The end of month closes across asset classes could be the most important since March 2009, when a clear reversal pattern prompted us to turn bullish towards equities. This time, a weak close would suggest an end to the rally of the past 10 months, with the potential for some significant medium-term downside for equities [Read more...]

With the economic cycle having hit bottom and turning, thanks in no small part to massive fiscal and monetary stimulus, attention is now turning to when that stimulus is likely to be withdrawn. For me, the likelihood is that tighter policy is going to be put off as long as possible by the authorities in [Read more...]

In light of recent economic data from the US, Tim Cooper - Global Economic Strategist at Business Monitor International - suggests that the US recession may now be over. However, he believes that there is little to cheer about at this stage, as the recovery process will be very prolonged and slow.

Several months into the rally, how much more room is there for global markets to climb? Terry Alexander, head of Country Risk at Business Monitor International, makes the case for a sustained rally given the technical picture. Careful about the fundamentals, though!

Appendix 1

[caption id="" align="alignnone" width="378" caption="Dow Jones Index & Fibonacci retracement"][/caption]

Appendix 2

[caption id="" align="alignnone" [Read more...]

This week’s announcement that Ben Bernanke’s Federal Reserve would up the ante in its purchase of debt securities has certainly made things interesting.

The Federal Reserve’s plan is to buy up to an additional US$750bn of agency mortgage-backed securities, bringing the total to US$1.25trn; increase agency debt purchases by up to US$100bn, to US$200bn; and grease [Read more...]

A thought. By now, the US Federal Reserve’s quantitative easing strategy is well underway, with the central bank pushing as much cash as possible into the hands of private commercial banks, hoping that they will then take the money and distribute it throughout the economy in the form of loans. Check out excess [Read more...]

Although market developments are moving quickly, I am going reiterate that the Watchdogs fundamental outlook for the second half of 2008 is playing out.

The core scenario envisaged the collapse of a major US financial institution in H208. If you count Fannie Mae and Freddie Mac in that category (or, for that matter, IndyMac, which on [Read more...]