Looking at the action in stocks last week, we might develop some concern for the pace of the US recovery, especially in the wake of a soft December Non-Farm Payroll result, sub-par sales guidance from a couple of bellwether US companies and from fears that the Fed might continue to taper even in the face of uneven US data.
Over the last two weeks, the outlook for the global economy has fostered some widespread confusion. The December US Non-Farm Payroll gain was clearly disappointing, but that news was countervailed by increased attention on the decline in the US unemployment rate.
The improvement in the global economy continues, but the recovery pace obviously isn’t providing much in the way of support for the commodity markets.
In the first week of 2014, the biggest surprises have been a strong upward reaction in precious metals prices, a series of declines in equities and a massive, concentrated slide in crude oil prices.