Weakening Earnings, Slowing Manufacturing, No Trade Deal = Record Equities

[errolanderson]

Go figure . . . .

[ajl]

Most have figured out by now a trade deal with China is irrelevant to the US, in fact they are better off without it. Chinese products will be shipped to the US, and the US can use the tariff revenue to service their rather huge debt as opposed to higher domestic taxation. That is one of the reason the US has been able to get away with big spending this year. The other factor at play is central bank money printing by the ECB, Bank of Japan, etc., etc.. and that is flowing into the US market as well since where else in the world is their an investment grade opportunity? I can't believe central bankers in the ROW (rest of world) are so stupid that they need to stimulate the US economy but that is what they are doing. We do get some knock off benefit of that here north of the border as well.

[agstar77]

So have studied any History as to how the great depression started or have just been reading the Art Of The Deal by I. Am . An. Idiot.

[errolanderson]

Politicians are pushing for lower rates to continue to drive the-flock toward equities that provides the ongoing artificial lift to already high corporate valuations. But a serious side issue that may come to haunt us all is; the-flock is piling into riskier and riskier investments.

And lower rates are also driving the current deflationary wave in markets (IMO). Cheap money promotes a higher debt load. And more debt is a direct enemy to inflation. You need less debt to kickstart inflation and allow rates to rise.

This current financial situation is simply unsustainable (IMO). The system could implode and then the finger pointing begins in-earnest . . . .

[helmsdale]

Politicians are pushing for lower rates to continue to drive the-flock toward equities that provides the ongoing artificial lift to already high corporate valuations. But a serious side issue that may come to haunt us all is; the-flock is piling into riskier and riskier investments.

And lower rates are also driving the current deflationary wave in markets (IMO). Cheap money promotes a higher debt load. And more debt is a direct enemy to inflation. You need less debt to kickstart inflation and allow rates to rise.

This current financial situation is simply unsustainable (IMO). The system could implode and then the finger pointing begins in-earnest . . . .

PIGS debt is all yielding less than 1.5%.

Dow P/E of 19:1

S&P 500 P/E of 20.5:1

Nasdaq of 31.5:1

...

Nothing to see here 🤷

[errolanderson]

U.S. consumer confidence took a surprise drop in December. USD under heavy pressure spurring the loonie to new heights. March loonie now threatening to break above 77 cents U.S.

Trump shot out opening bell tweet of Jan 15 planned Phase One deal signing at White House. We'll know soon if this is an 'actual deal' or a 'trade war truce with more delays' . . . .

[bucket]

U.S. consumer confidence took a surprise drop in December. USD under heavy pressure spurring the loonie to new heights. March loonie now threatening to break above 77 cents U.S.

Trump shot out opening bell tweet of Jan 15 planned Phase One deal signing at White House. We'll know soon if this is an 'actual deal' or a 'trade war truce with more delays' . . . .

If a trade deal is signed the US farmer should be better off.....Canadian farmers will still have the stinking albatross hanging around their neck in the form of a Hauwei executive enjoying her West Coast home....to this day I can't even fathom how Trudeau and team could be so naive....or the relation of a computer executive to grain in western Canada...

[agstar77]

It is also strange that the fall of the Loonie was predicted, yet it is rallying.

[errolanderson]

It is also strange that the fall of the Loonie was predicted, yet it is rallying.

Currencies are very difficult-to-predict at the best of times, but they are flow-of-money markets. Drop in USD tends to support alternate currencies including loonie. A rally in the USD pressures alternate currencies. Gold will tend to draft higher on USD weakness.

Bank of Canada may have to cut rates in 1st quarter which could again trigger pressure on the Cdn.
Loonie broke above 77 cents this morning (which appears overdone) but it is, what it is . . . .

[SASKFARMER]

I live down here a good amount of time and if this is what a disaster looks like bring it on. People are happy really happy for the most part. Spending is happening and people are traveling etc. Dem states are losing people wonder why?

Now when you sit in canada any place people are down and seem upset and worried. I guess that’s what Trudeau prosperity looks like.

Skippy is mia and yet no media is covering this.

Gov Jets fly back and forth from Costa Rica. Media silent.

Nervous break down or drug treatment of divorce. Or is there a bigger scandal to drop and the liberals are planning.

Skippy love the lime light so something is up it’s been two weeks.

But let’s worry about the USA that will get a deal with China and we’ll canada were getting what?

[ajl]

I would not read too much into holiday shortened trading session. USDX is still in the range that it has been for a long time although a little weaker. After being on a tear for the past 4 years it does stand to reason that the US economy will slow in 20. China will sign the trade agreement this weekend, as they stand to gain a lot. Making further progress will unfortunately prove difficult because the Chinese have to learn to live up to their end of the bargain. The other issue is where will China get all that $USD needed to fund their commitments. They have gargantuan debt to service and now have commodity purchase commitments although much of that will be favoring US sources at the expense of others. Watch 10 year bond rates in 20 as the Chinese will have to liquidate some more treasuries to fund their $USD commitments so maybe we will see slightly higher interest rates this year.

[errolanderson]

U.S. manufacturing ISM index for December just released showing the 5th straight month of declines and the slowest U.S. manufacturing reading since June 2009. U.S. companies are now clearly in-contraction mode. U.S. Dec job creation reported today posted at 145,000 jobs vs est @ 160,000 jobs.

Meantime, back at the ranch . . . Fed money printing (QE4) propelling U.S. stock markets to historic record-breaking highs on a daily basis into 2020 . . . no stopping this bull as full-blown central bank manipulation in-play. The Dow Jones now threatening to break above an amazing 29,000 points . . . . Analyst talk of a 32,000 point Dow.

go figure . . . .

[bucket]

U.S. manufacturing ISM index for December just released showing the 5th straight month of declines and the slowest U.S. manufacturing reading since June 2009. U.S. companies are now clearly in-contraction mode. U.S. Dec job creation reported today posted at 145,000 jobs vs est @ 160,000 jobs.

Meantime, back at the ranch . . . Fed money printing (QE4) propelling U.S. stock markets to historic record-breaking highs on a daily basis into 2020 . . . no stopping this bull as full-blown central bank manipulation in-play. The Dow Jones now threatening to break above an amazing 29,000 points . . . . Analyst talk of a 32,000 point Dow.

go figure . . . .

Is this the 1929 run-up all over again?????

That history always refers to?

[sk_wheatking]

It is also strange that the fall of the Loonie was predicted, yet it is rallying.

I know, I cant figure that one out either. We should be at 65 cent dollar in all reality but our dollar gets stronger every week!

[macdon02]

I know, I cant figure that one out either. We should be at 65 cent dollar in all reality but our dollar gets stronger every week!

We are riding on coat tails. The run up in crude and the fact our rates haven't gone negative, yet.