Here
are the links to the weekly roundups, reviews and also previews of the
beginning week.
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LAST WEEK
S&P 500 Snapshot:
First record close of 2017 – dshort
NEXT WEEK
Rising
REITs back bets on stronger economy
Weighing the Week
Ahead
– Jeff
Miller
We
have a reasonable volume of economic data, but few important reports. We are
awaiting earnings season. The elephant in the room (sorry – I just couldn’t
help myself) is the transition to the Trump Administration. Many are tired of
hearing about this and thinking about the consequences, but that is not a sound
plan for the intelligent investor. The punditry is far from exhausting this
topic. They are making their own transition from Candidate Trump to President
Trump. In the coming week, the punditry will be asking: What can investors
really expect under Trump?
A weak euro for long * A critical year for
climate negotiations * Eurozone job market healthier
Donald
Trump’s press briefing on Wednesday might shed light on his political agenda.
In the absence of major data releases, Fed Chair Yellen and other speakers will
set the tone for markets. Sweden, Denmark and Norway will publish inflation
numbers.
Trump
speaks, UK prime minister speaks on Brexit
Global
recovery and reflation gain momentum with strong PMI numbers and euro inflation
prints this week * However, US yields have peaked for now, while the European
curve will steepen * Turbulence in Chinese FX market spilling over into major
FX markets * Equity market rally to take a breather for now, but we recommend
buying on the dips * Near-term risk factors to watch
out
for are stretched surprise index, further China turbulence and Trump
inauguration on 20 January.
US:
Earnings, Fed and the wrap on holiday shopping * Europe: Political risks shift
into higher gear * LatAm: Central banks will be the first to get back to work *
Asia: Overstated Chinese reflation * Canada: The week after will be what
matters
Business
confidence indices strengthened across a remarkably wide range of countries in
the latter part of 2016, indicating an upturn in global cyclical conditions.
The crop of economic indicators released early in the New Year followed the
recent trend with a remarkable further rise in confidence, already standing at
multi-year highs in many cases. This leads to two obvious questions. First,
where is this strength, which is more robust than was generally expected,
suddenly coming from? And second, what does this imply for the real economy?
Speculative
Positioning
– Marc
Chandler
Bulls
and Bears Took on More Currency Exposure
State
of Dollar's Correction
Macro
Comment – Marc Chandler
Macro Forces Underpin Dollar,
Equities and Yields
Volatile
EURUSD likely best traded via options * USDJPY appears set for further rebound
* Kiwi weakness makes Aussie, loonie trades attractive * NOK looks somewhat
undervalued, particularly versus EUR
US
equities are starting the year at new all-time highs. The rally is supported by
healthy breadth and a relatively solid economic foundation. The biggest
watchout is volatility, which has fallen to an extreme. A mean reversion in
volatility is odds-on and that is normally unfavorable, short term, for
equities.