The market forecast for today calls for some green early in the a.m., then turning red, becoming less red, turning green again with maybe some green holding on throughout the afternoon. The low-pressure durable goods order that came in overnight is having an effect, but it appears the report will bring little damage. If you are planning to buy today, go about your business without worry of getting drubbed, but be wary of the forecast for September.
- Indeed, global central bankers at the Fed’s annual Jackson Hole policy conference in Wyoming warned on Saturday that global financial stability is at risk as ultra-easy policies that have flooded the world with cash are wound up.
The coming month threatens the relative recent calm of the market. The now almost for-sure QE tapering set to begin in mid-September is, well, maybe not so almost for-sure and this uncertainty promises at least some red in September.
- Data out on Friday showing sales of new U.S. single-family homes fell to their lowest in nine months raised doubts about whether the Fed afford to start to pull back next month and gave investors an excuse to buy back severely beaten-down assets.
At least market investors are preparing for the longer-term positive forecast for lots of green, yet, again, the forecast for September promises more high pressure streaming in from the polar regions where bearish turbulence constantly agitates and creates pressure.
- The ambivalence of August has brought some ups and downs for the stock market, but once the vacation season ends, we will see trading volume increase and a full schedule of potentially catastrophic issues which must be addressed by September’s stock market.
We also have the looming threat of a budget battle when Congress returns from recess in September. Although it appears this event will roll in and then roll out, as it mixes with the other uncertainties of September (inconsistent economic data, QE tapering, and …), the short-term damage could be extensive but not long lasting. Computer models project red turning to green this fall and then green increasing and holding on through the end of the year.
- Japan, responding to aggressive monetary stimulus and a weaker yen, is forecast to report a rebound in industrial output and household spending alongside an acceleration in consumer price inflation – just as the Bank of Japan wishes.
- In Germany, economists are penciling in a rise in the IFO business climate index for August to 107.0 from 106.2 as well as a solid rise in retail sales and a dip in the number of jobless. After data on Friday showed Germany’s 0.7 percent rise in second-quarter GDP was driven by domestic demand, including a rebound in business spending.
Stay tuned into this local market channel for updates on the forecast, as you never know when a dark cloud mass will emerge and you never know what high or low pressure event will materialize that will change both the short and long-range market forecasts.
Trade in the day; Invest in your life …
