This past week has seen the market repeatedly attempt new “all-time” highs only to be found wanting. There has been plenty of headline data for the “bulls” to feast on from the ECB announcing a program to buy bonds, surging ISM data and improvement in productivity. However, the underlying data has kept the “bears” in the game with new orders and employment showing weakness, unit labor costs shrinking and the realization that the ECB’s plans are likely be ineffectual.
I thought one of the most interesting comments this week came from Brad Delong with reference to the exit of the Federal Reserve from its monetary campaigns:
“Meanwhile, in the US, the Federal Reserve under Janet Yellen is no longer wondering whether it is appropriate to stop purchasing long-term assets and raise interest rates until there is a significant upturn in employment. Instead, despite the absence of a significant increase in employment or a substantial increase in inflation, the Fed already is cutting its asset purchases and considering when, not whether, to raise interest rates.“
There is mounting evidence that these monetary campaigns have very little effect on stimulating economic growth, yet the ECB specifically noted yesterday that they are engaging in the same program in hopes of stimulating economic growth and inflation. What the actual outcome will be is yet to be seen, but over the last 24-hours the markets seem to less convinced of a positive outcome.
This weekend’s reading list covers a rather wide range of topics to contemplate between football games, “couch naps” and junk-food. Since my goal is to be of service to you, here is the official schedule of games this weekend via NFL:
This post was published at StreetTalkLive on 05 September 2014.