Looking Ahead – When the Going Gets Tough…

In times like these, as the saying goes, the tough get going. In financial markets, though, when the going gets tough, the Fed gets going, with rate cuts, accommodative forward policy guidance, even asset purchases (aka quantitative easing or QE). This is what market participants have come to depend on over the years, with the post-global financial crisis years cementing this concept of the “Fed put,” because the Fed has given them every reason to expect support in times of market volatility.

Looking ahead to next week, the calendar features US nonfarm payroll data, global purchasing managers’ indexes (PMIs), and central bank meetings in Australia and Canada.

Looking Ahead – Trigger Warnings

Skeptics assert that the ability of the S&P 500 to register a series of record highs in recent weeks despite the ongoing coronavirus outbreak is proof that a mix of investor complacency, programmatic trading, passive investing, and permissive central bank liquidity is preventing rational price discovery in equity markets. Although we do not dismiss this viewpoint, there is an alternate explanation rooted in fundamentals – assuming reasonably timely success of containment efforts, lost output will be paid back with interest in a ü-shaped rather than not V-shaped recovery, Beijing will be engaged in vigorous stimulus efforts, and global central banks will have eased policy to an even more accommodative level then before the epidemic…Sign up for Markets Policy Pro to read the full piece.

Looking ahead to next week, the calendar features some key US economic data.

  • US Economic Data
  • US Housing Data
  • EU Economic Data

Looking Ahead – Bizarre Love Triangle

In a year that has already featured a seemingly disproportionate degree of disquieting developments, this Valentine’s Day provides a timely opportunity to pause and reflect upon those we care about. In the financial world, love is in the air as well, with market participants entangled in a torrid and potentially complicated love triangle with two very different assets.

Looking ahead to next week, the calendar features global manufacturing data.

  • Global Factory Data
  • Fed Minutes
  • US Housing Data
  • China Central Bank
  • EU Economic Data

 

Looking Ahead – Herd Immunity?

Trump supporters might be tempted to link this week’s US stock rally with the President’s good week, but global equities all rallied in tandem, suggesting broad hopes of virus containment as the real upside catalyst. EU stocks even outpaced the S&P 500 over the past five sessions, which seems unlikely to be attributable to rising Republican optimism over their chances in November.

Looking ahead to next week, the calendar features US and global data and Fed testimony.

Looking Ahead – Tariff Man or Davos Man?

Will trade/tariff fights reemerge as a major risk in 2020?

Looking ahead to next week, more 4Q earnings are due alongside US and Chinese economic data and meetings for the Federal Reserve and the Bank of England.

• Corporate Earnings
• US Economic Data
• US Housing Data
• Federal Reserve
• Bank of England
• EU Economic Data
• China Economic Data