If this keeps up, the world will explode. The market is acting normal again, which means we have another day without extreme volatility. I have asked this before recently, but it bears asking again – Is the market finally paying attention to the fundamentals?
Who knows, but I like the idea of it.
So, I have a salient question today, and since I have been the optimist, I will give you my optimistic answer.
- The SPX has risen 110 points in 10 sessions, well above its 20EMA. The only talk is bullish, not a bear to be found anywhere. Are we going to see a pullback? Or is QE from Central Banks daily going to keep the SPX up seemingly forever.
I don’t know about forever, but I do believe, along with a resurgent Europe and Japan, as well as a strengthening US economy, the SPX will keep going up for some time. And, yes, you will see pullbacks here and there, but they will be buying opportunities, not collapses. Neither will they be the beginning of the end, as we will certainly hear from the hilltop screamers.
- Sony is now joining Apple and Google in targeting the hottest new battleground: automobiles. Sony recently invested about 100 million yen ($842,000) to buy a stake of roughly 2 percent in ZMP, a Japanese startup making robot cars.
Britain just authorized its first major road tests for robotic cars, as has California and, I believe, Nevada. Oh, and what about that Apple? iPhones to cars is quite a leap.
- According to the just-released 4Q 2014 Euro area banking lending survey, bank credit standards for all loan categories in the euro area continued to ease in 4Q 2014. Moreover, the survey reported a continuing rise in net loan demand in all categories—especially for loans to non-financial corporations and for consumer credit.
Fundamentally speaking, the above relates to the reader’ question and it relates to my fundamental position that the world is getting better, economically speaking anyway. Where there is regulated and monitored credit, there is growth. The world economy runs on leverage, and so we have it coming back in Europe. Now, that QE thing will help it along and the market will follow.
- Going forward, Euro area banks continue to expect an increase in net demand across all loan categories for 1Q 2015. Banks expect more easing in terms of access to both retail and wholesale funding.
Banks have to be healthy to make an economy run, and US banks have taken years to get back to health. Now, it the European banks are following suit. Get your money in folks because this train has long left station and it is now picking up speed, and lots of it. Think Europe.
- European Union finance ministers piled pressure on Greece on Tuesday to remain in an international financial rescue program as the euro weakened on fears of disruption when Athens’ credit lines expire in 10 days time.
Don’t pay attention to the man behind the curtain. Greece would be really stupid not to remain on board. If it thinks it has problems now, just try to back a currency and sell debt with a worthless economy. All they have is Draghi and the ECB to keep them afloat. Good luck getting Russia and China to float it loans.
As I wrote last Friday, Valentine’s Day is a very important holiday. Did all of you boys and girls pay attention? I know my 15-year-old did, as I (with the help of my friend Miggie) parlayed his romantic idea of having a picnic (all a surprise to his girlfriend) at the beach while the sun sets went off without a hitch.
Okay, that is an outright fib. There were lots of hitches (a minor fender bender in bumper-to-bumper traffic to name one), but it happened beautifully, and all before sunset. Ah … young love.
Trade in the day; invest in your life …
