By D. Scott Peterson
Each weekend I use Saturday a.m. to research and study what the markets are up to. It’s very easy to get lost in market noise with the national media manufacturing drama with every twist and turn of the news. Doesn’t it feel like the whole world is one big soap opera? Fear and controversy sells, and holds the attention of viewers.
- It’s all about the dollar $ right now; the market will be up/down depending on how it’s trading, especially versus the beleaguered Euro. Shockingly, this week the Euro nearly reached parity with the dollar, although it was lower in the late 90’s. As the Euro Central Bank continues quantitative easing, it will likely go lower.
- And then there’s oil. The industry is a huge part of US and world GDP. Weak oil is good for prices at the pump but it puts pressure on driller’s and producer’s profit margins. And jittery financial markets are worried oil is forecasting even more of a global slowdown. In reality, it’s because the world is awash in oil. Traders are pushing oil lower, anticipating a nuclear deal with Iran, which will add even more crude to the market place.
- The word “patience” is coming out of Fed statement signaling interest rate hikes ahead, possibly in the June or September time frame. The market and pundits have been predicting rising rates for 36 months now but it still hasn’t happened. Regardless of speculation, rates may stay low through the end of the year or longer.
- “As the market advances accounting gets looser.” – Warren Buffet
- “Best days in America lie ahead.” – Warren Buffet
- “Keep a lot of dry powder.” – Warren Buffet
- The next market catalyst is Q1 earnings, beginning 1st week April.
- The ECB has already purchased 9.8 billion Euros’ of bonds. And, South Korea cut interest rates. The U.S. did this years ago, which is why our economy is growing and theirs isn’t.
- Speculators are buying stocks/bonds of energy producers and the sovereign bonds of some Euro area countries.
- Gold is a dead asset right now.
*Sources- Bloomberg.com, Briefing.com, Stockmarketmentor.com