It could be a very volatile week ahead as the market deals with factors that could slow US economic growth in the short term.
Soybeans
A Number of Big-Picture Headwinds Continue to Threaten the Global Economy
Over the past month the markets have been presented with fears of a nuclear attack, a US or Japanese attack on North Korea, more Washington gridlock and one of the worst natural disasters in US history, and yet some equity measures are starting September at all-time highs!
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.
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.
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.
Mixed US Numbers Downplays Prospect of June US Rate Hike
While the markets always present a wide range of potentially impactful issues, the current list seems to be unusually broad.
Markets Continue to Deny Fundamentals, but the Global Economy is Growing!
Despite the Treasury market’s strange reaction to the much better than expected US nonfarm payroll result for April, the overall outlook for the US and global economy was improved markedly by that data released last week.
Disappointing Trend and Sensitive Commodity Markets
Consumer spending in the US grew at a 0.3% rate in the first quarter, the smallest increase since the fourth quarter of 2009.
US Economic Prospects Disappoint, International Economic Conditions Improve
The US data has been patently discouraging; the Trump administration continues to squander political capital; and the prospect for pro-growth policy initiatives continue to be pushed further and further into the future.
The Environment for Physical Commodities Could Be Negative in the Coming Weeks
While the inevitable happened in the March FOMC meeting, the reaction in the dollar was very surprising and was modestly supportive to a number of commodities.