Market Montage
Stock Market, Economics, Equity Analysis
Sep13
$40B a month of QE (completely focus on MBS) until at least end of year
Exceptionally low rates pushed out to at least mid 2015.
More or less what was whispered….except that all the QE will be in the mortgage market, rather than a mix of Treasuries and mortgage backed securities.
Big line here —> FOMC: "expects that a highly accommodative stance…will remain appropriate for a considerable time after the economic recovery strengthens"
Sep12
Been a rough few months for the former high flier Monster Beverage (MNST). Late this spring the stock briefly rocketed intraday to near $80 on a report Coca Cola would make a move to take the company over. (later disputed) Then the stock suffered along with the rest of the market May through July. A weak report smashed it mid August, and this morning a disclosure about the NY AG probing the industry of energy drinks for misleading practices hit the WSJ and is crushing the stock anew. …
Sep12
It's been a rough week for the NASDAQ as the index has given back a big portion of last Thursday's gap and go session.
A lot of this is due to an over reliance on Apple – which of course has been a big positive in 2012 as the stock has had a huge run. But going into this afternoon's iPhone 5 launch the stock has sold off in a material way (relative to it's normal history). …
Sep12
While this bailout fund approval was widely expected by the German court it was a potential fly in the ointment. Futures are happy with the result as we begin day 1 of the Fed meetingl the euro rallies and the dollar continues a major swoon. Via Reuters:
- Germany's Constitutional Court gave a green light on Wednesday for the country to ratify the euro zone's new rescue fund and budget pact but gave parliament veto powers over any future increases in the size of the fund.
- Rejecting injunction requests from 37,000 plaintiffs seeking to block the treaties, the court said ratification of the European Stability Mechanism(ESM) could go ahead with the "proviso" that German liability be limited to 190 billion euros ($244.77 billion), as agreed in the ESM treaty. Any increase in that amount would require prior approval by the Bundestag lower house of parliament.
- The plaintiffs, including euroskeptics from Chancellor Angela Merkel's ruling center-right coalition and Left Party hard-liners opposed to European integration, had argued that the treaties expose Germany to unlimited financial liability and cede too much sovereignty to centralized European authorities. The court ruled as it has in the past that deeper integration of the European Union did not violate the German "Basic Law" as long as parliament was fully consulted.
Sep11
I am using the UUP ETF as a stand in for the actual dollar since it charts real time on stockcharts.com but as you can see below, the U.S. dollar is in an extremely oversold position. I believe the general thinking of the market is since (a) Draghi will do "whatever it takes" to keep the euro together, you have the euro breakup scenario off the table and (b) the Fed will be doing a pure QE while the ECB will be doing sterilized actions, hence the dollar loses the ugly duckling contest. And as we know, when the dollar pukes usually every risk asset rises. That said, things can get to an extreme – so it is interesting this is happening just before a Fed meeting. …
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