Good afternoon
I have to admit, that yesterday´s renewed, heavy sell-off in N.Y. caught me a little by surprise! I still believe, though, that this recent 10% correction in the S&P should be doing the job. Obviously, some big boys repositioning themselves, and the sheer amount of money from investors like Bridgewater is killing it. I think, that these corrections are way faster these days than they used to be - computers never hesitate! But that also means, that the air should be clear much faster as well. In any case, and whatever computers will do - ultimately, fundamentals always prevail in the long run - and I guess we all agree, that they are looking good!
I agree with most commentators, though, that the way back to "normal" interest rates around the world will be a volatile one! Imagine the ECB, Japan and the FED would be doing it at the same time! But this is not to be expected.
Financial markets are not the reality - they have not been for quite a few years now, at least on a short term basis. And teh erality is, that the world is growing nicely, alongside company profits.
Goldmans stick to their bullish call on commodites.
Inflation in China is easing...
Europe is weaker, but much better than you would have expected following the late route in New York yesterday. It looks loke Australian instos have kept their nerves - the market was only down by 1%,which was a great effort, considered our market is the first one to open.
Small Caps have not been as negative this week, as one might have expected. my small-cap and resource-orientated Australia fund is down by about 6.5% since this volatility started last Thursday. Bad enough - but could have been much worse! There has been some pressure here and there - but largely, investors seem to look at fundamentals, and liquidity-driven selling has not been overwhelming.
You have a nice weekend! I guess we will all enjoy two trading-free days!
WS