Global Market Commentary, Analysis and Investments
There’s nothing like a little mean reversion to start your day…
The Japanese Nikkei fell flat on its face overnight. Investors looking for an excuse to take profits received just that in the form of soft Chinese manufacturing numbers. That’s all it took for traders to mash the “sell” button…
[Read more...]“Monday’s plunge has excited the Chinese market,” said the perky anchor on China’s English-language CCTV News.
As we write, gold sits about where it did 24 hours ago, at $1,386. And CCTV devoted the first 10 minutes of its Biz Asia program this morning to gold.
[Read more...]“Nobody actually wants to go to war,” suggests the Cato Institute’s Doug Bandow of the situation on the Korean peninsula.
“The North would lose. Those guys want their virgins in this world, not the next. They live well at the top, they’re not interested in war.
“From an American or South Korean standpoint, it would also be nutty. No one gains. Seoul would probably be destroyed even though the South would win. We obviously would get nothing out of it… Everybody’s posturing and threatening over it’s not even clear what.”
[Read more...]The stock market is like a crowded canoe. If enough people in the boat lean far enough over the same side, you’ll see a swift reaction.
That’s why sentiment surveys are so useful. If you can gauge exactly when opinions begin to shift toward extreme levels, you can plan to play the snapback move no one else saw coming…
[Read more...]Yesterday, JPMorgan & Chase Co. reported its anticipated impact of $600 billion in additional quantitative easing on the dollar, which will be devastating. JPMorgan finds it likely loose monetary policy could cause the dollar to collapse below 75 yen and become the weakest of planet’s most-traded currencies.
[Read more...]For several years now the US and some other countries have been pressuring China to allow its exchange rate to appreciate, thereby making Chinese goods relatively less competitive in the global economy and, so the thinking goes, assisting the US and other heavily indebted economies with a necessary economic rebalancing away from consumption and imports toward investment and exports. In September, the US House of Representatives began formal debate on a proposed measure to label China a “currency manipulator� and impose a broad range of trade restrictions on Chinese goods. But as this dispute escalates, there are other important developments in currency policy taking place around the globe with potentially highly destabilizing and economically destructive consequences.
[Read more...]The Federal Reserve said two words in its statement this week that should make every gold investor happy: Quantitative Easing. The Fed hinted that we may see additional QE measures as early as November. The news is good for gold investors because it means there could be more dollars chasing a finite amount of resources, further devaluing the U.S. dollar.
[Read more...]The new regional automotive sales lines are being drawn, with very different outcomes in Asia and the US. Toyota, even despite its recall issues, had the largest increase in its domestic auto sales in 38 years. Chinese automakers also saw sales increase dramatically. This, of course, while sales in the US were slower last month than they’ve been in about three decades.
[Read more...]China now has the world’s second largest economy, but its GDP girth may not directly translate into as solid a market as one might guess. In the video below, Stratfor points out that China, despite impressive growth rates, is both export heavy and consistently dependent on razor-thin margins that can easily turn negative. This leaves the nation on a more precarious footing than developed countries with domestically-oriented economies. Until China makes that transition, Stratfor argues, it’ll have a tough time eliminating the persistent threat of social unrest in order to become a sustainable economic powerhouse.
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Stealing the Spotlight
It was another crazy session for the Nikkei today.
After rising 3% out of the gate after Thursday’s bloodbath, the Japanese index embarked on a wild ride. By early afternoon, it had given it all back and more. Still, it fought higher to finish the day with a modest gain.
That’s a 3% rise after 7% drop— ending in a small gain after another downside scare (in case you were keeping score). That’s enough torment to keep the average Japanese investor awake for many nights to come. I suspect this is just the beginning of some wild price action across the Pacific…
[Read more...]Click for detailed story