MarketWatch – How NOT to react to Supreme Court’s ruling Think you know how health insurers’ stocks will react to the Supreme Court’s decision on Obamacare? You may want to think again. My analysis of the data suggests that any sizeable stock price reaction to any ruling will be short lived. I concede that this… Continue reading Varying Opinions On Reacting To The Health Care Ruling
Bloomberg.com – Italy Said to Review Decree to Help Bank Recapitalization Italy may approve a decree to help banks to boost capital through the sale of bonds to the government, as Banca Monte dei Paschi di Siena SpA prepares to raise at least 1 billion euros ($1.3 billion) using the securities, two people familiar with… Continue reading High Finance At Its Circular Finest
<Click on chart for larger image> MarketBeat (WSJ Blog) – Three Views of the Run on Peripheral Europe Interesting set of charts in the annual report for the Bank for International Settlements, the famed central bank of central banks in Basel, Switzerland. They offer three snapshots of the flow of cash out of the heavily… Continue reading More Evidence Of Money Rushing To Europe’s Safe Havens
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The Wall Street Journal – Basel Bank Official Warns on Stimulus Measures The unconventional measures introduced by many central banks in response to financial turmoil could create other problems if carried out for too long, the general manager of the Bank for International Settlements said Sunday. Central banks currently find themselves “caught in the middle,”… Continue reading Is Everyone Afraid To Be Bearish?
The chart below is from our friend Ron Griess of The Chart Store. He also notes that market participants seem reluctant to turn bearish because of the “hope” of QE3. Following this line of thinking, the market is not responding to worsening fundamentals. Instead traders see a weakening market increasing the odds of more money… Continue reading The Federal Reserve And The Stock Market
The Financial Times – US earnings warnings cast shadow over shares outlook A string of earnings warnings from US companies that are a barometer of the broader economy is casting a shadow over the outlook for equities. Worries of a slowing global economy are resonating more strongly with investors after Procter & Gamble, FedEx and… Continue reading Will Earnings Disappoint?
The Wall Street Journal – Holman Jenkins Jr. Why the Euro Crisis Will Go On and On The question will bug future historians deep into the night: Why did Europe adopt the euro? The euro wouldn’t reduce Europe’s welfare bloat, cut its taxes, or bring rain to its jobs desert. Withdrawing a currency from circulation… Continue reading Europe, The Never-ending Crisis
Reuters – Crude Oil Futures Bouncing Near Their Lows of 2012 As the chart below shows, it’s clear that with every bit of bad economic news, crude oil responds with another downward move. This year, the pattern taking shape resembles that of other summers: a weakening of the economic data midyear is followed by weaker… Continue reading Crude Oil
Market Watch – Grantham: ‘Stocks are boring; bonds are disgusting’“Grantham says the Federal Reserve, first under Chairman Alan Greenspan and now, Ben Bernanke, has forced sky-high bond pricing–in part to funnel investors into the equity market–inconveniently at the time much of the world needs a reasonably priced “safe haven” away from Europe’s credit volatility.” The… Continue reading More Bond Haters
Bloomberg.com – Simon Johnson: U.S. Banks Aren’t Nearly Ready for Coming European Crisis Less optimistic people increasingly think that the euro area will break up because all the proposed solutions are pie-in-the-sky. If the latter view is right — or even if concern about dissolution grows in coming months — markets, investors, regulators and governments… Continue reading Is The World Ready For A European Collapse?
<Click on chart for larger image> The New York Times – Chinese Data Mask Depth of Slowdown, Executives Say“The government officials don’t want to see the negative,” so they tell power managers to report usage declines as zero change, said a chief executive in the power sector. Another top corporate executive in China with access… Continue reading Examining Chinese Data