Submitted by Lance Roberts via RealInvestmentAdvice.com,
In this past weekend’s newsletter, I discussed the end of the mutual fund redemption period. (Charts updated through yesterday’s close.)
“Friday’s sell-off, combined with options expirations, pushed the markets back to short-term oversold conditions and at previous support.”
The first Fed rate hike in seven years was supposed to trigger a powerful equity rally as the bulls expected money to pour out of bonds into stocks; especially into the cyclicals.
The logic behind this market call was simple and seductive. History shows that the economy and earnings keep on accelerating as the Fed initially shifts away from monetary policy accommodation and history was expected to repeat itself.
In the aftermath of the stunning liquidation and gating of first Third Avenue's junk bond mutual fund, and shortly thereafter several other fixed income hedge funds, investors have been following with great interest capital (out)flows from the fixed income space.
Submitted by Leonard Brecken via OilPrice.com,
It’s very clear that both the industrial and manufacturing sectors are in recession while consumer spending slows but remains positive despite lower commodity prices. This divergence can be blamed at least in part on the Federal Reserve’s policy of pursuing a stronger dollar.
Submitted by David Stockman via Contra Corner blog,
Yellen said at least one thing of importance last week, but not in a good way. She confessed to the frightening truth that the FOMC formulates its policies and actions based on forecasts of future economic developments.