Tag Archive: quantitative easing

Could the Fed Reserve Cut Mark the Top for Stocks?

The Federal Reserve cut the Fed Funds rate today by 25-basis points in a move that was widely expected. Markets had been increasing calls for a rate cut from the central bank, and President Trump has made it no secret he thinks the Fed is on the wrong track and wants lower rates. Over the last nine years, markets have become increasingly accustomed to the Fed or other central banks riding to the rescue at any sign of market volatility or significant risk aversion. Central... Continue Reading

Category |

Does the Fed’s About Face Mean QE4 Is in the Cards?

Could quantitative easing be in our future? QE4 could be just around the corner… The notion of a global slowdown has been widely covered by the financial media in recent months. Weakness in key areas such as manufacturing has been seen in both China and the U.S. The Eurozone is seeing its own struggles as well, with Italy already in recession and Germany perhaps on its way. The slowing global economy has led the U.S. Fed to do a major about-face in recent weeks. It... Continue Reading

Could Another Round of QE be in the Cards?

Markets have been wrestling with numerous issues in recent months. The ongoing war on trade, rising interest rates, Brexit, the continuing government shutdown and other geopolitical concerns to name a few. During that time, stock markets have come under pressure and recently flirted with bear market territory. A sharp rise in volatility didn’t help matters either, and investors have been left wondering if a market top has been reached. Much has been made of the mixed messages from the Fed. Not long ago, Fed chief... Continue Reading

Markets Don’t Agree with the Fed

The Fed’s decision to hike rates again on Wednesday was met with displeasure from equity investors. Stocks saw sharp declines even as the Fed lowered its forecast for next year from three rate hikes to two. That displeasure was on full display on Thursday, as stocks once again got absolutely rocked. The tech-heavy Nasdaq was down 3% at the lows, putting it down over 20% from its August peak. Although the index recovered a bit, it still ended the session down just under 20% from... Continue Reading

Bank of Japan Holding Course

At its latest policy meeting earlier this month, the Bank of Japan did what was widely expected and held monetary policy unchanged. Rates will remain at -0.1 percent, while the pace of bond purchases will also stay constant-at least for now. The Japanese central bank did, however, push back its time frame for inflation reaching its two percent target. The bank appears ready to stay on its current course, unless it becomes necessary to hit the gas again. The statement by the BoJ with its... Continue Reading

No End in Sight for QE

With or without a December interest rate hike from the Federal Reserve, global easing measures thus far show no signs of slowing. The European Central Bank, the Bank of Japan and the Bank of England could all potentially engage in further quantitative easing measures in an attempt to boost economic activity and spur inflation. Concerns appeared to be on the rise recently about the possibility of the ECB stepping back from its QE, although ECB President Mario Draghi put such concerns to bed this past... Continue Reading

A Bird in the Hand is Worth Two in the Bush

Stocks remain not far from recent all-time highs, and you have to wonder if equity investors will keep pushing stock prices further into bubble (we mean new all-time highs) territory. The desire for yield can be a powerful thing, and that thirst for returns has driven equities higher for several years now. In reality, however, it is zero or negative interest rates and a lot of quantitative easing that has driven equity markets to current levels. Investors have essentially been forced to go out and... Continue Reading

The Elephant in the Room

China’s currency reserves are not what they used to be. According to some estimates, the dollar’s share of China’s reserves has been slashed to a record low, as the world’s second largest economy looks to diversify away from the greenback. Not only that, but China has reportedly been selling U.S. securities. Thu far, this has not caused any type of panic and doesn’t even appear to be on the radar for most investors. You could certainly make the argument that a pullback in buying by... Continue Reading

If Not Now Then Later

As investors look to get back into the swing of things following the Labor Day Holiday and many last minute vacations, their focus remains the same as it has for several weeks, if not months. When will the Fed raise rates again? That is the question that many market participants are still asking. As we wrote previously, last week’s jobs data was essentially a dud, and recent manufacturing data was also not so great. The services sector also showed a surprising and significant slowdown, further... Continue Reading

Deutsche Bank Warns Gold Price Should Be Much Higher Based on Central Bank Balance Sheet

Gold could be worth far more than what speculators and traders have determined to be the current spot price. There’s a hidden indicator for the intrinsic price of gold that many investors have ignored. In addition to looking at the cost of mining gold, the level of government debt and total gold production, a major indicator that perceptive investors should pay attention to is central banks’ balance sheets. According to Deutsche Bank’s Michael Hsueh and Grant Sporre, there is a correlation between the rates at... Continue Reading