My earlier doubts about the US economic outlook have softened some, but not much. I still see slowing in the US equity sector and while 10-year treasury yields continue to fall, I expect the long bond to outperform. For 2016, modest dollar appreciation appears likely against the Euro and commodity currencies. I’m long precious metals, the long bond, and utilities. Short US financials.
Ashraf, great points. The rapid deterioration in the world economy you describe poses a serious challenge to portfolio managers. In the US, there is ongoing deflation, a growth slowdown in manufacturing, and corporate profit recession. A rebound in equities is dubious and the risk of another downward move is substantial.
Until ongoing worries about the Yuan subside, macro data improves, and credit spreads narrow, I would imagine that asset allocation models should favor cash, fixed income, and currencies.
In addition to short-term trading of FX spot and crosses, how would you feel about allocating capital to the USD and Yen via the ETFs UUP and FXY?
Judging from shares bought at today's close, there's still the possibility of a "surprise" ...when institutional money flows better align with macroeconomics. Tonight's data posted at www.nextSignals.com/ (Most of the flows into safe havens and defensives.)
When I posted my comment, I was referring to the business cycle (as opposed to current stock market fluctuations). The econometric data is certainly mixed, but by and large the US appears to have reached a cyclical peak and is in a contraction.
Simply stated, I see a US recession, based upon contractions in industrial production and trade, reductions in full-time employment, and reductions in real personal income.
Try publishing this in the UK weekend papers: Traders bet BankofEngland will raise rates to 6.25% --highest since 1… https://t.co/GWXrTEAk4R(2 years ago)
Poor start to a slow market day as Ezone PMIs disappoint. Im still keeping an eye on the rare (-2%) USD-GOLD combo,… https://t.co/UyRzWsRbs7(2 years ago)
-5% YTD is not good, while -7% from the year highs can be tough. Gold traders have their eyes fixated on this for n… https://t.co/NV5UMKsfNo(2 years ago)
ما وراء هبوط الدولار مع الذهب و من منهما يتمكن الارتداد؟
موعدنا الآن في غرفة شركة إكس أم لجلسة الأسواق
https://t.co/Y7tD0RxCS2
@XM_COM (2 years ago)
Jobless claims > 300k before next FOMC meeting would be ideal for Fed to make up for any CPI upside surprise (2 years ago)
"Cook & Eat at Home" scheme may come next to defeat UK inflation... (2 years ago)
Earlier in the week gold selloff was attributed to smaller than exp China EASING. Metal is now holding v well despi… https://t.co/ZW9cmXTPWW(2 years ago)
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My earlier doubts about the US economic outlook have softened some, but not much. I still see slowing in the US equity sector and while 10-year treasury yields continue to fall, I expect the long bond to outperform. For 2016, modest dollar appreciation appears likely against the Euro and commodity currencies. I’m long precious metals, the long bond, and utilities. Short US financials.
Until ongoing worries about the Yuan subside, macro data improves, and credit spreads narrow, I would imagine that asset allocation models should favor cash, fixed income, and currencies.
In addition to short-term trading of FX spot and crosses, how would you feel about allocating capital to the USD and Yen via the ETFs UUP and FXY?
When I posted my comment, I was referring to the business cycle (as opposed to current stock market fluctuations). The econometric data is certainly mixed, but by and large the US appears to have reached a cyclical peak and is in a contraction.
Simply stated, I see a US recession, based upon contractions in industrial production and trade, reductions in full-time employment, and reductions in real personal income.