KTFA:
BACKDOC: NO MATTER HOW MUCH JANET YELLEN TALKS ABOUT A 2% INFLATION RATE GOAL CHRISTINE IS BEING HONEST.
SHE AT LEAST ADMITS THERE IS BASICALLY NO GROWTH IN THE WORLD ECONOMIES!
IS IT ANY WONDER THAT THE IMF SAYS TO THE EMERGING MARKETS, HEY GUYS YOU CAN ACTIVATE YOUR REFORMS! HEE HEE DOC IMO
Mountainman: Well.......There has to be A SHIFT at Some Point.....Yes ALL is Poised to Change Gears.......The Economic Forecast is NOT Good if You are in the Markets.....Will the Fed change Rates this Month......Sure seems APRIL SHOWERS are About to bring Out those May Flowers......IMO.....But Hey......I'm Not A Weatherman Anyway.......LOL.......(8)=New Beginnings
....
BACKDOC: NO MATTER HOW MUCH JANET YELLEN TALKS ABOUT A 2% INFLATION RATE GOAL CHRISTINE IS BEING HONEST.
SHE AT LEAST ADMITS THERE IS BASICALLY NO GROWTH IN THE WORLD ECONOMIES!
IS IT ANY WONDER THAT THE IMF SAYS TO THE EMERGING MARKETS, HEY GUYS YOU CAN ACTIVATE YOUR REFORMS! HEE HEE DOC IMO
Mountainman: Well.......There has to be A SHIFT at Some Point.....Yes ALL is Poised to Change Gears.......The Economic Forecast is NOT Good if You are in the Markets.....Will the Fed change Rates this Month......Sure seems APRIL SHOWERS are About to bring Out those May Flowers......IMO.....But Hey......I'm Not A Weatherman Anyway.......LOL.......(8)=New Beginnings
....
Thunderhawk: Backdoc Alert
This is what could create some turbulence Friday
Fed officials from different camps speak ahead of Friday's Wall Street open, and they could make some waves in already seasick markets.
"Market nerves are starting to get a little frayed right now. You can see it in the risk markets," said Ward McCarthy, chief financial economist at Jefferies. "I think there's potential (for market impact). What's been interesting to me is you've had a parade of Fed officials some of whom are extremely dovish, and they've been a whole lot less pessimistic and a lot less dovish than (Fed Chair) Janet Yellen, since the last meeting."
Speaking on Friday is New York Fed President William Dudley, who is seen as closely aligned with Yellen — in the dove camp. He speaks at 8:30 a.m. EDT on the regional and national economy in Connecticut. Philadelphia Fed President Patrick Harker gives remarks at an investment conference in Camden, New Jersey, at 9 a.m. EDT, and he has recently called for the central bank to get on with rate hikes. Dallas Fed President Rob Kaplan speaks later on the political economy of Texas and Mexico at 9:30 a.m. EDT.
"Unfortunately they seem in muddled message mode right now," said McCarthy. Markets will also digest the comments of more hawkish Kansas City Fed President Esther George, who was to speak Thursday evening. George is the one member who dissented at the last central bank meeting, when it voted to keep rates unchanged.
There will also be comments to consider from Yellen herself, plus her last three predecessors, at an unprecedented panel discussion Thursday evening.
Some of the more hawkish Fed presidents have been calling for rate hikes, but the markets snapped to attention when Yellen delivered a very dovish speech last week, detailing risks to the economic forecast and pointing to a slow and cautious path for the central bank. Those comments reinforced the dovish message from the Fed's March meeting, and markets have adjusted.
The currency market in particular has responded to the Fed, with the dollar losing ground. The greenback has declined more than 5 percent against the yen since the March 16 FOMC meeting.
Dollar/yen kept gathering steam Thursday, with the yen at 108 against the dollar after breaking 110 a day earlier. The move has been perplexing since Japan has gone to negative yields, and its economy is weak.
