As important week arrives loads of important economic data
including payrolls and three major central meeting FED,BoJ and ECB where
expectations are high from ECB to cut interest rate as insane increase jobless
in European Union. Although it's seemingly clear that stocks market
doesn't care about economic data
as good news is good news and bad news is also
good news .The S&P 500 gained a notable 1.7% last week, and it sits just points from its all-time high.
This comes as U.S. economic data
continues to signal a spring slowdown. Q1 GDP grew
at a slower pace than expected, durable goods
orders disappointed in April, and the housing market is showing signs of slowing.
Meanwhile, the current earnings
season continues to be less than stellar.
Experts have offered two
interesting theories for the persistent stock market rally, which we will get
to a little later.
So, with the recent economic data
disappointing and earnings announcements lagging, what's driving the markets?
Analysts have advanced at least two
interesting theories.
1) Cash Return: "[D]uring the
current earnings season, US corporations continue to announce dividend
increases and more share buybacks," said stock market
guru Ed Yardeni as he rationalized the rally. "Previously,
I’ve shown that this corporate cash flow into the stock market--which totaled
$2.1 trillion for the S&P 500 since stock prices bottomed during Q1-2009
through Q4-2012--has been driving the bull market since it began."
2) The End Of Austerity "Some
traders ... think that the new rally really kicked in when news that a graduate
student had found flaws in the Reinhart/Rogoff paper on the limiting power of
public debt on the economy – thus casting doubt on that thesis," said UBS's Art Cashin.
Cashin is talking about UMass grad student Thomas Herndon, who has basically
turned the global austerity
movement into a joke.
Following are trade calls for today,
- Sell Gbp/Usd at 1.5535 stop above 1.5590 target 1.5415
- Buy Usd/Jpy at 97.50 stop below 96.70 target 98.40
- Buy Jun Crude Oil at 91.85 stop below 91.00 target 93.35
For more info visit : www.cfb.ae
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