to nonfarm payrolls since January.
- Analysts on Estimize are forecasting that the September jobs report due Friday will reflect a return to the 200,000+ jobs per month economy.
- If the Estimize community is correct, this would be the best month-over-month improvement since January.
- We are still in the second and longest stage of the gold bull market.
- Deflation everywhere, however, debt levels are rising everywhere.
- Central Banks around the world have given investors the illusion that all is well.
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- A recent trend in economic reports is concerning.
- The S&P 500 is testing an area where buyers have stepped up in the past.
- Market levels we are watching.
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- China had at least three major structural problems, an urban housing bubble, over-leveraged shadow banking and rampant corruption nationwide that could destroy a generation of record economic growth.
- Two recommendations that should benefit mightily from China are Deere and Ecolab.
- Amazon has been good to my subscribers and I still love its long-term perspective, but it looks more like a victim than potential beneficiary of a growing world.
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- Developed and emerging market stocks had a poor finish to Q3, and Q4 has begun off with more of the same.
- EM equities act like high beta versions of DM equities.
- Technically, there are further downside risks.
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- Asset allocation shifts are very subtle overall.
- Fixed-income allocations rose to an eight-month high.
- Stock and stock fund allocations declined to a four-month low.
- From 12/21/12 to 9/21/14 my Sustainable Energy Portfolio is up 192%.
- My Fossil Fuel reference portfolio is up 13.5%.
- The Dow Jones Industrial Average is up 32.0.
- The S&P 500 is up 40.6%.
- The Sustainable Energy Portfolio crushed the indices while the Fossil Fuels underperformed.
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- Discuss the situation in Brazil and why those big commodity companies are facing downward pressure exceeding that of peers here in North America.
- Highlight two energy names which look attractive around these levels.
- Look at commodity markets and explain why some of these markets may be close to bottoming out.
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- September marks the beginning of harvest and has been a slow start for the Corn Belt, due to the slow progress of corn maturity.
- Grain prices continued to decline through the month of September due in large part to the estimated record domestic production for corn and soybeans and global production for wheat.
- The Creighton University farmland price index contracted for the third consecutive month moving from 41.4 to 33.7, its lowest level since February.
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- The ABS and covered bond purchase program is the main focus of the ECB meeting.
- Some will be disappointed with the lack of a sovereign bond buying program.
- Part of the problem is that what ails the euro area might not be able to be addressed by monetary policy.
- Throughout history, gold stocks have carried exceptional risk that has departed from popular notions of safe haven status.
- Declines of -10% in the Dow Industrials usually translate into greater declines in gold stocks.
- If timing is the key to the purchase of precious metal stocks, some established indicators have failed since 2007.
- Investors viewing the stock market as overvalued and poised for a decline should reconsider investing in precious metal stocks.
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- China's dynamics have been disturbing markets.
- China's industrial output slowing to 6.9% troubles the markets when analysts expected an 8.7% rate. This metric combines with 30 months of deflationary Producer Price Index numbers.
- The nature of China's economic growth relies on local governments and therefore China's corporate debt.
- Local governments were expected to supply the lion's share of a $4T stimulus package in 2008.
- Now, local government debt combines with corporate debt and is unsustainable when growth slows.
- The U.S. Dollar is rising and should continue to increase across the board.
- For investors, the correlation regime with U.S. Treasuries matters a lot.
- Between 2011 and 2013, a stronger dollar would come along with lower U.S. Treasury yields.
- The sign of the correlation has changed since: a stronger dollar will bring along higher U.S. Treasury yields.
- I don't expect any change in the correlation regime before the Fed starts hiking next year.
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- We have two different markets for gold: One is an honest market for physical metal; the other is a less honest paper market.
- We must distinguish between those gold ETFs that are honest and those that might not be so honest.
- I can't imagine we won't see a major breakdown in the global financial system within a year from now.
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- Discuss general market issues facing investors right now.
- Look at the news that the ebola virus has reached US shores.
- Highlight biotech and drug companies which could benefit if their vaccines are used.
- There are occasions when the market detaches from its true value. This can occur due to various external forces such as overexcited investors, or fads that promise to change the world’s landscape (the internet, Facebook).
- We believe that the stock market is presently overreaching its real value.
- This month we will review indicators that assess sentiment and margin within the marketplace.
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- The key driver of the dollar is not a change in Fed expectations.
- German manufacturing PMI slips below the 50 boom/bust level.
- Dollar-yen pokes through 110.
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- West African cocoa production makes up about 70% of total global supply.
- Ivory Coast and Ghana which account for 60% are still unaffected by the outbreak directly, but border closure is affecting worker flow to cocoa farms.
- If the area's production is completely disrupted, there is opportunity in the cocoa commodity as well as great risk to many companies that use it as ingredient.
