Last week, markets rallied strongly, and the unrelenting streak of consecutive up weeks following the December lows continues. My problem with the move is that Utilities and Treasuries are not breaking down.
Crude oil traded up to a fresh 2019 high at the start of this week’s session. The move was linked to demand fueled by optimism around the ongoing US/China trade talks.
Caterpillar announced several officer moves including changes in responsibilities for three Executive Office members, new roles for two current vice presidents and the appointment of two new vice presidents.
In an environment of massive central bank money creation, rising government deficits and a populist takeover of many countries’ political systems gold has spiked to around $1,350 four times, only to be smacked back down each time.
The Fed’s dovish policy shift was supported by the January CPI report. Headline monthly inflation was flat which matched December and was below estimates for 0.1%.
There is no reason to believe the US will be immune to a global slowdown. People thought that China would decouple in 2008. It didn't. The US won't either.
The Aussie dollar found a strong support near the 0.7080 level against the US Dollar. The AUD/USD pair started a decent upward move and broke the key 0.7110 resistance level.
This report has no particular significance when placed in context with the trend since 2009. There is a typical volatility for the series mostly due to data collection, but the trend continues higher.
It’s not hard predicting what comes next: The 2020s will be the decade when gold, silver, and commodities see a monster bull market as everything financial begins to deflate.
Growth, credit risk, financial stability and inflation are what really set interest rates. The government and the market can try to influence these things, but they can’t control them.
Now if we recover 'too quickly', then the Fed has 'legitimate' rationale to be tougher; otherwise slower progress tends to be more favorable for the market, with less upward pressure on rates.
Is there sufficient technical justification to support wildly bullish claims for new highs in gold prices? Does technical analysis need to be so convoluted? ...risk on the downside is still significant. Possibly much more than most recognize.
We maybe tilting at windmills as the relentless rally up in risk in the last week for US equities begets ever more analysis as to why markets react to policy and economic data as bulls beat bears.