I have uploaded a January 30th Market update. Click here to go to the show archives page to listen or you can listen on the link below.
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-The Fed blew the doors off the market. What a change in only about five weeks. This is completely unprecedented. They even issued a separate statement on their asset balance sheet actions.
-The Fed will probably keep an oversized balance sheet on an ongoing basis (a significant buffer). The Fed hinted at rates cuts and balance sheet additions.
-Powell discussed how liquidity needs (meaning monetization of gov’t debt) continue to balloon.
-The trading community is betting on rate cuts starting in January 2020, with little chance of additional rate hikes in this cycle.
-The Dow futures briefly took out the 100 & 200 day mva, and stand right at them as I write. The S&P and Nasdaq are moving closer to these important mva’s.
-Look at what FB has done in the aftermarket. There is a lot of money that sold out and needs to be redeployed. I bought more stocks right after the Fed announcement. I will sell on any further lift. Perhaps the lift might be getting long, but don’t count out any spikes higher.
-Look at how gold, silver, oil have done. The XOP is bumping against 31 resistance.
-This does not mean that the global economy is out of the woods, but this goes a long way to calm the global credit markets.
-The Fed is increasingly discussing how its policy is affecting the global economy. It previously operated with little emphasis on its actions and the rest of the world. The dollar fell and this helps to calm global dollar debt markets.
-The central banks, led by the Fed, will do whatever it takes to support asset prices.
-I contemplate a world where the central banks will have expanded balance sheets and will do whatever it takes to make certain asset prices grow. With bond yields clearly on the down trend, I see items like real estate finding support again.
-If the Fed gets any more dovish we may begin to hear about how Larry Summers wants negative short term rates again.