The drama continues and the headlines keep it sensational, right in the public’s eye, as it should be; yet, the market hardly seems panicked. True, the major indices have fallen in 11 of the last 13 sessions, but the fall is more of a drift, a gradual decline that resembles order, not chaos. The DIJA has taken the largest hit, and even that has been gradual and not too bad. If you have time, take a look at the charts for the S&P 500 and the Nasdaq to see what I mean about “hardly panicked.” Oh, heck, I have a little time, so here is the chart for the NASDAQ.
If anything, one could see all of this hoopla about the US government finances as an opportunity for the market to rebalance, a correction of sorts. Panic is not the word of the day, yet, which suggests if the US politicos don’t get their act together soon, panic just might come to Wall St. As of now, the inspirational talk (to get the politicos on board) is all about the negative, about how the US political mismanagement will affect the global economy.
- The 21 countries of the Asia Pacific Economic Cooperation trade group promised on Tuesday to implement responsible macroeconomic policies that will help offset slowing global economic growth and weaker trade. “Global growth is too weak, risks remain tilted to the downside, global trade is weakening and the economic outlook suggests growth is likely to be slower and less balanced than desired,” the group said in a prepared statement.
“… risks remain tilted to the downside” is the phrase that leaps out. With both China and Japan holding steady, this leaves only the US and Europe to view as participants not rising up to do their job in world trade. Europe is trying, as the latest batch of numbers demonstrates and Germany, the engine of the European economy, is still working hard to do its part.
- Germany’s trade surplus rose to €15.6B in August from €15B in July and topped consensus of €15.1B. Exports recovered to rise 1% on month from a fall of 0.8%, while imports increased 0.4%.
But, even in that encouraging report is a subtle reminder that the US political brinksmanship could affect the US economy of the nonsense goes on too long.
- “Global trade remains off-color, which is putting the brakes on German exports,” says Thomas Gitzel at VP Bank.
Yet, and still, the potential for near-term global economic strengthening is buried deep in the numbers many market players miss because the headlines grab their attention.
- The outlook for the coming months [Germany] is much more promising. Important freight indicators have risen considerably.
And so it goes … Another day, another day of embarrassment, another round of stupidity. As an infamous man once said so long ago in California, “Why can’t we all just get along?” It makes sense to me, if we all agree that a healthy global economy works best for all.
Trade in the day; Invest in your life …
