E Market Briefing For Friday, Dec. 27

Headwinds facing the markets  have fallen by the wayside in recent months; and not everyone seems to have discovered what I've called a possible 'rotation in leadership', while S&P sees some 'reversion to the mean'. That doesn't mean technology doesn't continue leadership; or a China deal doesn't contribute (at least temporarily) to more advance. Or for that matter, fairly dormant Industrial or Oil stocks pick-up the slack.   

However, the 'green shoots' that many speak to, predate all this talk of leadership, by what I have thought is many months; and that the cycle low I've referred to as anticipating this behavior, quite likely, began just about a year ago (essentially exactly that).  


For the year ahead, many (including Trump) see a softening of the U.S. Dollar as something many think will be a boon to business; but I depart on that 'desire', actually preferring relative stability in the currency realm as being bullish, and have rightly argued in the past that those tending to associate a 'weak' Dollar with better profits, actually are incorrect.




Also, I'm well aware that earnings have not done much this year; but in this year was (after buybacks), really the friendly Fed making it feasible. And they're not likely to snug-up policy if they can help it, for awhile. Of course that's where the liquidity and policy discussions come into play.  




For the most part all of this rests on the Fed and monetary policy shifts (or lack of them, depending on courage by leaders to a degree) over a period of time. And that may be more an issue for 2021 than for 2020 of course (for fairly obvious reasons, including politics not only here in the US but how Brexit is addressed), and whether Europe is compelled not to move too swiftly in reversing the overly-expansive NIRP policies that I actually know Christine Lagarde at the ECB would like to review and shift as situations allow.    

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