The Week Ahead is not about the Week Ahead

Aug 24 13:08 2019 Print This Article

It's the last week of August.  Several economic reports will be released in the coming days. They include the US deflator of consumer expenditures that the Federal Reserve targets, China's PMI, and the eurozone's preliminary August CPI.  It is not that the data do not matter, but investors realize the die is cast. 

They are looking further afield. The next US tax increase on Chinese imports goes into effect on September 1, and Beijing has threatened to retaliate. The Federal Reserve and the ECB will ease policy in the coming weeks.   The twice-delayed Japanese sales tax hike will be implemented in about five weeks. 

A cartoon I saw recently seems to capture the sentiment in the market at the moment.  One person was carrying a sign like the "end is nigh" and another person complains about the optimism, that this could last forever.  Whether it is the protest in Hong Kong, negative interest rates, or the US-China trade conflict, many think the status quo is unsustainable, and others believe it can persist as in a "new normal."  Paradoxically, both may be true.   The market may have gone too far in the short-term, but it does not mean a return to the status quo ante.  Some suspect that the collapse of Argentina's 100-year bond that was oversubscribed when it was sold in 2017 ($9.75 bln of bids for the $2.75 bln offering) and the poor reception to Germany's sale of a zero-coupon 30-year bond (which based on pricing was tantamount to a yield-to-maturity of -11 bp), is a turning point.  It also coincides with a ratchet up in the decibel of arguments that monetary policy is exhausted and fiscal policy is required. 

Read More

About Article Author

Marc to Market

Marc Chandler has been covering the global capital markets in one fashion or another for more than 25 years, working at economic consulting firms and global investment banks. Chandler attended North Central College for undergraduate work, where he majored in political science and the humanities. He holds master's degrees from Northern Illinois University and University of Pittsburgh in American History and International Political Economy. Currently Chandler teaches at New York University Center for Global Affairs, where he is an associate professor. A prolific writer and speaker he appears regularly in the press and has spoken for, and is an honorary fellow of, the Foreign Policy Association. In addition to being quoted in the financial press daily, Chandler has been published in the Financial Times, Foreign Affairs, and the Washington Post. In 2009, Chandler was named a Business Visionary by Forbes. In 2009, his book, Making Sense of the Dollar, was published by Bloomberg Press and received a Bronze Award from Independent Publishers.

Related Items

Dramatic Investor Adjustment Continues

Overview: The warning by the US Center for Disease Control and Prevention that Americans should prepare for an outbreak of Covid-19 sent the S&P 500 tumbling to an 11-week low and the 10-year Treasury yield to a record low near 1.30%. The volatility of the S&P (VIX) jumped to its highest level s ...

Asia Morning: Another Tough Day At The Office

It was another tough day at the office for US markets overnight, all three leading indices falling by around 3.0% as the US Centre for Disease Control (CDC) warned it was when, not if, Covid-19 coronavirus would arrive in the United States. The dead cat bounce seen in Asia yesterday was quickly co ...

Tech Talk for Wednesday February 26th 2020

Pre-opening Comments for Wednesday February 26th U.S. equity index futures were higher this morning. S&P 500 futures were up 13 points in pre-opening trade. Salesforce.com dropped $3.01 to $178.26 after reporting lower than consensus fourth quarter earnings. Canadian Imperial Bank of Commerce (C ...

Barrick issues cease and desist notice to AJN over Kibali stake purchase

Barrick Gold, the operator of Congo's biggest gold mine, has issued a cease and desist notice to junior miner AJN Resources as it moves to block its acquisition of a 10% stake in the project, which it says the deal undervalues. Barrick and AngloGold Ashanti, which each own 45% of the Kibali mine, sa ...

Perth Mint Gold Token starts trading on cryptocurrency exchange

The Perth Mint Gold Token (PMGT), the world’s first sovereign gold digital token, started trading this week on the KuCoin cryptocurrency exchange. googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');}); Each token is underpinned 1:1 by Perth Mint digital GoldPass certi ...

Morning News: February 26, 2020

World Shares Slump for Fifth Day, Bets Grow on Interest Rate Cuts To Counter Damage ‘Not Just an Italian Problem’: Coronavirus Threatens Europe’s Economy Fed Official Says Coronavirus Economic Fallout ‘Could Spill Over’ Coronavirus Shows the Problem With Trump’s Stock Market Boasting Re ...

A guide to the best robo-advisors in Canada for 2020

The robos are everywhere. What was once a little-known investing tool for tech-savvy investors is now commonplace, with everyone from newbie savers to retired boomers using robo-advisors to help manage their money.  While advisors and traditional fund companies still manage the majority of money i ...

Net-zero emissions by 2050: one Liberal promise that won't go away

Environment Politics in Canada Seeking re-election in 2019, the Liberal government came out with a surprise campaign promise: Canada would achieve net-zero emissions of GHG gases by 2050. The move was classic Liberal politics. With the government's election campaign faltering, and leader Justin ...

Gold Set to Test $1,700 Resistance as U.S. Yields Fall to Record Lows

I don’t know about you, but I never thought I’d see the day when the yield on the 30-year Treasury bond dipped below 2 percent, let alone 1.8 percent. And yet that’s precisely what happened on Tuesday as investors weighed the global impact of the coronavirus virus, or COVID-19. On a ...

Nornickel sees no major palladium substitution in near term

Russia’s Norilsk Nickel (Nornickel), the world’s largest producer of palladium and high-grade nickel, expects the palladium market to continue to be in a deficit of about 500 000 oz this year, driven by the continuing increase in loadings in autocatalysts. Underpinning the company’s market for ...