The S&P 500 fell 1.2 percent to 2,041, just under a significant support level, while Treasury yields moved lower. The 10-year yield edged down and was at 1.68 percent in late trading. West Texas Intermediate crude futures fell 1.3 percent to $37.26.
"I would say the spike in the yen put a dagger in the heart of the financial community. They're afraid that (Japanese Prime Minister Shinzo) Abe and (Bank of Japan Governor Haruhiko) Kuroda are going to do something drastic, like taking rates much more negative. They don't think they're going to be able to do that for long," said Art Cashin, UBS director of floor operations at the NYSE. "It will put more pressure on the banking system if either Japan or Europe gets much more negative in their rates."
The move in the yen has been spooking some in the markets, who see it as a currency that has usually benefited during a flight to safety.
"I think investors are sort of trading on a slower growth tilt," said Jack Ablin, CIO of BMO Private Bank. "When you add up the lower stocks, lower interest rates, yen higher, gold higher, oil lower, it's a complete setup."
Ablin said the stock market is seeing more stretched values after the recent runup, and it faces a tough earnings season, beginning next week.
Besides Fed speakers Friday, there is wholesale trade data at 10 a.m. EDT.
http://ift.tt/1MkGwSa
************
BACKDOC: IT SEEMS JAPAN IS STARTING TO SPIN OUT OF CONTROL. THE FED MAY JUST HAVE TO RAISE RATES SOON JUST TO HELP OUT THE YEN!
IT SEEMS THAT THEY MAY HAVE TO GET INVOLVED IN EQUITIES JUST TO DO MORE QE IN JAPAN! THAT'S NUTS! THE PRESSURES ARE MOUNTING GLOBALLY AND THERE IS NO ESCAPE MY FRIENDS. ON ALERT BUT NOT ALARM? MMMMM
DOC IMO
Mountainman: As New Values Approach....... the Rising of the Sun is Bringing New Sunshine for A New Day......Confidence in the Dollar and Our Market isn't Helping either......The ??? is How Long Will Things Persist before they Move Economies Forward ???......As the Global Reforms TURN.......Investors are Looking for A "Safe Haven" from the [FALL]of Currencies....and The Yen May turn Out in the Long Run......IMO
Blessings,Mountainman (8)=New Beginnings
Thunderhawk: Backdoc Alert
What the Bank of Japan will do now that negative rates have disappointed
The Bank of Japan's (BOJ) foray into negative interest rates hasn't yielded positive results, and the central bank's arsenal is getting thin.
That's spurring analysts to speculate the BOJ's next attempt at easing may target scooping up more assets in the stock market.
"They tried negative rates. It didn't work," Mark Matthews, head of research for Asia at private bank Julius Baer, told CNBC Wednesday. "I think what they will do … is they will announce more quantitative easing, probably through equities."
Analysts have said they expect the BOJ to ease policy further as economic growth forecasts remain anemic and inflation is still well below the central bank's target of 2 percent.
The rise in the yen has also fanned concerns over the impact on exports. Finance Minister Taro Aso said Friday the government would take steps as needed to arrest the yen's ascent.
The next policy meeting outcome will be announced April 28.
In addition to purchasing Japan government bonds (JGBs), the BOJ's massive 80 trillion yen ($712.16 billion) worth of quantitative easing annually already targets Japan real-estate investment trusts (J-REITs) and exchange-traded funds as well as corporate bonds.
But purchases of JGBs may be losing their punch, with the BOJ now owning more than a third of the country's outstanding government bonds.
"[Quantitative easing] is at the end of its limits. All you're doing is building up excess reserves in the banking system," Marvin Barth, global head of foreign-exchange strategy at Barclays, told CNBC's Street Signs Tuesday.
That may have been one driver of the BOJ's decision to introduce negative interest rates in late January. But that move didn't appear to have had the desired impact on markets, with the yen strengthening, rather than weakening.
