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markets 6.17.13



Good Monday morning, and welcome to the melt up.

Japanese stocks are bouncing 2 – 3% after getting schmeissed last week and month. From a 96% twelve month gain, we saw the yen strengthen. Not coincidentally, the Nikkei Dow fell over 20%. Last week saw the Yen’s biggest weekly advance in four years. That counter trend rally seems to have reversed, and once again the Yen is falling — its down nearly 0.5% versus its 16 most-traded counterparts today.

This week we have the Federal Reserve meeting, and you should, if you have any situational awareness whatsoever, already know the outcome of that meeting. Bernanke to Hilsenrath to anyone-who-is-paying-attention is the FOMC version of baseball’s Tinker to Evers to Chance.

I believe it is an analysis of the facts and history, and not a forecast, to suggest that the FOMC will stand pat. Anything can and will happen — Humans are involved — but the odds are very much against it.

And if you want even more bullish data, Bloomberg reminds us that “equities tend to rise when the Federal Reserve begins reducing efforts to stimulate the economy.”


Back shortly . . .


Category: Federal Reserve, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Monday Morning Melt Up”

  1. Chief Tomahawk says:

    I’ve been tracking a Tokyo trip on Expedia off-and-on for the past couple of months… what with the Japanese government putting the Yen on sale and all. With the recent recovery in the Yen (some claim the prime minister has an important election coming up as for the reason of him ‘backing off’), the Expedia package price has gone up $500.

  2. PeterR says:

    SPY MA(20) resistance at 164.5 +/- could mark a quadruple top on the 60-minute chart.

    MartketWatch headline: “Futures up Sharply on Hopes of Fed Clarity.”

    Will this Options Week market embark on the “QE Hope” to new highs above MA(20) or fail here at prior-highs resistance?


  3. rd says:

    Apparently economists believe that the higher interest rates are because of the Fed….

    I am getting really confused now. I thought that the Fed Funds rate was usually about equal to inflation during a “normal” economic period and long interest rates would be 2% or so above inflation. Therefore, interest rates have been depressed a couple of percentage points below a reasonable normal equilibrium rate by the Fed actions.

    So it seems like economists (apparently a hmogenous group as WSJ doesn’t really disaggregate them)seem to believe that Bernanke needs to be like Sandra Bullock in Speed, with his foot on the floor careening interest rates at 50 mph through the world’s economy and an improving economy doesn’t have much to do with interest rates.

  4. [...] Ritholtz has a great analogy today that the FOMC trade is an economic version of baseball’s Tinker to Evers to Chance double play. Simply follow the bouncing ball, guys. (The Big [...]