An opinion: U.S.headed for recession

[errolanderson]

Something doesn't smell right.

According to U.S. Labor stats, the American economy is headed for full employment of just 5 percent unemployed. But the U.S middle class is definately feeling a squeeze. And the U.S. Fed appears concerned that loose monetary policy has not had the desired impact of sustained economic growth.

Proof-in-pudding nears called the 1st quarter GDP. This data will state soon how the American economy is truly doing. IMO, US GDP may dip below 2 percent, well below the Fed objective.

What does this mean?

IMO, there is no chance of a Fed rate hike in 2015. The stock market rally may continue as the flow of global money appears unstoppable as the global currency war intensifies. The U.S. dollar strength is now cutting manufacturing and slowing exports . . . A direct hit on GDP.

Contrary to media mainstream talk, the U.S. dollar may begin to drop, crude oil would be supported, precious metals like gold may begin to recover as well the Canadian dollar.

Please treat this as an opinion. But the Fed policies and their impact are clearly not going according to plan which could trigger some significant market shifts in the months ahead.

[SASKFARMER3]

I agree with your points. Some thing doesn't add up. No their wont be a rate increase in June.

[mcdon]

I agree as well, but can the dow continue to rally given the strength of the US dollar and the subsequent fallout i.e. less competitive globally ?

[errolanderson]

mcdon . . . global equities are at record highs because of free money.

China equities are now at a record, despite Asia entering a recession. European indexes are soaring despite full-blown deflation.

Now, there is a full-blown global currency war (that no central banker will talk about) or a race to the bottom for currencies, with the exception of the U.S. dollar. But tomorrow's (Good Friday) release of U.S. unemployment could have an impact on these markets are early as Easter Monday.

It's the flow of money that is moving markets, not brass-tack fundamentals.

[Rareearth]

I have no bets.

Usd dollar chart coiled and broke decisively higher. More room to go higher, or stronger yet.

Usa govt will QE more.

Oil falls further, $25 ish

Other global currencies will suffer.

It is a war. Usa is one of the most self sufficient countries, what ever they need they buy at bargain prices. This isn't good for Ag. The usa dollar standard, is slipping many agreement now commonplace where they trade in there own currencies and don't use the Usa dollar as exchange standard.

[mcdon]

Yesterday strength in grains was attributed to fund re-allocation, may be seeing a shift back into commodities ? You are right about money flow, often analysts try to out-think the market instead of just following the money.

[errolanderson]

Rareearth . . . you may be right, as markets are markets.

But the U.S. economy is now suffering from a drop in manufacturing and exports. It is impacting their business across Europe. And it will impact their bottomline . . . the GDP (IMO).

The U.S. truly has to be an economic island in the world for this global slowdown not to impact their economy.

[cottonpicken]

The Atlanta fed recently pegged GDP at o percent. I kind of think things are a little better because of all the phong money low oil strong dollar,the us has a strong internal type economy with eleven percent of GDP tied to exports dont get me wrong it's still screwed but in order to expand qe another time they are going to need some excuses tommorrow pay rolls will be important.

[rkaiser]

But But But.... China fudges their numbers.... LMAO. USA numbers are so full of shit it is coming out of the feds eyes. What does GW say - you can fool ---- awe forget it....LOL

[errolanderson]

released this morning (Good Friday) . . . .

U.S. payrolls rose 126,000 jobs in March. The average trade guess was 223,000 jobs, a huge miss.

U.S. unemployment remain stable at 5.5%, but workforce participation rate dropped to only 62.7%.

Treasuries are surging, while stock market futures are under heavy pressure.

This will place a stake-in-the-heart of any U.S. rate hike talk. But more money printing (QE4) might be on the way that just worsens the global currency war.

[cottonpicken]

Need to find a etf with a vix on currencies.

Some entities are going start/or did getting smoked on their carry trades.

Wild times.

[errolanderson]

The incredible run-up in the U.S dollar has hurt the American economy immensely. Cheap pump prices do not replace lost jobs.

A potential pullback in the U.S. dollar may have a huge domino impact across all markets straight ahead.

[cottonpicken]

What floors me is thinking if this was just one country the outcomes would be be written in stone of what happens next,now its happening across the developed world and then some and everyone is guessing what happens next friction bizarre.

[Oilking]

Errol, when u say a huge impact across all commodities, are u expecting the grain markets to go down here next week or in the short term ? If U.S dollar goes down would it not support grain prices ?

[errolanderson]

Oilking . . . Yes, a pullback in the U.S. dollar would be supportive to grain prices (IMO) in particular wheat. Wheat has been hard hit by the steady climb in the American greenback.

The U.S. Fed is talking up the story of hiking rates, but economic data won't back up this hype. With the U.S. economy showing cracks, even the Euro may bounce. The spot loonie could easily push north of 80 cents on American weakness.

But this might impact CDN cattle prices in a negative way, especially after Mother's Day wholesale beef buying is covered.

Global markets are really out-of-alignment. Economics not ruling rather it's been the flow of money from central banker interference that's really buggering markets up. This interference is going to trigger potentially nasty volatility ahead.

Cash wheat up, cash cattle down by summer, spot loonie oversold, Alberta bitumen oversold,
cash canola bids firm until late crop year, feed barley strong into new crop, Calgary real estate just in the early stage of weakness, solid demand for edible peas this fall, lower Bank of Canada rates this summer/fall and no hope in hell of any U.S. Fed rate hike anytime soon.