Christmas ahead of Thanksgiving this year
By Peter Rosenstreich
A stock-market Christmas rally has already begun, although some would say it never stopped. The MSCI index of global shares hit its highest level since March, while the VIX index of volatility has declined to near historic lows. Why the party? Growing expectations for holiday spending with the post-Thanksgiving shop fest of ‘Black Friday’ plus US Federal Reserve Chair Janet Yellen’s dovish comment yesterday that hiking interest rates too quickly could stall consumer inflation in reaching its 2% target. The market has fully-priced in a December interest-rate hike.
Today trading volumes have already decelerated as the country prepares for an extended weekend holiday. This, despite upcoming announcements of: durable goods orders, the University of Michigan’s consumer sentiment index, jobless claims and minutes of the Fed’s Open Market Committee.
Gold to top $1,300
By Yann Quelenn
As the US Federal Reserve continues to try to kill debt with inflation, gold keeps heading up. US$ 1,300 per ounce is an easy target. Geopolitical uncertainties are strong, and inflation is back. The New York Federal Reserve’s Underlying Inflation Gauge shows consumer prices data growing slightly below 3%. Meanwhile, central banks in China and Russia are loading up on gold.
The dollar may further weaken, because the Fed cannot raise rates much. This would trigger a bust in bonds – not on the Fed’s agenda.