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- Silver Wheaton has outperformed other silver investments in recent years.
- The company’s type of business allows it to expand its core business at a fast pace.
- Silver producers such as First Majestic Silver offer other relative advantages over Silver Wheaton.
- 1% decline missed Wall Street forecast of a .8% rise.
- Pending sales dropped despite lowest mortgage rates in a year.
- Latest Conference Board survey suggests that plans to buy a home lowest since Feb 2012.
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- The United States saw its first diagnosed case of the Ebola virus in Dallas on Tuesday.
- Despite minimal risks of spreading, it remains worthwhile to closely examine the effects from an ebola outbreak starting to spread in the U.S.
- Markets have shown resilience during past pandemics, but the nature of this virus is different than those that have come before.
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- The S&P 500 Index was higher once again for the third quarter.
- Yet every other major asset class outside of U.S. large cap stocks was down for the period.
- Stock performance even within the S&P 500 Index was spotty at best.
- The time may soon be here where investors are once again rewarded for carrying out a thoughtful and deliberate portfolio construction process.
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- USD/JPY has broken out of major resistance of 105.
- Outside of technicals, weak macro environment in Japan also a downward catalyst for Yen.
- Monetization is only solution to resolve Japan's debt crisis.
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- Once key interest rates rise again around the globe, Japan will find it hard to keep its domestic interest rates levels near zero. Domestic investors need higher yields.
- Japan's debt/GDP levels are not sustainable, especially once interest rates rise. Japan would have to use huge portions of its tax revenue to just cover the debt interest payments.
- Current account deficits and Japan's demographics (aging population) as well as moves by major central banks (rising interest rates by the FED) could trigger these debt events between 2015-2020.
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- Zero percent interest rates is the new normal.
- Even if the Fed talks higher rates, they know that they can't without crashing the so called recovery.
- When rates do rise, it won't be by choice, and the results won't be pretty.
- A chessNwine article prompted this thought on the relative weakness of junk bonds and small caps.
- This weakness along with breakdowns among the "frothies" may be a harbinger of major market trouble.
- There is another explanation, however. Junk and small caps are both radically overpriced in a way that can't be disguised, and investors may simply be acting rationally.
- If so, the large cap market, which is modestly expensive, may continue on its own path, whatever that turns out to be.
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- Soybean stocks were reported at their lowest level in modern history at 92 million bushels.
- USDA reported 1.24 billion bushels of old crop corn on hand for September 1, 2014, a 50% increase from last year.
- Wheat stocks were reported at 1.91 billion bushels, a 2% increase from last year. Stocks stored on-farm totaled 722 million bushels, a 30% increase from last year.
- Volatility in foreign exchange market as investors flee euro and yen for liquid U.S. dollar.
- Euro and yen hitting multi-year lows. Inflation picking up outside US.
- US dollar seen as temporary safe haven. Could the US dollar be the next currency to decline?
- Precious metals and junior miners trading at historic discounts should be considered as an alternative to fiat currency.
- Deflations set the stage for hyper-inflations.
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- Recent reports of housing's demise have been greatly exaggerated.
- Pending Home Sales, while hyped by reports to be showing real estate decline, is actually trending higher and at its second highest point this year.
- Real estate relative stocks have mostly suffered through September and are worthy of inspection and prospection here. Physical real estate investors can rest easy as well.
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- Monetary Policy has supported asset prices for years.
- Monetary Policy has officially changed.
- Does that mean we should control our risk again?
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- A common theme was present in Tuesday’s economic data.
- The market’s indecisive state calls for tighter risk controls.
- Bull and bear levels of note.
- US equity market valuations are among the highest on record, when measured by metrics that correlate strongly with long-term returns.
- Despite the "can't fight the Fed" mantra, monetary largesse is not prophylactic against bear market declines.
- The combination of extreme valuations, coupled with deteriorating market internals make it advisable to reduce U.S. equity exposure.
- Chicago Fed President's Monday speech on monetary policy.
- Measuring the effects of ultra-low policy rates.
- Market implications for an extended continuation of current policy.
- The volatile month of October.
- The contrarian methodology.
- Why a contrarian would choose gold and stocks.
- Believing the Bernanke Dollar is a good contrarian bet involves tremendous cognitive dissonance.
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- Discuss the current state of the uranium market.
- Look at natural gas prices and how the chart is setting up for a possible breakout above the $4.20/MMbtu level.
- Highlight India's plans to expand their nuclear power generation capacity.
- While a potential merger between CF Industries and Yara could be a win-win situation for both companies, I have some concerns about CF Industries and the U.S. nitrogen fertilizer industry.
- The nitrogen fertilizer industry in the U.S. has benefited from the shale gas boom.
- The industry though now faces threat from rising exports from China.
- The industry also faces rising competition and the nitrogen market could turn fundamentally imbalanced by 2017.
