“October:
This is one of the peculiarly dangerous months to speculate in stocks. The
others are July, January, September, April, November, May, March, June,
December, August and February.”
Mark
Twain
We live in the age of
central bankster generated manias, and stock mania is now sweeping the world.
Like all manias before it, this one too will end badly, we just don’t yet know
when or why. But when the end comes be prepared for a massive swing to the hard
left and far right. What we’ve seen so far from voters in Europe and the USA, was
merely the product of disillusion with the system. What follows once the stock
and everything mania dies in distress, is revulsion with the system and
political parties deemed to have brought the calamity about.
But all that’s for
another day. For now all news is good news once again. Party on like it’s 2007.
The “fear of missing out” rules the day. “Manias are us,” forever, right?
Asia
Stocks Build on Record High, Yen Strengthens: Markets Wrap
By Adam Haigh
Updated on 9 January 2018, 06:01 GMT
Asian equities built on the best start to a year since 2006 as Japanese
traders returned from a holiday following new all-time highs for U.S. shares.
The yen climbed in an apparent reaction to the Bank of Japan trimming bond
purchases in one of its regular operations.
Japanese shares pared their gains after the yen’s advance in wake of the
announcement by the BOJ, which made a small tweak to its buying of longer-dated
debt. While a number of analysts do anticipate the central bank to tweak its
stimulus program this year, Governor Haruhiko Kuroda has repeatedly emphasized
there’s no shift on the immediate horizon.
Shares
from Sydney to Hong Kong were modestly higher after the S&P 500 Index eked
out a fresh closing high. Declines at Samsung Electronics Co. in wake of
its profit announcement weighed on South Korea’s equity index. Earnings will
continue to be a focus as the week goes on, with financial firms including
JPMorgan Chase & Co. and Wells Fargo & Co. on the schedule. The
dollar’s softness last year may reverberate for some, as it did negatively for
Samsung.
----Signs
of financial-market stress continue to abate at the start of 2018 amid optimism
that lower U.S. taxes and a broadening global economic recovery justify record
high prices for global equities. In Europe, data showed confidence in the euro
area continued its advance at the end of 2017. At the same time, the euro has
been restrained by concerns about Germany’s continued struggle to form a
government.
"This environment of strong global growth and contained inflation
is actually a great environment for Asian equities, including tech," said Ajay
Kapur, head of Asia Pacific and global emerging market strategy at Bank of
America Merrill Lynch in Hong Kong, in an interview with Bloomberg TV. "On
the margin you will get hurt a little bit on the currency," as seen with
Samsung, but demand for tech companies’ products remains good, he said.
Here are some of the other main events to watch for this week:
Australian retails sales
numbers are due on Thursday.
U.S. inflation data are
forecast to show price pressures remain muted, giving hawks little reason
to argue for faster tightening.
St. Louis Fed bank
President James Bullard and head of the New York Fed Bill Dudley are among
central bankers scheduled to speak.
China producer and
consumer prices data come Wednesday, while a reading on the country’s money
supply is expected in coming days.
Talks between South Korea
and North Korea are set to take place Tuesday.
Equity euphoria has gripped most of the world to kick off 2018, with the
14-day relative strength index for major stock markets surging to overbought
levels.
The S&P 500 Index, MSCI Asia Pacific Index, MSCI World Index, Nikkei
225 Index, and MSCI Emerging Markets Index are all in overbought territory,
while the Euro Stoxx 600 Index lingers just shy of such a level.
The average reading for this collection of gauges soared to a weekly
record as of Jan. 5, according to data compiled by Bloomberg going back to
1988.
The relative strength index is a technical indicator that tracks the
magnitude and speed of price fluctuations. Typically, a security with an RSI
above 70 is considered to be overbought, while those below 30 are viewed as
oversold.
Trade
and Central Banks Will Make Life Painful for Investors
You want to be bullish
when monetary policy is loose and bearish when it's getting less accommodative.
by Jared Dillian
U.S. President Donald Trump has been relatively subdued over the last few
months when it comes to trade, a period that roughly overlaps with the time it
took to pass tax reform. He was under pressure to keep quiet about it during
the tax negotiations, but 2018 is likely to bring a very different Trump.
This “economic
nationalism” stuff is not just talk. Trump is a true believer in protectionism,
and I suspect we will soon see tweets about tariffs.
Let’s assume that most people in finance are in agreement about the benefits
of globalization and free trade, which have led to a disinflationary boom and
an increase in the standard of living of pretty much everyone, except manufacturing
workers in developed countries, who stand out as the biggest losers. In a
global market for labor, they were simply uncompetitive. That’s not their
fault. But the tragedy here is that some people have begun to oppose free trade under the principle that it is unfair, a view
that emerging-market nations surely oppose.
And yet, financial markets have started 2018 the same way they ended 2017,
with broad strength across a wide range of asset classes. I can’t be the first
to notice that 2018 could be the year that we get an honest-to-goodness trade
war andcentral banks pull back from emergency monetary policy
measures. What I mean is that there has been speculation the European Central
Bank will start to taper its asset purchases in a meaningful way. There’s
little doubt that the ECB’s commitment to do “whatever it takes” to preserve
the European Monetary Union has been the single most distortive policy in the
modern history of central banks, driving yields on even low-quality junk bonds
to negligible levels.
I would characterize an ECB exit from quantitative easing measures as probable, and I
would also say people are underestimating the likelihood of monetary tightening
in Japan, where there is a high risk of a financial accident. The Bank of Japan
owns about 70 percent of the nation’s market for exchange-traded funds, which
translates into a big chunk of the stock market. They’ve bought so much
sovereign debt that the government bond market has effectively ceased to
function. There has even been open discussion among analysts of the BOJ
actually cancelling government debt, leading to trillions in printed yen
remaining in circulation.
“If you
aren't thinking about owning a stock for ten years, don't even think about
owning it for ten minutes.”
Warren Buffett
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, so who’s reading your emails, bank statements, corporate secrets?
The massive security hole sinking Silicon Valley. What did the “Five Eyes” know
and when did they know it? And what did they do with it too? Intel promises to
close the stable door. So much for blockchain security.
"They don't make bugs
like Bunny anymore."
Olav Mjelde.
Triple Meltdown: How So Many Researchers
Found a 20-Year-Old Chip Flaw At the Same Time
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
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