Additionally, last week, the BOJ's Tankan survey of big manufacturers showed confidence worsened more than expected in the first quarter, with the decline in part due to the negative-rate policy.
Cutting interest rates further into negative territory may be difficult for the BOJ.
From a political perspective, "negative rates are not going to be popular in a country where 54 percent of household assets are in demand deposits," noted Barth.
That may leave the BOJ with buying assets in the stock market. Marcel Thieliant, an economist at Capital Economics, said via email he expects the BOJ will increase its ETF purchases by 5 trillion yen, with an additional "token" increase in J-REIT purchases. That would be on top of a 5 trillion yen increase in JGB purchases, likely at the upcoming meeting, he said.
One thing analysts don't expect the BOJ to buy: foreign bonds. That's because it would break the country's commitments to avoid currency manipulation.
Indeed, in a Wall Street Journal interview published Wednesday, Prime Minister Shinzo Abe said "we must definitely avoid competitive devaluation, and I think we should refrain from arbitrary intervention in currency markets."
Julius Baer's Matthews said those comments were "like blood on the water for the sharks," as it signaled Japan likely wouldn't intervene to stem the rising yen anytime soon. The yen has strengthened to its highest level against the dollar since October 2014, with the dollar fetching 109.47 yen Thursday morning, down from levels over 120 yen touched in January.
That's a negative for corporate Japan, noted Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, in a note Wednesday.
"Most Japanese corporations are hedged at 115 so they are bleeding profits at 110 and lower," she said.
That's ominous for hopes that Japanese companies will increase wages and investment to spur economic growth.
To be sure, the BOJ's policies haven't been completely unsuccessful.
While the country hasn't managed to hit its 2 percent inflation target, Barclays' Barth noted that Japan has seen the best inflation performance among G10 countries for the last three years, citing data showing core inflation has gone from negative 0.5 percent to positive 1 percent.
Additionally, Societe Generale has pointed to some positives from last week's Tankan report.
While the headline figure disappointed, Societe Generale noted the lending attitude diffusion index for small and medium enterprises improved substantially to positive-20 from positive-17 in the fourth quarter, before the BOJ adopted negative interest rates at the end of January.
Societe Generale considers that a good forecasting tool for domestic demand, particularly as it helps to support sectors including construction and real estate.
Indeed, while the rise in the yen followed the BOJ's move to a negative interest rate policy, there are reasons to believe that correlation isn't causation. One of the reasons the yen is rising is on its status as a safe-haven currency, with inflows into the currency driven by market volatility. Another driver is due to U.S. dollar weakness as the market dials back its expectations for U.S. Federal Reserve interest rate hikes.
Capital Economics, in a note earlier this week, has also cited speculative traders covering large net short positions in the yen. Those likely built up due to expectations of the effectiveness of the BOJ's quantitative easing policy.
http://ift.tt/1SRBCvl
This is what could create some turbulence Friday
Fed officials from different camps speak ahead of Friday's Wall Street open, and they could make some waves in already seasick markets.
"Market nerves are starting to get a little frayed right now. You can see it in the risk markets," said Ward McCarthy, chief financial economist at Jefferies. "I think there's potential (for market impact). What's been interesting to me is you've had a parade of Fed officials some of whom are extremely dovish, and they've been a whole lot less pessimistic and a lot less dovish than (Fed Chair) Janet Yellen, since the last meeting."
Speaking on Friday is New York Fed President William Dudley, who is seen as closely aligned with Yellen — in the dove camp. He speaks at 8:30 a.m. EDT on the regional and national economy in Connecticut. Philadelphia Fed President Patrick Harker gives remarks at an investment conference in Camden, New Jersey, at 9 a.m. EDT, and he has recently called for the central bank to get on with rate hikes. Dallas Fed President Rob Kaplan speaks later on the political economy of Texas and Mexico at 9:30 a.m. EDT.
