Some mildly decent news from the Retail industry's earnings
reports so far this week may finally staunch the bleeding after a
downward drift in the markets over the past week.
) beat this morning on both top and bottom lines and
) double-digit jump in net growth may signify relative strength
at the back-end of an overall lackluster -- and that's being kind
-- Q2 earnings season.
It's becoming more and more clear that the market is
anticipating an end to the Fed's QE Tapering program, and the
lofty trading of most of this summer looks to be winding down in
the face of reality asserting itself. Think of it as the market's
version of cleaning all the spent plastic beer cups from the
summer home and taking the pontoon boat out of the lake -- fun as
it's been, responsibility ultimately prevails (or it should if
you know what's good for you).
Also, due to the utter lack of dominant narratives owing
largely to the dog days of summer, what's being intensified right
now is the spotlight on potential Fed policy shifts in regard to
QE. My esteemed colleague Nick Kalivas published a comprehensive
and informative piece called
Sizing Up Jackson Hole
yesterday, advising investors not to be shocked by a dialing down
of asset-buyback policy from the Fed at its annual conference in
the Grand Tetons.
Among Nick's findings is that while QE does indeed look to
have assisted the economy's recovery since its implementation
nearly a year ago, the net positives may well look to not warrant
continuation in its present form. As a result, we're this morning
seeing lots more attention being paid to what will happen with
the ten-year T-bill rate and various pressures in emerging
That said, we're literally grasping for meaningful narratives
these days. Whichever policy the Fed eventually adheres to -- and
there's no guarantee we'll see any change upon this week's
conference -- it's nearly certain the shifts will be relatively
subtle and digestible for not only the U.S. markets but markets
and currencies worldwide. After all, it's called "Jackson Hole,"
not "Jackson Hol-y Crap!"
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