Authored by Chris Hamilton via Econimica blog,
(The following was written as an outline for a potential book. To this point no publisher has shown interest and time and funds have run out.)
One day after the much anticipated Fed announcement in which Yellen unveiled the "Great Unwinding" of a decade of aggressive stimulus, it has been a mostly quiet session as the Fed's intentions had been widely telegraphed (besides the December rate hike which now appears assured), despite a spate of other central bank announcements, most notably out of Japan and Norway, both of which kept policy unchanged as expected.
Last week's bullish sentiment that sent the S&P not only to a new all time highs, but a burst of last-second buying pushed above 2,500 for the first time ever, has carried through to the new week, with European and Asian shares rallying across the board, US futures again the green, and world stocks hitting a new record high on Monday ahead of a historic Fed meeting in which the FOMC is expected to announce the start of the shrinkage of its balance sheet.
Authored by Ralf Zimmermann, Head of Equity Strategy at Bankhaus Lampe KG,
Let’s forget for ten minutes the upcoming Q3 reports (supportive for stocks), US policy risks (probably the biggest medium-term risk for stock markets), hurricane-related diversions and North Korean rumblings - and turn to a pretty fundamental issue, most likely the biggest one in contemporary capital markets: Central bank interventions in and manipulation of capital markets.
While ECB President Mario Draghi faces his own German-bond-market constraints in his hubristic bond-buying-bonanza, cornering him to taper sooner than later; the Bank of Japan appears to have thrown every textbook out of the window and cranked their plunge-protection to '11', as Bloomberg reports, The Bank of Japan now holds 75% of the nation's ETFs.