"Stocks" (aka. the S&P 500 aka. Utilities) are having their best first half since the Asian Financial crisis:
"The Asian financial crisis was a period of financial crisis that gripped much of East and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion"
Which we are to assume bodes well for the rest of the year. The same way that 2018's best start to a year since 1987 "bode well" for a -20% fourth quarter crash. As always, you can't make this shit up:
"The Asian financial crisis was a period of financial crisis that gripped much of East and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion"
Which we are to assume bodes well for the rest of the year. The same way that 2018's best start to a year since 1987 "bode well" for a -20% fourth quarter crash. As always, you can't make this shit up:
"The fate of U.S.-China trade talks could play out in the week ahead, and that could set the tone for markets and the economy in the second half of the year"
Obviously guessing what Trump will do one week from now is a fool's errand of the highest order, however, gamblers are of the belief that either the trade war gets resolved this week, or the Fed cuts rates, either way, it's a "buy".
"Fed Chair Jerome Powell said trade and the global economy are two factors the Fed is watching"
With all of this obvious good news, it's my job to figure out what could go wrong.
First off, Goldman told their clients this week that balance sheet rolloff will likely end sooner rather than later. Which no doubt lubed the casino an additional amount post-FOMC. Is balance sheet cessation priced in? Don't know.
Getting back to the first article above and the binary scenarios under consideration:
“Everybody knows the Trump, Xi meeting could go either way...[BUT] I think everyone expects a new tariff freeze. That the $300 billion won’t go into effect. The most you can hope for out of G-20 meeting is the tariffs are where they are right now, and there’s no more escalation."
Which is exactly what happened last November at the last G20 - a temporary truce, but at a lower tariff level than currently. The casino imploded -10% straight line:
Where the stakes get even higher this time around is that all of this dueling central bank easing is raising concerns over a currency war. A prospect that sent gold and Bitcoin soaring this past week:
"The Bloomberg Euro Index fell after European Central Bank President Mario Draghi said that “ additional stimulus will be required” if the economic outlook doesn’t improve. U.S. President Donald Trump quickly accused Draghi of deliberately trying to weaken the euro, thereby “making it unfairly easier” for the euro zone to compete against the U.S. Draghi responded by saying the ECB doesn’t target the exchange rate. Draghi’s right, but he also knows that all else being equal, easier monetary policy tends to lead to a weaker currency"
The Leuthold Group’s “Defensiveness Indicator,” which in essence measures the performance of gold relative to other commodities and safety-net stocks relative to their more highflying peers, now sits in the top quintile of all readings since 1990"
So, the question on the table, is who wins in the coming weeks - never-ending trade war bullshit, Central bank bailouts, competitive debasement, or the global deflation now being unleashed?
"The last 24 hours has been brutal for the US dollar. The greenback dropped to its lowest level since the beginning of the year against currencies like the Japanese Yen and Swiss Franc"
“One indication that gets overlooked which is really, really bullish historically is the expanding number of 52-week highs”
