Morning Commentary
Message of the market
There are a couple of developments that are very problematic for the markets. They are mostly traced back to Europe; however, global growth, in general, is in serious trouble. In fact, socialists in Europe ran out of other people’s money a longtime ago, and the European Central Bank cannot print enough money to make up the difference. Ironically, the central bank president, Mario Draghi, knows this, and may bow out to a combination of political pressure and economic desperation. Nevertheless, it will not help as the spoiled citizens who grew up on phantom largess, and inflated self-worth might need to hit a brick wall to wake-up.
Amazingly, as the experts say, the drums are beating loudly for quantitative easing (QE); Europe is four years behind America. Well, QE has not done anything for Main Street America; it has only been around to prop up the failed banks scattered throughout the continent. Europe needs to go through more pain, and as for America being ahead, it is the reverse… our debt and endless welfare programs place us a few years behind Europe.
Another worry for the market is the hot commodity, crude oil. The price for crude oil has fallen under $90. This will feel good at the pump, but it is a serious red flag about demand as the OPEC is lowering prices rather than cutting production, even though they know it is a demand issue.
Global Pain
On Tuesday, Ford issued an earnings warning based on higher than expected losses.
Next, there is the dire warning from the Geneva Report, which states that an economic crisis is imminent in the “fragile eight” countries from high debt and slow growth:
It’s crazy for nations like India and Brazil to let petty politics hold back their potential that remains immense. The fact is there will be growing pains, and an even harder landing here and there, (if they’re smart), but the “fragile eight” countries will be more relevant than Europe sans Germany, and possibly the United Kingdom in a decade or less.
Markets
I am looking for a big bounce into the end of the year, but for those that want to take a little edge off a more volatile ride, consider higher dividend investments. Of our open positions, Potash (POT) has a 4% yield. The company is holding on in tough times; when macro conditions improve, get a big move in on stock after being paid to wait. Since WWII, dividends paid up 6000% versus 1,100% for inflation.
Today’s Session
The all-important jobs report is finally out and the results are moving the indices higher. In September, nonfarm payrolls added 248K jobs compared to the 210K consensus and above the upwardly revised 180K (from 142K) jobs added in August. The sizable rise led to a drop in the unemployment rate to 5.9% from 6.1% - a new six-year low. Oddly enough, The civilian labor force participation rate, at 62.7%, was changed little in September making the employment-population ratio was 59.0% for the fourth consecutive month. Any volatility in the market will mean that investors are getting more and more antsy about the Fed raising interest rates. This is a good month following a bad month, which is not indiciative of any long-term trend, so odds are we will be safe from higher rates for some time.
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3/28/2024 1:39 PM | Fruitful Quarter |
3/28/2024 9:50 AM | LISTEN TO THE MARKET |
3/27/2024 1:40 PM | Mostly Higher |
3/27/2024 9:32 AM | U-TURN? |
3/26/2024 1:08 PM | Everything Is Up |
3/26/2024 9:42 AM | TAPPED OUT (I HOPE YOU AT LEAST GOT A T-SHIRT) |
3/25/2024 1:33 PM | Not A Mutiny |
3/25/2024 9:35 AM | STAYING THE COURSE…BEYOND TECH |
3/22/2024 12:56 PM | Toll on Americans |
3/22/2024 9:38 AM | A TAD TIRED |
3/21/2024 1:55 PM | Building on Gains |
3/21/2024 9:30 AM | A COMFORTING FED |
3/20/2024 1:33 PM | Pivotal Moment |
3/20/2024 10:00 AM | HERE COMES THE FED |
3/19/2024 1:33 PM | Picking Up Steam |
3/19/2024 9:35 AM | RUMBLINGS IN THE BOND MARKET |
3/18/2024 1:48 PM | Mag 7 is Back |
3/18/2024 9:39 AM | THE PARTY IN SAN JOSE WILL BE LIT |
3/15/2024 1:38 PM | Realtors Settle |
3/15/2024 9:33 AM | AN UNEASY PAUSE |
3/14/2024 1:43 PM | Sticky Inflation |
3/14/2024 9:48 AM | GOING TO A GO-GO |
3/13/2024 2:16 PM | Taking a Breather |
3/13/2024 9:51 AM | ALL SO EPIC |
3/12/2024 1:42 PM | Marching Higher |
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