Something very strange is happening in US stock markets, as the above chart highlights: It shows weekly (blue line) and average quarterly (red line) volatility in the US S&P 500 Index since 1928 Both are very close to 43-year lows, going back to September 1973, at 1.7% and 1.6% respectively This seems quite […]
Chemicals and the Economy
Markets worry real world issues may trump monetary stimulus
Something has clearly changed in global financial markets in recent weeks. Not only have they been falling, but real world issues have begun to provide a negative impact. This sounds a strange statement. But it simply means that in the past, markets have seen “bad news” as being good news. They expected that it would […]
US stock markets weaken as bond yields signal deflation is near
Increasing volatility in major Western financial markets suggests they are struggling to maintain their momentum. It is certainly hard to be very optimistic about the outlook for the major Western stock markets this year. The reason is that investors are still failing to think about political risk. They continue to believe, as they did a year ago, […]
Boom/Gloom Index tumbles as S&P 500 hits record
The stock market used to be a good leading indicator for the economy. But that was before the central banks decided to manipulate it for their own purposes. As then US Federal Reserve Chairman boasted 3 years ago on launching their second round of money-printing: “Policies have contributed to a stronger stock market just as […]
Boom/Gloom Index shows sentiment remains positive
US and UK policymakers have been more upbeat recently in claiming that “the economy was turning a corner”. Although they have not yet gone as far as in September 2009, when the G20 issued a statement that began “It worked!”, and claimed the recession was now over. Helpfully, the IeC Boom/Gloom Index has again done its job in capturing this improved sentiment. […]
Financial markets at top of their trading range, again
Financial markets cannot make up their minds about the outlook. As this month’s IeC Boom/Gloom Index shows, sentiment (blue column) remains exactly at the dividing line between optimism and pessimism. This parallels the behaviour of the S&P 500 Index (red line). It had recovered strongly from March 2009, but has since found it very difficult […]
Austerity levels jump
The blog’s Boom/Gloom Index (blue column) reaches its 3rd anniversary this month. It was introduced to help monitor sentiment in financial markets, on the basis that “many markets are clearly being ruled by sentiment”. It has since done a good job in identifying peaks and troughs: • Peaks have been focused on periods when central […]
Boom/Gloom Index stalls as austerity worries rise
EU policymakers like to pretend that the Eurozone debt crisis was resolved by the adoption of last March’s new Treaty. An even more disturbing thought is that they might even believe their own propaganda. Who knows? But on the ground, it is crystal clear that the problems continue to multiply. Latest data from the Bank […]
Boom/Gloom Index and S&P 500 disconnect
The blog, like many readers, has become rather fond of the IeC Boom/Gloom Index since it was launched in June 2009. The aim to was to track market sentiment, and it continues to perform this task. It also throws up intriguing parallels, and sometimes disconnects, with financial markets. As the chart shows, this month is […]
Selling the Rallies
There was a sustained rise in the number of wealthy Western BabyBoomers entering their peak consumption years between 1980-2000. In turn, stock market multiples rose (the US Dow Jones price/earnings ratio rose from 8 to 32), as investors valued earnings more highly. ‘Buying the Dips’ in the market became the easy way to make money. […]
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