Bill Brinson and Oliver Juergens discuss the next week in the market. Frannie and Freddie news is affecting the market. Oliver dissects the recent rally and implications for the future. What seasonal factors are in force? Where do interest rates go short term? How long will the Fed keep real rates at zero? Lumber and home construction linkage are discussed. Other commodities have a deflationary spin as well. Is cash OK in a deflationary volatile environment? Is this the beginning of the long term interest rate increases? Does questionable assets at banks cause an increase in rates? How stressful was the European stress tests? They did not assume a sovereign debt default of bonds they hold! What about the problems with Japanese debt?
What tools does the Fed have to fight deflation? Oliver and Bill discuss a unique tool which the Fed may use. Does the fall have negative seasonal factors in general? Another toxic asset purchase program? Cap yield on bonds? European central banks have additional tools? Japan and Europe have same demographic trends. Oliver discusses opportunities in Turkey and India. All still linked to US economy in the short term. Bill examines the unemployment reports. Oliver discusses Euro dollar price action. Possible double top on DAX. Correlation between global stock markets is very high. Earnings from consumer stocks will have to come in to support the rally. Retailers not expecting big Christmas revenues. Early indicator is back to school sales. Decline in gold anticipating deflation?
