Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Stock Market Investors Watching the Snow Fall

Stock-Markets / Stock Market Sentiment Dec 15, 2009 - 01:52 AM GMT

By: Paul_J_Nolte

Stock-Markets

Investors seem to be mailing it in for the last couple of weeks of the year. Some buying interest on decent overall economic numbers, but very low volume indicates that many are sitting on their hands awaiting the flip of the calendar. Retail sales were better than expected, however auto sales and slightly higher gas prices did boost sales. The trade picture improved some, while jobless claim rose a bit – so at worst OK economic data.


The part of the market that investors were most concerned about was sovereign debt. Given the decline following Dubai, rumblings about a downgrade for Greece and Spain were raising concerns about another “contained problem” that could rock markets, as was the case a year ago. Consumers felt a bit more upbeat, maybe as the Christmas season is upon us – however we will continue to monitor retail spending to see if they are acting on some of their good feelings. We’ll also get some inflationary data and a check of how busy factories were in November. More comments to come from the Fed mid-week that could shed some light on how long “extended period” is for low rates.

Investors likely spent more time watching the snow fall and shivering during the first real winter blast than actually making investment decisions last week. Volume continues to contract, although there was a tendency for more stocks rising than falling last week making the week as a whole look like a winner while the major average barely budged on the week. The low/slow market activity and very tight trading range (between 1080 and 1120 since 11/9) has made market participants very jittery and focused on those two levels. If the markets break either one decisively (with some volume) we could see a fairly quick 5% move in the direction of the break.

While it may not occur until next year (our guess), the markets are beginning to signal some internal changes as financial stocks begin taking a back seat and technology and healthcare stocks begin to outperform. Energy too has had trouble sustaining significant gains vs. the SP500, even as the dollar fell into early November. The dollar seems to be holding the key for investors and it should be noted that the dollar index has finally broken its downtrend line that has been in place since March – coinciding with the bottom in stocks. We don’t anticipate many fireworks before yearend, however we’ll be watching the betting line.

Since the Fed has essentially anchored short-term rates at zero (holding Treasuries for 3 months gets a whopping 0.05%) investors have been forced to buy longer-dated maturities in hopes of earnings something on their money. But given the scares from other countries outlined above, investors are beginning to demand higher rates for long dated maturities. The current spread between 2 and 30 year bonds was at a record high last week is seen by some as a vote of no confidence in the current fiscal policies of the Obama administration rather than impending inflationary fears. For now, our model points to lower rates ahead, however any minor spike in commodity prices (which have been falling) would turn the model down. How long can the current spreads stay.

By Paul J. Nolte CFA
http://www.hinsdaleassociates.com
mailto:pnolte@hinsdaleassociates.com

Copyright © 2009 Paul J. Nolte - All Rights Reserved.
Paul J Nolte is Director of Investments at Hinsdale Associates of Hinsdale. His qualifications include : Chartered Financial Analyst (CFA) , and a Member Investment Analyst Society of Chicago.

Disclaimer - The opinions expressed in the Investment Newsletter are those of the author and are based upon information that is believed to be accurate and reliable, but are opinions and do not constitute a guarantee of present or future financial market conditions.

Paul J. Nolte Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules