We have to predict a major agricultural and financial juncture just ahead.
China
Global Recovery On the Horizon
We think that a September US rate hike is off the table because of a lack of definitive forward progression in the US jobs sector. The unending Greek saga combined with a rising Dollar has created enough headwinds to keep the Fed on the sidelines until later in the year.
Persistent Improvement in Global Economic Sentiment
As we indicated last week, outside market forces appear to be reaching a zenith, and with the noted letdown in the dollar in June, the hope of sidestepping a financial debacle in Europe, and the promise of ongoing aggressive QE from the ECB, it would not be surprising to see a persistent improvement in global economic sentiment.
Macroeconomic Conditions Improving; Return to Growth
Macroeconomic conditions are improving, and the Fed Chairman feels confident enough to weigh in with her own “irrational exuberance” moment with respect to equity valuations.
Disappointing Performance in First Quarter of US Economy
The quickest and cleanest track to a major top in the Dollar was for US economic numbers to remain strong and for US economic strength to pull the Euro zone into self-propagating growth.
Global Economic Condition Remains Suspect
From the recent action in Treasuries, stocks and physical commodities, one could come to the conclusion that the global economic condition remains suspect.
Is the Outlook Toward the US Economy Too Lofty?
This week we have to wonder if the outlook toward the US economy is too lofty for the recent valuation in the Dollar.
Concerns About Slowing Remain in the Headlines
While we think the bear case for the global economy is already overstated, more long liquidation selling in crude oil is possible.
Global Negative Sentiment Exceeding Rationality
Global Negative Sentiment in many ways has probably already exceeded rationality. To the bears’ credit, unrelenting declines in crude oil, copper and equities justifies some fear of slackening demand.
Near Perfect Storm of Negative Sentiment
Sometimes the problem with a cure is that it takes too long to work. In the case of sagging crude oil market, it appears that it has become daily confirmation that the global economy is slowing down.