The central banks have sucked the life out of the financial markets. I heard a few weeks ago that the Japanese JGB market in 10 year bonds didn't trade for 36 hours during the week. The 10 year yield there is 0.6%. When the central banks decide what the price is for a financial asset, there is no motive to buy or sell for profit. Because the price doesn't move.
That seems to be the road that the ECB is going to take. They have deflation, like Japan did, and they are going to try to beat deflation by manipulating interest rates to as low as possible. German Bunds are trading at 1.35%. That is 115 basis points less than US 10 years.
Yesterday is more of the same. Russell 2000 getting pounded, and the S&P only getting a little scratch. For a down day, the action was quite boring. You have the midday selloff, and then the 3:30 ramp job to make everything look OK. It is a textbook pattern that keeps repeating in this hated bull market. Everybody hates this stock market! Including me!
Janet Yellen is back in the forefront, with Fed minutes to come later today. These to me are nonevents, they say the same things over and over again. Scripts fit for Lonesome Dove. Endless free money, etc. I don't know what it will take to ignite some volatility, perhaps it will be a rash of good news. Bad news isn't doing job, that's for sure.
Subscribe to:
Post Comments (Atom)
Posts
2 comments:
Not much of a correction.
Anytime I am rooting for the same things that Dennis Gartman and Ralph Acampora are, I worry.
Very useful sentiment indicators, those 2 gurus are. World-renowned, in fact.
Post a Comment