"Unfortunately they seem in muddled message mode right now," said McCarthy. Markets will also digest the comments of more hawkish Kansas City Fed President Esther George, who was to speak Thursday evening. George is the one member who dissented at the last central bank meeting, when it voted to keep rates unchanged.
There will also be comments to consider from Yellen herself, plus her last three predecessors, at an unprecedented panel discussion Thursday evening.
Some of the more hawkish Fed presidents have been calling for rate hikes, but the markets snapped to attention when Yellen delivered a very dovish speech last week, detailing risks to the economic forecast and pointing to a slow and cautious path for the central bank. Those comments reinforced the dovish message from the Fed's March meeting, and markets have adjusted.
The currency market in particular has responded to the Fed, with the dollar losing ground. The greenback has declined more than 5 percent against the yen since the March 16 FOMC meeting.
Dollar/yen kept gathering steam Thursday, with the yen at 108 against the dollar after breaking 110 a day earlier. The move has been perplexing since Japan has gone to negative yields, and its economy is weak.
The S&P 500 fell 1.2 percent to 2,041, just under a significant support level, while Treasury yields moved lower. The 10-year yield edged down and was at 1.68 percent in late trading. West Texas Intermediate crude futures fell 1.3 percent to $37.26.
"I would say the spike in the yen put a dagger in the heart of the financial community. They're afraid that (Japanese Prime Minister Shinzo) Abe and (Bank of Japan Governor Haruhiko) Kuroda are going to do something drastic, like taking rates much more negative. They don't think they're going to be able to do that for long," said Art Cashin, UBS director of floor operations at the NYSE. "It will put more pressure on the banking system if either Japan or Europe gets much more negative in their rates."
The move in the yen has been spooking some in the markets, who see it as a currency that has usually benefited during a flight to safety.
"I think investors are sort of trading on a slower growth tilt," said Jack Ablin, CIO of BMO Private Bank. "When you add up the lower stocks, lower interest rates, yen higher, gold higher, oil lower, it's a complete setup."
Ablin said the stock market is seeing more stretched values after the recent runup, and it faces a tough earnings season, beginning next week.
Besides Fed speakers Friday, there is wholesale trade data at 10 a.m. EDT.
http://ift.tt/1MkGwSa
************
BACKDOC: IT SEEMS JAPAN IS STARTING TO SPIN OUT OF CONTROL. THE FED MAY JUST HAVE TO RAISE RATES SOON JUST TO HELP OUT THE YEN!
IT SEEMS THAT THEY MAY HAVE TO GET INVOLVED IN EQUITIES JUST TO DO MORE QE IN JAPAN! THAT'S NUTS! THE PRESSURES ARE MOUNTING GLOBALLY AND THERE IS NO ESCAPE MY FRIENDS. ON ALERT BUT NOT ALARM? MMMMM
DOC IMO
Mountainman: As New Values Approach....... the Rising of the Sun is Bringing New Sunshine for A New Day......Confidence in the Dollar and Our Market isn't Helping either......The ??? is How Long Will Things Persist before they Move Economies Forward ???......As the Global Reforms TURN.......Investors are Looking for A "Safe Haven" from the [FALL]of Currencies....and The Yen May turn Out in the Long Run......IMO
Blessings,Mountainman (8)=New Beginnings
Thunderhawk: Backdoc Alert
What the Bank of Japan will do now that negative rates have disappointed
The Bank of Japan's (BOJ) foray into negative interest rates hasn't yielded positive results, and the central bank's arsenal is getting thin.
That's spurring analysts to speculate the BOJ's next attempt at easing may target scooping up more assets in the stock market.
"They tried negative rates. It didn't work," Mark Matthews, head of research for Asia at private bank Julius Baer, told CNBC Wednesday. "I think what they will do … is they will announce more quantitative easing, probably through equities."
Analysts have said they expect the BOJ to ease policy further as economic growth forecasts remain anemic and inflation is still well below the central bank's target of 2 percent.
