The last two day’s mkt violence blamed first on Spain’s unfortunate encounter with Moodys, then EU contagion as spreads for the likes of Ireland, Portugal and Greece jumped. Next to blame, China’s less-than-thrilling trade result; then it was the US claims result. Finally it was the Saudi cops shooting their own folk. No, none of that; it’s the charts said the techies. Now it’s the tsunami and shock treatment for a country - Japan - just emerging from slumber.
It’s been a great week for selling headlines, each tagging price change to a single event. None were accurate, and then again, perhaps they all were. That is, no mortal or any collection of mortals can gather up every single factor affecting price change in the world auction market. Factors impacting price discovery are too complex and too numerous to isolate.
What can we do? It is our practice to establish anchors along the way, counting on these to provide some shelter from the storm .
The first of these is that notwithstanding perceived or real weakness in China, notwithstanding EU contagion or the soon-to-be applied ECB brake, notwithstanding the upcoming end to Fed generosity, the trend in improvement, US economy, will remain with us. Particularly, we can expect employment and spending to exceed forecasts, near term. This week’s releases pretty much support out view with the exception of claims which were a tad higher. This is not trend, our view, and we follow up on that The rest - imports surging, better domestic spending, even for discretionary items, fit nicely. We also saw today that Jan inventories are lean in relation to sales, this to fire factory production in the coming months.
Robert Craven
It’s been a great week for selling headlines, each tagging price change to a single event. None were accurate, and then again, perhaps they all were. That is, no mortal or any collection of mortals can gather up every single factor affecting price change in the world auction market. Factors impacting price discovery are too complex and too numerous to isolate.
What can we do? It is our practice to establish anchors along the way, counting on these to provide some shelter from the storm .
The first of these is that notwithstanding perceived or real weakness in China, notwithstanding EU contagion or the soon-to-be applied ECB brake, notwithstanding the upcoming end to Fed generosity, the trend in improvement, US economy, will remain with us. Particularly, we can expect employment and spending to exceed forecasts, near term. This week’s releases pretty much support out view with the exception of claims which were a tad higher. This is not trend, our view, and we follow up on that The rest - imports surging, better domestic spending, even for discretionary items, fit nicely. We also saw today that Jan inventories are lean in relation to sales, this to fire factory production in the coming months.
Robert Craven
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