Divergence city. Doesn’t mean markets are in trouble but:
While the S&P hits highs…nothing else does. The DOW, NASDAQ, NDX are a little behind but the TRANSPORTS, THE SMALL CAPS, THE MID CAPS, FOREIGN MARKETS and a bunch of other stuff not even close. This is something to watch.
GOLD/GOLD STOCKS look great on a daily and weekly. Pullbacks preferable but this looks more real than the many aborted moves it has had in the past.
“EASY MONEY IS BACK”
We like Barrons. But…that was the title cover this weekend of their financial magazine. Our message to Barrons…really? When did the easy money ever leave? The definition of easy money is the following…recently…
Negative Bond Yields through…
30 yrs: Switzerland
15 yrs: Germany, Netherlands
10 yrs: Japan, Denmark, Austria, Finland, Sweden
9 yrs: France, Belgium
8 yrs: Slovakia
7 yrs: Ireland, Slovenia
6 yrs: Spain
5 yrs: Portugal
3 yrs: Malta, Bulgaria
1 yr: Italy
$13 trillion of bonds around the globe are negative. Depending on which abacus you use, $20 trillion has been printed around the globe. Australia and India just lowered again. China is infusing trillions even though they say GDP is in the 6.5% range. The ECB telegraphed lower rates and more money printing even though rates are negative and have already printed a ton. The Bank of Japan owns over 50% of their ETFs and over 4% of their whole market. Our brave central bank changes stance every time markets take a hit and tops out at a whopping 2.5% fed funds. Sorry…the easy money never went away. And this is not just easy money. Easy money used to be a quarter point here and there.