The rise in the yen has also fanned concerns over the impact on exports. Finance Minister Taro Aso said Friday the government would take steps as needed to arrest the yen's ascent.
The next policy meeting outcome will be announced April 28.
In addition to purchasing Japan government bonds (JGBs), the BOJ's massive 80 trillion yen ($712.16 billion) worth of quantitative easing annually already targets Japan real-estate investment trusts (J-REITs) and exchange-traded funds as well as corporate bonds.
But purchases of JGBs may be losing their punch, with the BOJ now owning more than a third of the country's outstanding government bonds.
"[Quantitative easing] is at the end of its limits. All you're doing is building up excess reserves in the banking system," Marvin Barth, global head of foreign-exchange strategy at Barclays, told CNBC's Street Signs Tuesday.
That may have been one driver of the BOJ's decision to introduce negative interest rates in late January. But that move didn't appear to have had the desired impact on markets, with the yen strengthening, rather than weakening.
Additionally, last week, the BOJ's Tankan survey of big manufacturers showed confidence worsened more than expected in the first quarter, with the decline in part due to the negative-rate policy.
Cutting interest rates further into negative territory may be difficult for the BOJ.
From a political perspective, "negative rates are not going to be popular in a country where 54 percent of household assets are in demand deposits," noted Barth.
That may leave the BOJ with buying assets in the stock market. Marcel Thieliant, an economist at Capital Economics, said via email he expects the BOJ will increase its ETF purchases by 5 trillion yen, with an additional "token" increase in J-REIT purchases. That would be on top of a 5 trillion yen increase in JGB purchases, likely at the upcoming meeting, he said.
One thing analysts don't expect the BOJ to buy: foreign bonds. That's because it would break the country's commitments to avoid currency manipulation.
Indeed, in a Wall Street Journal interview published Wednesday, Prime Minister Shinzo Abe said "we must definitely avoid competitive devaluation, and I think we should refrain from arbitrary intervention in currency markets."
Julius Baer's Matthews said those comments were "like blood on the water for the sharks," as it signaled Japan likely wouldn't intervene to stem the rising yen anytime soon. The yen has strengthened to its highest level against the dollar since October 2014, with the dollar fetching 109.47 yen Thursday morning, down from levels over 120 yen touched in January.
That's a negative for corporate Japan, noted Kathy Lien, managing director of foreign-exchange strategy at BK Asset Management, in a note Wednesday.
"Most Japanese corporations are hedged at 115 so they are bleeding profits at 110 and lower," she said.
That's ominous for hopes that Japanese companies will increase wages and investment to spur economic growth.
To be sure, the BOJ's policies haven't been completely unsuccessful.
While the country hasn't managed to hit its 2 percent inflation target, Barclays' Barth noted that Japan has seen the best inflation performance among G10 countries for the last three years, citing data showing core inflation has gone from negative 0.5 percent to positive 1 percent.
Additionally, Societe Generale has pointed to some positives from last week's Tankan report.
While the headline figure disappointed, Societe Generale noted the lending attitude diffusion index for small and medium enterprises improved substantially to positive-20 from positive-17 in the fourth quarter, before the BOJ adopted negative interest rates at the end of January.
Societe Generale considers that a good forecasting tool for domestic demand, particularly as it helps to support sectors including construction and real estate.
Indeed, while the rise in the yen followed the BOJ's move to a negative interest rate policy, there are reasons to believe that correlation isn't causation. One of the reasons the yen is rising is on its status as a safe-haven currency, with inflows into the currency driven by market volatility. Another driver is due to U.S. dollar weakness as the market dials back its expectations for U.S. Federal Reserve interest rate hikes.
