We’ve all got our own take on what’s happening these days. Each of us taking the information we receive – and interpreting it the best we can. Ideally we get “some” of it right, and in turn are able to put some money in the bank.
Here’s my take – bare bones.. take it for what it’s worth.
- The business cycle has topped or is still in the “process of topping” as equities continue to grind across the top. The actual “level” of the SP 500 ( I track /ES futures ) is STILL at the exact same level ( give or take a point ) as the peak back in May so…..if you’d been nimble enough to “sell at the top” in May….then “buy the dip” late June (and taken advantage of these last few weeks) – all power to you. You are a star.
- The suggestion of “slowing” in China coupled with the problems brewing in their credit markets ( now looking to be of much larger concern than I originally had thought) suggest WITHOUT QUESTION that China will experience a slow down moving forward.
- As seen through the complete “destruction” of the Australian dollar ( which usually serves as a good indication of global risk) there is no question that slowing in China will have considerable global reach.
- Gold and commodities in general have taken their beating and look to have bottomed.
- The Federal Reserve will continue on it’s quest to destroy the US Dollar (which correlates well with the idea that commodities and the “cost of things” should be on the rise).
- U.S equities will continue to grind across the top and lower, then lower and yet lower as we are now entering a period of “rising interest rates” which ultimately hurts corporate borrowing, and in turn corporate profits.
I’ve suggested for some time now that ” we are on the other side of the mountain”. These things always take longer than most anyone can imagine, but the bigger building blocks are most certainly sliding into place.
Can the U.S survive an environment where interest rates are rising, and global growth is falling?