WKLY Round-Up thru Nov 22nd 2019; More Money Means More Candy!
Hey Folks this week in the US we will kick off the run thru the end of the year with the Thanksgiving Holiday where all markets will close on Thursday and only be open until 1 PM ET on Friday. It also kicks of the wild year-end holiday buying season where most retailers can make or break their full year results.
This Week’s Sound-Bites:
• A big holiday week coming up in the US with Thanksgiving this Thursday which will see markets closed all day and open only until 1 PM ET on Friday…of course this is immediately followed by Black Friday consumer slug fest at retail stores all over the county and then the following Monday being “Cyber Monday for on line deals and specials…So far this year markets are higher across all indexes with US Equities seeing over $6.2 Trillion in wealth…needless to say, most all retailers are most optimistic about the upcoming spending spree where the bulk of retail sells are made with the NRF expecting YoY sales increase of 4%…Looking at industry stats the S&P 500 has made gains 84% of the time from Tuesday’s close to closing price going into the weekend…and on Wednesday we will see trading volume will fall over 60% we move thru the end of this holiday week n the US…and from Wed to Fri daily price swings while the markets are open are much lower than normal as well showing only a movement of around 0.30% each day…
• Keep in mind the markets new fresh highs are also against a back drop of slowing Global Growth but what is going on underneath the surface is that the supply of money (otherwise know as the sexy acronym M2 Money Supply which measures, all cash, savings and checking and CDs/Money Market Funds) has climbed over 31% this year…and let’s not forget the FEDs are pumping over $60 Billion per month in the markets by buying T-Bills (remember, they don’t want you to call it QE) has had the effect of un-inverting the Yield Curve and pumping more liquidity in the markets…this is like candy to a 5 year old! But let’s also not forget that this is not only a US Market phenomenon, but we have also seen the ECB and the BOJ pump more money into their respective markets as well…
• We have seen some signs of PMI numbers coming in a bit higher or at least finding a bottom while the US 10 Year Treasury Note has moved up to 1.774% from lows or around 1.45% this past summer…but still down from highs 12 months ago of 3.04% while the 30 Year Bonds have fallen from 3.331% down to 2.23%…Most Macro funds are betting on a further move higher in US Rates with the Bond Market moving the most…and markets begin to price in a rise in Bond yields as they turn higher we could see the price of Bonds fall a good deal in 2020….
Enjoy This Week’s Update
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