Tag Archives | S&P 500

US stock markets hit record but real economy remains slow

“Don’t fight the Fed” is one of the oldest rules in stock market investment.  And it has proved valid again, as this month’s IeC Boom/Gloom Index shows: The Fed and other G7 central banks have poured $10tn of stimulus into financial markets since 2008 This cash has finally taken the S&P 500 (red line) into record territory Critical to this […]

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Prices rise whilst demand falls

The blog is extremely concerned about recent market developments. Nobody minds higher prices, if they are a response to strong demand and can be passed through to customers. But today’s high prices have nothing to do with strong demand. On the contrary, in fact. Most consumers are actually reducing output. Equally, the wider economic outlook […]

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Computers push oil prices higher, again

Trading volumes in financial markets are very low these days. Many ordinary investors are on holiday, and others are focused on the Olympics. So it is easy for the high-frequency computers to create major volatility – and large profits for their owners. Thus they managed to create a 1.5% fall in the S&P 500 on […]

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Financial markets hope for more policy ‘lunacy’

The last few days have seen financial markets rallying, whilst the news from the real economy gets worse. US GDP growth in Q2 was just 1.5%. And the Wall Street Journal notes the recovery since 2009 has been the weakest in the post-War period. But that doesn’t matter to the computerised trading systems that now […]

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‘Waiting for Bernanke’ is hottest show on Wall Street

‘Waiting for Godot’, the great play by Irish writer and Nobel Literature Prizewinner, Samuel Beckett, deals with the meaning of existence. Written just after the Second World War, its two characters wait endlessly for the arrival of Godot. US financial markets are currently staging their own version of the play: • They no longer see […]

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A is for Agility in today’s VUCA world

Pity the poor purchasing manager, who: • Must keep inventories low as end-user demand remains slow, and the CFO remains very worried about the working capital risk • Must keep inventories high, to minimise the risk of running short if supply problems develop and prices jump Benzene (green line), as always, is the great example […]

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Weak chemical markets suggest difficult times ahead

Over Christmas, the blog spent some time considering whether its IeC Downturn Alert had served its purpose. By luck, or possibly judgement, it had been launched at the exact market peak on 29 April. And hopefully it had helped to alert companies to the difficult times that lay ahead. But by December, most analysts and […]

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“A failure to stay ahead of events”

Petchem markets are doing an excellent job in their role as a leading indicator for the global economy. But as we warn in Boom, Gloom and the New Normal, policymakers remain in Denial about their message. The chart above spells it out clearly. Volume leads pricing. Since January, China’s demand growth has collapsed. So its […]

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What goes up, comes down

Don’t panic is the blog’s suggestion, after last week’s market collapse. Instead, the important thing is to plan for what might happen next. Scenario planning is absolutely critical to survival over coming months. The blog’s advice is to assemble your management team as quickly as possible, and ask everyone to come prepared to be honest […]

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Market volatility hits new peaks

Petchem markets provided a perfect case study of Volatility last week, confirming the blog’s view that we are heading into a VUCA world where Volatility, Uncertainty, Complexity and Ambiguity will dominate. This was also real volatility, where prices crashed downwards and surged upwards at the same time. And it involved 2 of the ‘building block’ […]

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