The Morning Look
Market Update:
Futures are lower ahead of Tuesday’s open as investors digest the recent decline on Wall Street. Later this week the Bank of Japan and the US Fed will conclude their latest meetings.
Gary’s Take: We continue to watch this race to the bottom on interest rates. Keep in mind, it is no longer a bond market. Markets are places where people buy and sell. Today’s bond market is controlled by a select few numbskulls at central banks. This long-term experiment continues to scare. Rates are not supposed to be negative. Today, Yellen and friends are in a room playing Centipede, Ms Pacman, Galaga and watching reruns of Barnaby Jones. Tomorrow, it will be “blah blah blah, data dependant, keeping rates the same.”
Economic Data:
- FOMC Meeting Begins
- NFIB Small Business Optimism Index 6:00 AM ET
- Retail Sales 8:30 AM ET
- Import and Export Prices 8:30 AM ET
- Redbook 8:55 AM ET
- Business Inventories 10:00 AM ET
- 4-Week Bill Auction 11:30 AM ET
Highlights:
- Central Banks: Bank of Japan (Japan’s Central Bank) and The US Fed Meet This Week
Gary’s Thoughts: Oh joy! - Germany’s 10 year yield drops into negative territory
Gary’s Thoughts: We repeat…something is up. This is the definition of a central bank-induced bubble.
Watch gold, low interest rates forever will only keep pushing gold up imo, especially with all the other un-certainty about.
Gary says, “Rates are not supposed to be negative.”
yup, but for the last 100 years the banks have lended the planet the money in order to have an economy, and in order to pay the interest, we must borrow more money. The system works fine, so long as the economy is growing, and the debt is small.
But, the bigger the debt gets, the more money we must borrow in order to service that debt.
Now, the debt has become soo huge, that there is no room for both economic growth, and debt service, …and debt service must come first.
Result, a shrinking global economy .
The banks who caused the problem have only two solutions; debt forgiveness ( ha fat chance ) or lower interest rates to zero, then to negative. ( Negative interest rates,,, a form of debt forgiveness if you think about it. )
The banks have no other choice…
xx
The Market:
We are pretty much on support here.
Fed speak, will likely be, ” no change in interest rates.”
If the dollar rallies, the market will go from extended down, to more extended down.
If the dollar pulls back, the market rallies, but the dollar hits the 50 day moving average……
Brit-exit…….. will they, wont they ?
That is the next big effect on the dollar.
Brit-exit, the dollar rallies, the market falls.
No Brit-exit, the dollar falls on low interest rates, it breaks down thru the 50 day MA, and the market rallies to re test the top.
My 2 cents, I got a right to it.