Tag Archives: Trade Deficit

Inflation, and Sentiment, and Wages… OH MY!?

With all the craziness going on it’s nice to see that things may be (and I want to emphasize “may be”) calming down as investors start to realize this probably isn’t the end of the world and rather a healthy drop in the market. That’s not to say there aren’t plenty of things to worry about, but there also a few positives starting to show up that could help stabilize equities. Here’s a glimpse of what others are saying today:

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Is the Taper Really Priced In?

When bad news is still good news and good news is still bad news for the direction of the US market, has the full extent of FED tapering REALLY been priced in… and if it hasn’t, to what extent has it been? I don’t think anyone knows or even can know the answer to that question.

Today’s market opened in negative territory after investors learned that the ADP private sector employment numbers for November had beaten estimates by 16% and that the US trade deficit narrowed on record exports. However, around 30 minutes after the open, the market reversed course and shot up quickly on word that the ISM service index missed estimates in November

What kind of friggin’ crazy world are we living in? Anyone who can look at you straight faced and tell you that future tapering “has been priced in” is full of shit. When tapering finally begins, and I expect it to sometime next year as the global economy gains traction, this market is going to witness a swift drop until investors realize (again) that there’s no other game in town and that tapering is actually a positive for companies and the economy. I wouldn’t be surprised to finally get that pullback of 10-15% you’ve been hearing about, but don’t expect any setback to last longer than a few weeks.

If you haven’t already, it’s time for to start positioning for rising rates. Keep your yield higher than your duration and you should be fine on a total return basis when the dust settles.