SubscribeReader Request: Correlation of the Euro and S&P 500
November 25, 2011
We recently wrote about the high correlation of the intra-day moves between the Euro and the S&P 500 index. A reader commented that they would like to know more about the longer term correlation of the Read more
A Quick Look at EuroZone CDS and Bond Yields
November 24, 2011
With the lack of interest for the recent German bond auction, CDS spreads continue to widen and the cost is on the rise for most of the countries within the region.
Yields are also rising for most, with Portugal, Spain and Italy getting closer Read more
This Euro/SPX Correlation is Getting Ridiculous (Today’s Chart)
November 23, 2011
So far today, the movement for the Euro and the S&P 500 has been moving in lockstep. The chart below shows the 3-minute movement for each of these and how closely they are connected.
There are many reasons to believe that the de-risking along with de-leveraging has a good deal to do with it as well as the unwind of the Euro-based carry trade.
Whatever the reason, it is something to watch.
China Flash PMI – There Is Trouble My Friends…
November 23, 2011
China’s Flash PMI number was released and it was not a good one. Readings under 50 are considered to be in the contraction zone and the 48 was clearly a level for concern. Much of the recent tightening to tame the inflation monster is to blame, but the slowdown in European demand (one of China’s biggest trading partners) has to be having a serious affect as well.
Of course reports on this has to come with the obligatory note that this reading provides for more ammunition for additional stimulus. Yet, there has been no indication from China’s leaders that additional stimulus is Read more
GDP Is Disappointing – We Are Told It Bodes Well for Next Quarter (HUH?)
November 23, 2011
The silver lining appears once again. This time there is a commentary floating around that the 20% downward revision for GDP (2.5% to 2.0%) was primarily due to weak inventories. Okay, that appears to be true. So far, so good. But, the follow up to that is hope that for next quarter, as sales pick up – inventories will need to be replenished and the cycle will push up next quarter’s GDP number.
Furthermore, there has been talk from our ever-hopeful CNBC crew that the inventory-to-sales ratio has been tight and they state that this is more proof that there will be the need to replenish inventories after shoppers are out in full force Read more
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