The broad markets offer traders and investors the ability to make and lose money – have no doubts about that. Opportunities abound when choosing the right trends, having a fundamental and psychological read on pricing/values, and a bit of luck doesn’t hurt either. Books and seas of information exist to help gather insight. Money management is crucial, and lastly – though not all inclusive as list go – timeframes regarding short-term, mid-term, and long-term outlooks are vital. If you should have some misfortune in only one of the above and find yourself wrong, it is important to admit it and get out of the trade and start again. You have to know when to have the stamina to continue and have to know when to quit.
The EUR did lose ground to the USD yesterday but has taken on a consolidated position as of this morning. The Single Currency continues to have poor economic data from the E.U. hurled at it, but the ability of the ECB to confront doubters and provide stability to the Spanish and Italian bond yields for the time being have worked. For how long, well that is the important question. Arrogance can often lead to folly, Spain and Italy hope not to find this out.
Gold as of this morning has bounced up slightly and is around 1773.00 USD. The precious metal may find itself going into the weekend having withstood some downside pressure, but like the EUR it will find itself with new challenges next week. Crude Oil has added a couple of dollars in value per barrel via WTI (West Texas Intermediate) since yesterday’s lows also.
Today will be relatively light with data. The U.K. will bring forth Public Sector Net Borrowing numbers soon and then essentially only Canada will publish figures of note with CPI percentages. Yesterday’s PMI data from Europe came in below the French expectations, but slightly beat the German forecasts. Only the German Flash Services PMI result of 50.6 was above an acceptable recessionary red-line however. The overall E.U. PMI statistics proved completely lackluster and definitely recession like. From the U.S. weekly Employment Claims missed their mark and this continues an emerging pattern of growing woes regarding job numbers from the States. The Philly Fed Manufacturing Index reading produced a better number, but like the overall picture presented here was in fact a less than satisfying meal for investors trying to find glimmers of hope regarding growth.
The core issue is that the broad markets are like a large pendulum. One motion finds investors being fed a constant barrage of quantified numbers which point to a growing recession in Europe, the U.S. on the precipice of entering another decline, and Asia – including China – starting to come under massive pressure as their export markets find it difficult to produce consumer demand. The swing back to the equilibrium comes from the speeches of officials led by politicians and their central bankers who plead for more time and greater tools to function with as they try their best to keep everyone calm and claim that the sun will in fact come out tomorrow. And thus we find yet another classic example of why there is such a divergent outlook regarding short-term and long-term perspectives.
While most traders continue to seek profit many investors are keen on first establishing preservation of assets. The current global economic road being traveled is a tough one and many governments are keen on keeping up a good face when in reality the back rooms of their hidden offices and printing machines must have many of their ‘bean counters’ ill with disgust.