Skip to content
Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

AMERICA: MARKETS HIGH AND FLYING

U.S. equities hit new highs this week. 

While the biggest of U.S. companies have reduced spending on equipment and other capitalist investments, the cheap money flow into the equity markets keeps pushing the overvalued stocks higher.

According to Atlanta Federal Reserve reports, one in five manufacturers cut spending in the first half of 2019. In fact, the Organization for Economic Co-operation and Development (OECD) said that companies are not reinvesting in machinery, buildings, and software, which could cause the “sluggish performance” of these economies to become “entrenched.”

While businesses blame some of the cutback on trade wars, it’s anathema considering how high equities keep flying, and how much money they’re investing in the markets. If the business sector were overly concerned about slowing global growth, funds would not be flowing into equities at their current pace.

And it is beyond irresponsible and reckless for the business media to also claim that rising consumer concerns are holding back retail sales. The average consumer, or even the informed ones, know little or could care less about trade war details. 

It has nothing to do with policy. If consumers have the money, they’ll spend it; if they don’t, they won’t. 

The same holds true for the equity markets: the more cheap money gamblers get, the more they bet. Just today, the Federal Reserve Bank of New York pumped $92.7 billion into the financial system.

TREND FORECAST: With markets continuing to hit new highs, while consumer confidence dipped for the fourth straight month, President John Williams of the Federal Reserve Bank of New York said, “The U.S. economy is in a very good place… I think we have monetary policy in the right place. The key thing is we’re not locked into any specific decision at policy meetings in the months ahead.” 

We maintain our forecast that as the global economy continues to slow, so, too, will America’s. While we do not forecast a rate cut following the Fed’s upcoming December 2019 meetings, we do forecast further cuts from to zero to negative percent before Election Day 2020.

As we go to press, gold is at the critical $1,450 range per ounce. Should it weaken below that range, we maintain that its bottom will be $1,390 per ounce.

Comments are closed.