Summary
FOMC's Vice- Chairman Stanley Fischer signaled a 2016 rate hike is in the cards. Global markets reacted negatively at the margin last night. The USD firmed and Gold weakened. In equity terms, we feel that the markets have been getting ahead of themselves in general. We continue to believe as Fed watchers it is very simple:
- As the S&P approaches or breaches 2200, the Fed will trot out its Hawk Talk team to jawbone expectations back in line.
- If stocks soften under 2000, the opposite will occur.
- We do not feel any meaningful action will happen pre -election unless a true crisis happens.
It is not crazy to say the FOMC is politically influenced. We do not believe the Fed will do anything to destabilize the markets during the next 2 months. The outgoing Dems wish to stay in power, half hearted GOP support for Trump as POTUS ,and HRC's ambition "uber alles" will hamper FOMC behavior to actually raise rates. Conversely, only a crisis event that roils global equity markets will trigger more easing in what is the likely end game, perpetual debt monetization aka Helicopter Money. If that happens, 500 lower in the S&P will get you 1000 higher post a Helo drop. Then we are in uncharted waters. New home sales are due out at 10am EDT today. Other than any global surprises, that should be the potential mover in all markets.- Soren K.
Markets
GC=F1,338.00-8.20-0.61% PL=F1,113.20-5.20-0.46% SI=F18.94-0.37-1.93% NG=F2.64+0.05+2.05% CL=F47.46-1.06-2.18% ^FTSE6827.18-31.77-0.47% ^HSI22,997.91+60.69+0.26% ^N22516,598.19+52.37+0.32%
Currencies
Precious Metals News
Trump Advisor Urges Return To Gold Standard
Fed comments push gold lower but what does the future hold for bullion?-CNBC
Paulson Maintains Gold Stake as Metals Prices Rally- BBERG
Yellen’s speech at Jackson Hole set to dominate mood on Wall Street-CNBC
Global Headlines
-Dollar Rises on Fed Outlook as Emerging Stocks, Commodities Fall-BBRG
-Now the Clinton's can pretend to honor ethical limits: WSJ
-Yellen’s speech at Jackson Hole set to dominate mood on Wall Street : CNBC
-Dollar gains, US yields rise as investors await Fed hike signal: RTRS
-ChemChina gets US security clearance for $43 billion Syngenta takeover:NYT
-Lyft Reportedly Failed to Sell Itself to Apple, Amazon, Google—and Uber: NYT
-S&P 500 Points From Record High as Crude Oil Rallies to July Best-Street
Economic Calendar
DateTime (ET)StatisticForMarket ExpectsPriorAug 2310:00 AMNew Home SalesJul580K592KAug 247:00 AMMBA Mortgage Index08/20NA-4.0%Aug 249:00 AMFHFA Housing Price IndexJunNA0.2%Aug 2410:00 AMExisting Home SalesJul5.54M5.57MAug 2410:30 AMCrude Inventories08/20NA-2.51MAug 258:30 AMInitial Claims08/20265K262KAug 258:30 AMContinuing Claims08/13NA2175KAug 258:30 AMDurable OrdersJuly3.5%-4.0%Aug 258:30 AMDurable Orders, Ex-TransportationJuly0.4%-0.5%Aug 2510:30 AMNatural Gas Inventories08/20NA22 bcfAug 268:30 AMGDP - Second EstimateQ21.1%1.2%Aug 268:30 AMGDP Deflator - Second EstimateQ22.2%2.2%Aug 268:30 AMInternational Trade in GoodsJulyNA-$63.3BAug 2610:00 AMMichigan Sentiment - FinalAug90.690.4
Good Luck
-Soren k.
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