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- The US monthly trade balance has been remarkably steady over the past couple of years.
- US runs a surplus with countries it has a free-trade agreement with.
- Yet the US does not primarily service foreign demand by exporting, but by building and selling locally.
- The price of money adjusts much quicker than the price of goods.
- Brent Crude down sharply over last few months while Henry Hub natural gas remains buoyant.
- However, most natural gas producers are down along with the oil names.
- This creates an opportunity to pick up high-quality natural gas producers.
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- It was an interesting third quarter as the market struggled despite better than expected earnings results for the second quarter.
- Small and midcap stocks suffered losses in the quarter and new worries were adding to investors' growing list of concerns.
- So as we enter the last day of the third quarter, what lies ahead for equities in the fourth quarter? My four predictions for the next quarter are outlined below.
- Since 2008 we have learned two important things about the relationship of money supply and inflation.
- An elevated money supply is now and always will be an inflation risk.
- In a market with stocks at or near record prices certain commodity companies may provide opportunity for the fearless investor.
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- Discuss EBAY's announcement today that they will spin-off the PayPal unit.
- Highlight the profit taking occurring in FNMA and FMCC shares after very large moves higher over the past two years.
- Revisit two winners and discuss what name we would focus solely on moving forward.
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- Soft euro area core CPI sends euro reeling.
- Yen data mixed, but key industrial output and household spending were poor.
- Scandi bloc goes bid.
- Soybean, corn and wheat prices made new lows again this week.
- At current price levels, small farmers need to consider substitute crops for next year.
- There is a very profitable cash crop in the US.
- A long-term inter-commodity spread to consider.
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- A new report by the International Center for Monetary and Banking Studies has a new warning about the world's debt situation: world debt is still rising in relation to GDP.
- Economic growth is slowing in some areas while others are in process of raising interest rates; both threaten to make the debt situation worse.
- All solutions seem to be problematic in one way or another. Investors need to consider the consequences of each of the policy choices available.
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- Key petroleum spreads tell us a great deal about market fundamentals, and increasingly, the participation and flow of new capital into energy markets.
- The deterioration in distillate values matches a deterioration in distillate balances on both a US and global macro basis.
- It is however way too early to write off distillate completely.
- While oil markets wait on winter, capital flows will likely have a greater impact on oil price structure, market mood and important oil spread relationships.
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- The current tightness in lending.
- Prices versus income.
- Outlook for the future.
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- Corn conditions were estimated by the USDA at 74% in “Good” or “Excellent” condition, unchanged for the past four weeks.
- Soybean conditions were reported at 72% of the crop in “Good” or “Excellent” condition, a 1% increase from last week.
- Spring wheat harvest was reported at 94% complete, an 8% increase from the previous week, but 2% behind the five-year average.
- Shiller’s CAPE ratio can be used for long-term equity market expected returns.
- CAPE is currently higher versus the historical average, but this should not be used to predict a market top.
- Comparing CAPE to a simple trend-following strategy for market timing: value versus momentum.
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- This is an important week for the market's intermediate-term trend.
- As economic data improves, concerns about an interest rate event remain.
- Two important calendar items may set this week's tone.
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- The perfect storm of factors are at play this week to bring volatility to trading and possibly even cause a stock market correction.
- Fiscal year-end for many institutional money managers, the critical Employment Situation Report, and the serious threat of ISIS driven terrorism has already stirred market volatility and threatens to all week.
- Suggesting investors avoid the SPDR S&P 500 (NYSE: SPY) or surf the volatile waves with a straddle strategy on the SPY or via stakes in volatility ETFs.
- Gold and silver see heavy shorting.
- Gold and silver demand surges.
- Gold and silver premiums rebound.
- There is prior research in the area of measuring how a commodities pricing might impact the pricing of equity markets - specifically oil and the S&P 500.
- A regression model is constructed to measure the relationship between oil over the last ten years (2004-2014) and is presented here.
- It would appear that roughly 30% of the change in oil can in part explain the change in the S&P 500.
- Based on this model, the current pricing of the market (or the S&P 500) appears higher then the level that the current price of oil might suggest is normal.
- In Japan, there is general optimism for a steady economic recovery, with a prevailing sense of confidence in reasonable valuations and a low bar for incremental improvement.
- Companies that can take advantage of global business opportunities look far more attractive than those simply waiting for a rising national tide to lift their boats.
- A re-allocation towards riskier assets from the national pension funds and insurers would create very large inflows to Japanese equity markets.
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- Look at the recent price movements in the energy market, focusing on oil.
- Discuss ECA's purchase of ATHL to increase their oil and liquids production and get exposure in the Permian Basin.
- Highlight other names in the E&P space which could be attractive takeover targets for companies wanting more oil production in their portfolio.
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