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Fresh Threats to the Markets, High Risk Sentiment
The North Korean situation flared up again with fresh threats from their leader, and while the markets have taken these types of threats in stride before, there will be some anxiety that affects risk sentiment.
Markets Exhausted, Significant Lows in Grains
Global markets have not regained a “risk on” tone, but they are showing signs of looking beyond the turbulent events of the past few weeks.
Volatile Week Ahead, Growth in the Long Run
It could be a very volatile week ahead as the market deals with factors that could slow US economic growth in the short term.
US Dollar Under Pressure As Prospect for Rate Hike Drifts
The Fed symposium in Jackson Hole failed to offer any distinct direction on the state of the US economy, but recent Fed commentary suggested that a government shutdown off the budget ceiling battle and the possible effects from Hurricane Harvey could impact policy decisions next month.
Negative Sentiment Reached Significant Level
The number of negative geopolitical issues has expanded consistently over the last two weeks, and this has undermined the long bull market in equities.
Global Growth Outlook Positive; Commodity Bottom!
Commodity markets appear to have put in a significant low on June 22nd, right into the crude oil low and also in line with the first day of summer.
Disappointing US Activity, Slide in Commodities
In retrospect, the recent sharp declines in equity prices and significant pressure on industrial commodities were justified by disappointing US scheduled data and the Fed’s move to notch interest rates upward.
US Economic Data Continue to Soften
The good news is that a series of potentially serious geopolitical issues were traversed recently without sustained damage to the global economy or investor sentiment.
Potential For a June Rate Hike Rekindles
Despite the very disappointing US nonfarm payroll report for the month of May, the US and global economies continue to recover, albeit at a slow pace.