The Big Picture |
- What Eurozone Crisis?
- Thursday Night Open Thread
- 10 Thursday PM Reads
- Random Financial Advice Generator
- 222 Years Of Long-Term Interest Rates
- Wall Street Is the New OPEC
- 10 Thursday AM Reads
- Economic data
- Initial Unemployment Claims Confirm Unfinished Market Rally
- Song Map
| Posted: 19 Jan 2012 07:00 PM PST Wow! Check the moves in the large Eurozone bank stocks today and for the week. And, unlike the U.S. market, on heavy volume. Euro sovereign spreads are bit tighter on the week with exception of Portugal, which Standard and Poor's relegated to the junkyard last Friday. After our post last week about confidence improving in Europe, we now sense markets are starting to perceive the big two — Italy and Spain — have been ring fenced from Greece and Portugal. Sovereign risk, within certain bounds, is largely about confidence and is why some countries can fund themselves with debt loads three times greater than others that can't. The first big test of our hypothesis will come when Greece defaults. Longer term, reform fatigue and political risk will be the major drivers of European volatility, in our opinion. Stay with Global Macro Monitor throughout the year as we closely monitor the situation in the 'zone with our Weekly Eurozone Watch.
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| Posted: 19 Jan 2012 05:00 PM PST I really appreciate the focused and on-topic comments lately — and on some rather controversial subjects, too.So lets have at it — what is on your mind the market, the economy, the primaries — nothing is off topic.What say ye? |
| Posted: 19 Jan 2012 01:30 PM PST My afternoon train reading:
What are you reading? What? — you lost money selling fatty snacks to Americans? |
| Random Financial Advice Generator Posted: 19 Jan 2012 11:30 AM PST click for Random Financial Advice
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| 222 Years Of Long-Term Interest Rates Posted: 19 Jan 2012 09:00 AM PST I love these giant long term charts. This one covers more than two centuries. It looks at long term US interest rates — the 30 year bond where available: > Click to enlarge: |
| Posted: 19 Jan 2012 06:56 AM PST Source: Wall Street Is An Illegal Cartel That Needs To Be Busted Up: Yahoo Daily Ticker |
| Posted: 19 Jan 2012 06:30 AM PST Some reads for your second cup of Joe:
What are you reading? As Dow Climbs, Worries Persist
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| Posted: 19 Jan 2012 06:23 AM PST Dec Housing Starts totaled 657k annualized vs 685k in Nov and was 23k less than expected but the breakdown was mixed. Single family starts rose by 20k to the most since April ’10 but multi family starts fell by 48k to a 4 month low, reversing the recent solid trend in this area. Building Permits overall were in line with estimates as single family permits rose by 8k while multi family permits fell by 9k. Multi family permits are still solid and will be the area of growth in home construction as they are just off their best level going back to Oct ’08. With respect to construction jobs, the amount of homes completed again is below the amount of new starts thus providing opportunities or at least stabilization in this battered part of the labor market. Dec CPI was flat m/o/m headline and up .1% ex food and energy vs expectations of up .1% for both. The y/o/y gain is 3.0% headline and 2.2% core. The headline gain is now above 3% for 9 straight months and remains still above the entire US Treasury yield curve. The core rate y/o/y gain matches the highest since Oct ’08. A main influence on CPI, Owners Equivalent Rent, was up .2% and actual rents of one’s primary residence was up .3% as vacancy rates fall and landlords continue to gain pricing power. Apparel prices fell .1% after the .6% gain in Nov. Vehicle prices fell led by a decline in used car and truck prices. Commodity prices overall were down .3%. Bottom line, the Fed will continue to think inflation is benign to give them license to continue their extraordinary policies but the CPI index rose 3% in 2011 and that is almost double the amount that average hourly earnings rose (1.6% gain). Thus, the standard of living of the average American went down. Initial Jobless Claims totaled 352k, down 50k from last week and well below expectations of 384k BUT the Labor Dept is saying that “volatility is fairly common this time of year” due to the MLK holiday where many states had to estimate their claims figures for the Labor Dept. The 4 week average which will smooth out the strange seasonal adjustments fell to 379k from 383k. Continuing Claims, delayed by a week, also fell a sharp 215k. Extended Benefits, delayed by two weeks, rose by 105k however. Bottom line, as stated, given seasonal adjustment difficulties this time of the year today’s figure must be taken with a grain of salt. |
| Initial Unemployment Claims Confirm Unfinished Market Rally Posted: 19 Jan 2012 05:30 AM PST
In addition to other bullish coincident economic data reported yesterday, initial unemployment claims, which are a leading economic indicator, are especially noteworthy. They are a good precusor to the popularly-followed payroll, or jobs, report, a coincident economic indicator. The December data will be reported in 13 trading days on Jan 6, just two days after the usually strongest two-day ending of the Year-end Holiday Season Rallies, which will start Thursday, Dec 22. These are detailed in the table below.
Here's an important technical indicator that is making new three-week highs, also suggesting the same is coming for the stock market. Typically astute put-and-call option writers, who determine the stock market's implied volatility as reflected by the VIX, are fading the stock market's past five-to-eight days decline. This is an unusual divergence that is bullish for the stock market over the days and weeks ahead.
Another indicator that is short term bullish for the stock market is the relative strength (ratio) of the stock market compared to gold bullion. Even more bullish for the stock market that the SPX/VIX ratio above, it has just made a higher high that the stock market's Oct high. Not-withstanding that gold is probably starting to make a bottom in its very short term (days) and short term (weeks) declines to $1,562.50 – see our working model in the second chart below- this indicator also suggests that the stock market rally since its Aug 9 and Oct 4 intraday lows will extend through the Year-end Holiday Season Rallies.
Gold still likely to make a high-$1,800s test of the Aug-Sep $1,900 highs where we recommending selling, following our early-Dec last year recommendation to sell the equity precious metal index, XAU. Notice how the chart pattern of an unfinished uptrend #5 (left-most open arrow) in an up-down-up-down-up 12345 has probably morphed into a coming C uptrend in an up-down-up ABC pattern (right-most open arrow with embedded matching solid line arrow), which will probably finish a slightly higher high six-to-seven weeks later.
Here's a more reliable contrary opinion buy signal for gold: Again, our work disagrees with Merrill Lynch's technical analysis, in this case gold, as they keep trend following and expecting too-popular classical chart patterns, with which our multi-indicator work currently disagrees:
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Source: Bob Bronsons |
| Posted: 19 Jan 2012 05:00 AM PST A road map of song titles: from Highway to Hell to Penny Lane, Itchycoo Park to Heartbreak Hotel. And just like places in our own neighbourhood, some are really good and some are best avoided – remember Love House by Sam Fox? For the real music geek there's an A-Z key of all the songs featured on the map with the bands that sang them. Limited edition signed and stamped Litho Prints at £100 each. 4 colour litho print posters on 115gsm uncoated art paper H60 x W80cm Click to enlarge:  ˜˜˜  ˜˜˜  ˜˜˜  ˜˜˜  Source: |
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