As interest rates began to climb in January, bullish investor sentiment crested and the risk parity trade went array. Stocks fell violently in February and the new regime of volatility commenced — in a market revealed as increasingly illiquid.
Wall Street, which outperformed Main Street in — reversed roles in the first six months of While the stock market reeled with volatility since January 1, the FAANG stocks generally stood tall throughout the year as the market narrowed and investor interest focused on the anointed stocks. By overtly playing to his base, having little sense of economic history, Trump has contributed to even greater volatility in a market without memory from day to day.
Deutsche Bank DB contributed further to the new regime of volatility. Despite these intrusions — up until a week ago — stocks climbed steadily higher. I shorted into that rise. Since my marshalling assignment at the US Open at Shinnecock, the markets have declined for six consecutive trading sessions. It also has been a bad time for six others: That policy and those negotiating tactics hold the risk that business confidence could be jeopardized and supply chains may be disrupted.
In turn, the real economy is vulnerable.
The Second Half of My concerns are multiple over the balance of the year: The possibilities of policy errors fiscal and monetary are multiplying. The Fed is tightening.
If the global economic foundation is as weak as I believe, our central bank may go too far in raising rates. A poorly and hastily crafted trade policy, though not having a large direct impact on the domestic economy, could deliver a big psychological drain to business confidence. In a flat and interconnected world economy, global cooperation is at an all time low.
The corporate tax reduction will likely trickle up and not down. Debt is out of control and politicians are paralyzed.
Both the Democrats and Republicans are guilty of fiscal irresponsibility. The Global Citigroup Economic Surprise Index is weakening even China is slowing — worldwide growth is becoming more ambiguous, less steady and less reliable.
The yield curve continues to flatten — underscoring the fragility of domestic economic growth. More contraction may lie ahead. The markets are growing more illiquid and with so many market participants worshiping at the altar of price momentum — market structure is a risk with so many on one side of the boat.
The hotel where I stayed was obviously once a grand place to be. Whilst I love exploring the capital of Harare , with its child-friendly lifestyle and array of outdoor eateries, there is always a hankering to go somewhere truly wild.
With strength in the US dollar and emerging weakness in the EU and elsewhere, US denominated debt concerns could continue to raise issues regarding the emerging markets. Acting upon his impulses, growing more isolated and becoming more unhinged — the Supreme Tweeter is now an Orange Swan headwind. In my view, this is market unfriendly and one of the reasons the markets may continue to act poorly.
We witnessed this during the campaign and we now see it in the government of the U. Nowhere is it as clear as in the trade tariffs being levied towards China and other nations.
We paused to sit on the verandah and drink it all in. As you can imagine we were three brothers, we grew up in Kroonstad on a potato and pig farm. Nowhere is it as clear as in the trade tariffs being levied towards China and other nations.
Meanwhile, the sounds and pictures of recent immigration policy grow move vivid and a potential Blue Wave may loom only four months from now — creating the potential for even more uncertainty.
It is looking increasing likely that the November mid-term elections could result in important changes in the majorities and point to the increased likelihood that little meaningful legislation may be forthcoming over the balance of the Trump Presidency.
As I put it in my Surprise 1 in my 15 Surprises for Politics is Upended in as the U. With a malfunctioning and disorganized administration, almost nothing gets done in Washington, D. The House falls to the Democrats in the November mid-term election, but the Senate remains barely by one seat in control of the Republicans. House Speaker Paul Ryan, recognizing the need for party change, resigns.
I feel like a lot of people are waiting for the moment to jump off the train — it could be a hard fall. Investors should consider taking C.
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