Authored by Lance Roberts via RealInvestmentAdvice.com,
While I remain long and invested in the markets on behalf of my clients, I focus and write about the significant risks that are currently present. I am fully aware a laissez-faire attitude towards these risks is ultimately likely to destroy large portions of my clients hard-earned, and irreplaceable, investment capital.
Having correctly predicted the dovish relent by the ECB's QE taper announcement last week, whose explicit "open-endedness" appeared to surprise many of his hawkish Wall Street colleagues, overnight Bloomberg macro commentators Mark Cudmore looked at bond yields and concluded that "bond bears have had their fun", as "almost all upcoming risk events are skewed to drive 10-year Treasury yields lower rather than higher."
Warren Buffet famously proposed the analogy of a machine that produces one dollar per year in perpetuity. He asks how much would you pay for this machine? Clearly it is worth something more than $1.00. And it’s equally clear that it’s not worth $1,000. The value is somewhere in between. But where?
With a full slate of central bank meetings, data (including payrolls Friday) and earnings next week there’s a little bit for everyone. On Thursday, according to Politico, we will also know who the next Fed Chair is as well as get a first look at a version of the House tax bill in the US, perhaps on Wednesday.
U.S. futures slid 0.2% as investors await a barrage of announcements including Wednesday's Fed decision, Friday's jobs report and, most importantly Trump's imminent announcement of who the next Fed chairman will be, although after the latest trial balloons, Jay Powell is now largely priced in. Asian equities edged modestly higher despite a tumble in Chinese stocks and bonds with Japan's Nikkei closing 3 points in the green, while European shares hold steady after concerns eased about the Catalan crisis with no notable developments over the weekend, pushing Spanish stocks and bonds higher.