Capital Economics, in a note earlier this week, has also cited speculative traders covering large net short positions in the yen. Those likely built up due to expectations of the effectiveness of the BOJ's quantitative easing policy.
http://ift.tt/1SRBCvl
Backdoc: FOR AWHILE I TOLD YOU THAT THE BIGGER COMPANIES WERE BUYING BACK STOCK WHILE THE DOLLAR HAS HIGH PURCHASING POWER. MY GUESS IS WE WILL SEE THE NEXT LEG DOWN ON THE REPRICING SOON. A STRUCTURAL MONETARY REFORM RATE MAY ONLY MAKE IT HAPPEN QUICKER!
DOC IMO
Thunderhawk: Backdoc Alert
The end of short covering and 'Fed put' spells market trouble
Two important trends that have helped propel the stock market are coming to an end, posing significant challenges for investors, according to Wall Street experts.
One is a near-term pattern — namely the rush to cover short positions that has driven the S&P 500 more than 13 percent off its Feb. 11 intraday low. JPMorgan Chase's models show that short covering is running out of gas.
The other is longer term — namely the oft-cited "Fed put," or the backstop traders believe has come from the U.S. central bank's easy monetary policy. Strategists at Bank of America Merrill Lynch see a pattern in which the riskiest stocks that benefit the most from Fed policy are now underperforming their higher-quality peers.
Both JPMorgan and BofAML agree on one element of strategy: The shift should be on from momentum to value stocks as the rally stumbles. Major averages were down nearly 1 percent across the board in Thursday trading.
"We think this recovery has been largely driven by fundamentally insensitive strategies and broad-based short covering," Dubravko Lakos-Bujas, JPMorgan's head of U.S. equity strategy, and others said in a note to clients. Models the firm uses to monitor market trends imply "little room left for further short covering" while trend followers "have covered most of their shorts and are currently close to being neutral equities."
If the analysis holds that the rally has been fueled largely by position shifts and not fundamentals, then it comes at a perilous time.
Wall Street is heading into a first-quarter earnings season that promises to be ugly, with FactSet estimating aggregate S&P 500 earnings to decline 8.5 percent. It would be the worst three-month period since the third quarter of 2009 and the first time the index had shown four consecutive quarters of decline in seven years.
While much of the blame has been put on energy, which is expected to show a drop of 101.8 percent from the year-earlier period, even excluding the sector produces an expected decline of 3.7 percent, FactSet reported. Just three of the index's 10 sectors are expected to show growth.
Economic fundamentals also are deteriorating.
Gross domestic product grew just 1.4 percent in the fourth quarter and is expected to rise an even more anemic 0.4 percent in the first quarter, according to the Atlanta Fed's tracker. With little earnings or economic growth to serve as a tail wind, the market's path higher will be difficult.
"With most of the technical factors having already run their course and with equity valuation at elevated levels, we believe a reacceleration in earnings growth and weaker (U.S. dollar) are needed to warrant a more constructive view on U.S. equities," Lakos-Bujas said. "The fundamental backdrop remains challenged."
Normally the market then would look to the Fed for some type of policy help to keep the rally going.
However, the central bankers are left with little else to do but jawbone a relatively dovish stance after hiking rates a quarter-point in December — the first such move in more than nine years — then electing not to move at either the January or March Federal Open Market Committee meetings. Traders assign virtually no chance of a hike at the April 26-27 FOMC meeting, and in fact don't see a better than 50 percent of a move until December, according to CME data.
Confidence is waning that even the markedly dovish tone from Chair Janet Yellen and her fellow policymakers will help sustain the recent rally.
"Will the Fed/central bank put continue to drive risk assets higher? We are skeptical," Savita Subramanian, equity and quant strategist at Bank of America Merrill Lynch, and others said in a note. "We see diminishing returns to risky stocks from (quantitative easing) ... (and) the impact of Fed dovishness is similarly waning: the risk rally in late March on Yellen's dovish tone was one of the smallest we have seen since 2014."
Companies with strong balance sheets have outperformed low quality by 7 percentage points so far in 2016, Subramanian said.
"High-quality stocks are still cheap, underowned, fundamentally attractive, and a good hedge against volatility and market downturns, in our view," she said.
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