Some days, the reality of the market hits me like a clear, crisp sunny morning after a rain the night before – I step out into the light and I understand …
This morning, my perusal of the world news reminded that the market is about people, people just like you and me, and in that reality, it is as clear as a sunny morning after a rain that when market folks are happy, the market will reflect that, eventually.
- Investor Confidence Rises in March by 15.1 Points to 120.1.
True, in the moment, the market is about trading, but traders are not the entirety of the market. Most market folks are of the investor class, and that money moves more slowly and more cautiously, and it moves on the fundamentals of both the market and economies, eventually.
- Confidence among North American investors increased the most, with the North American ICI rising 30.0 points to 135.4, up from February’s revised reading of 105.4.
So, right here on the North American soil, right here in the USA, investors are feeling most confident; the survey suggests big money will continue to flow into the market, despite what we are seeing these days, the days of wild swings and volatile behavior, the days of the traders’ market.
- “We’ve been in a post-crisis regime characterized by diversification out of international equities and into safer asset classes.
Safer asset classes, such as the US dollar, for example. Oh, and speaking of running for safety, what is going on with gold for the last long while? Isn’t that the asset class that investors seek when the shoot is about to hit fan? Yes, today it is up a whopping $2, which puts it near the magic ceiling of $1200, a ceiling, it seems, it cannot crack for long or very hard.
This speaks to another reality as clear as that morning brightness mentioned earlier – fear is not rampant in the market. This is supported by the VIX as well, which is hanging around the 14.5 mark, a comfortable place for investors to be.
- However, given the continued liquidity provision from major central banks, institutions appear to be developing renewed appetite for global equities,” commented Froot … “However, market sentiment, like the Federal Reserve, will likely be highly data dependent over the next couple of months.”
“… data dependent” is correct, and that “data” is looking better than it did in January and February, the long months of winter, a time when consumer folks hunker down, get the flu, get stuck with one another in small abodes, and generally feel things are not going well. Yet, when they open the door to that sunny morning after the bitter winter, they too get it – they see the light, and that light is that more of them have jobs and there is more money to spend on things other than the cost of the living.
- U.S. consumer confidence unexpectedly rebounded strongly in March, according to a private sector report released on Tuesday.
And the reason consumer folks have more money to spend on things other than living, aside from having a job and seeing their wages rise (even if the rise is slight), is the cost of driving around is a whole lot less than it was, and it has been this way for some time now, allowing consumer folks to stash some cash over the long, cold winter. Now, if those folks feel the way I do after a rain, then they will want to get out and do something, something that generally costs money. Ergo, expect a rise in retail sales come this spring, especially if Iran sees the light as well.
- Shipping sources say Iran is storing at least 30 million barrels of oil on its fleet of supertankers, as Western sanctions keep a lid on sales.
- Iran could increase oil production by some 500,000 barrel per day (bpd) in three to six months if sanctions are removed, and by an additional 700,000 bpd within another year, according to estimates by Facts Global Energy.
Yup, it is all coming down to the data, as the survey mentioned earlier suggests, and that data is not exclusive to North America. In fact, across the pond (as the Brits say), the data is becoming more important as QE sinks in and the euro goes lower.
- The euro skidded to a 10-day low against the dollar on Tuesday, leaving it on track for its worst quarter ever, as investors bet the monetary policies of the euro zone and the United States increasingly would diverge.
The euro going lower is a good piece of data, even if the above paints a horrid image. The lower the euro, the lower the cost of European goods, which makes them more appealing to those around the globe who have more money because oil is cheaper.
Anyway, this morning is bright, even if it did not rain last night.
Trade in the day; invest in your life …
