Rally might continue, by Blackfort CIO Dr. Andreas Bickel

 

Rally might continue, by Blackfort CIO Dr. Andreas Bickel

Financial repression is here to stay. Technicians have upgraded most equity markets to buy. However, the S&P 500 is now trading at the 200- day average but not above. The most hated rally is still up and running. The FED is on hold although the recent PMI data and the job report have caught them on the wrong leg. The ECB, however, is confronted with lower PMI data and economic problems in the three major economies. It is possible that the ECB will instead of cutting rates impose a new target longer-term refinancing operations (TLTRO) program to further stimulate the economy. In the UK the BOE might be forced to print money after the Brexit. Fiscal stimulus might be used to dampen the negative effect from the Brexit. China is as well continue to stimulate the economy. These are all indications that the financial repression is as well going to continue. Interest rates will stay low for longer and in Europe negavite nominal yields will expropriate the prudent saver. These are signs of that the rally might continue supported by monetary and fiscal stimulus.

 

 

Source: https://www.linkedin.com/feed/update/urn:li:activity:6498947379868377089

Published: 06.02.2019 by Blackfort CIO Dr. Andreas Bickel

 

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