Photo: Spencer Platt/Getty Images
Markets whipsawed this week on a barrage of data, including the ADP Jobs Report, global PMI readings, and Friday’s Nonfarm Payrolls Report.The manufacturing data showed that continued weakness in Europe is now substantively impacting the Asia Pacific and emerging markets in Latin America.
Trying to make sense of it all?
'The interest rate has to be very low. When the nominal interest rate short end goes to zero they have to change the long rate, so that gets you into quantitative easing. All this is an indirect way of trying to get negative interest rates, which is what we really need.'
'Corrections are normal and are the way things should work, the way things do work. Having said that, I don't know when the correction will stop. It's normal in my experience for corrections to go down 30 or 40 per cent. It's just the way markets work.'
Citi's Fitzpatrick: Stocks Are Repeating A Pattern From Late 2007, Right Before Things Got Really Ugly
'The price action here is still similar to that seen at the highs in 2007 going into 2008 (see parallel lines). The initial leg down from the Oct 2007 high (1,576) was 10.7%. We then bounced 8.3% before turning lower again and trending down to the 200 week moving average. This year, the initial leg down from April's high was 10.9%. Four week's ago we set an interim low and bounced 7.6%, so not quite as much but still similar. While the there is still room for a small squeeze up, we ultimately expect a move down to the 200 week moving average (1,136).'
'The S&P 500's performance mid-way through this election year hasn't been too far off base when compared with the average election year going back to 1900. The '500's' monthly results saw gains in January, February, and March, followed by declines in April and May, and concluded with a gain in June. Therefore, only February got the steps wrong.'
'To us that says the oil markets are tighter and riskier than other analysts would have us believe. Furthermore, the other side of this current round of global economic weakness is recovery. When it comes, oil is headed north.'
Richard Koo Talked To Some German Politicians, And They Admitted To What They REALLY Think About Greece
'One influential parliamentarian, for example, argued forcefully that Greece was not yet a modern nation-state and that it continued to operate under the ideas and systems of the Byzantine and Ottoman empires. He felt this had to change before further aid could be provided.'
'...You don't bounce back in six months like after a usual recession, it can take four and a half years just to get back to the same GDP per capita level that you started at. Unemployment can take a similar amount of time. We're very much tracking that in a way. I think people are sort of overreacting to small variations in the data.'
'I don't mean to imply that using the printing press is an intelligent choice, nor is it a solution.In fact, printing money has caused the economic woes of America and the rest of the world. However, as I have said often, we are not going to rid ourselves of this menace until it is carried to its logical conclusion.'
BofA: One Of The Best Stock Market Indicators Just Flashed A Buy Signal That We Haven't Seen In 15 Years
'Our measure of Wall Street bullishness on stocks declined again, marking the ninth time in eleven months that the indicator has fallen. The 0.8 ppt decline pushed the indicator down to 49.3, the first time below 50 in nearly 15 years, suggesting that sell side strategists are now more bearish on equities than they were at any point during the collapse of the Tech Bubble or the recent Financial Crisis.'
'Every downturn comes to an end but prospects of the US returning to full employment in the next five years is quite honestly bleak. Even the CBO does not really see the US getting to full employment until the end of the decade. And a lot of people, realists, think it's going to be in the next decade. The fed can cause a problem. The Fed obviously mismanaged the economy before 2008.'
'As regards formal accountability, the ECB as interest rate setter, liquidity and credit manager, lender of last resort and market maker of last resort, displays less formal accountability than any other leading central bank.'
'It's very difficult to see how government bonds are anything other than risk assets (lets face it, all assets are). Yet insurers are buying them because they've been told to take less risk (whatever that means) by the regulators. So they are taking more risk, and they will one day suffer the consequences. Banks in the eurozone are bust because they own so much of their local sovereigns' debt. But they were told it was OK to do that by the regulators. So they let their guard down.'