Transcript Sept 2014- Economic and Market Review

Economics/Market Review
September 2014
Daryl Montgomery
September 10, 2014
Copyright 2014, All Rights Reserved
The contents of this presentation are not intended as a recommendation to buy or sell any security
and are for educational purposed only.
Current Monetary Policy Summed Up
Stock Market Rally Explained
US Roundup
• GDP Q1 minus 2.1%, Q2 +4.2%
• Aug Jobs +142,000, Unemployment Rate 6.1%
• Not in Labor Force = 92.3 million (record),
Participation Rate = 62.8%, a 36-yr low
• Fed QE at $25 billion per month in Aug, $15
billion in Sept, $5 billion in Oct, $0 in Nov.
• Fed Funds at ZERO since Dec 2008 (provides a
lot of stimulus to stock prices).
US Long Term GDP Trend (Official)
Inflation – Official vs Actual (blue)
Real Wage Growth in US
US Jobs Report Last 10 Years
Mortgage Debt to Salaries
S&P, Corporate Profits and Jobs
Fed Balance Sheet with all QEs
Fiscal State of U.S.
• National Debt: $17.7 trillion
State & Local Debt: $3.1 trillion
GDP: $16.8 trillion
Debt/GDP Ratio: 106% (124% Fed+State)
• Unfunded Liabilities: $ 116 trillion
Total National Assets: $113 trillion
• Debt doesn’t include Federal Reserve, Fannie Mae +
Freddie Mac and FHA obligations
• Total US Debt: $ 61.6 trillion
• Student Loans: $1.3 trillion (600,000 defaults 2011/12)
• Federal Budget Deficit
-2014 est. $0.492 trillion (revised)
• 2013 Trade Deficit $691 billion.
• Historically average interest rates would bankrupt U.S.
Global News
• Q2 GDP: EU 0.0%, Japan minus 7.1%
• ECB interest rates: Deposit rate minus 0.20%,
Refinancing 0.05%
• Referendum on Scottish Independent on Sept 18th.
This could cause havoc.
• China posts record trade surplus.
• Ukraine more sanctions, (temp) ceasefire.
• Israel and Gaza on (temp) ceasefire.
• ISIS still a threat.
• Ebola – not that contagious.
GDP Growth by Economy Since 2007
Inflation by Region Minus Food/Energy
2-Year Govt Bond Yields Negative
Japanese Benchmark Interest Rates
Stocks, Commodities,
Currencies, Bonds
Market Summary
• Big Story is Currency: Dollar, Yen rallying,
Euro and Pound falling.
• Treasuries rallying/interest rates falling. US
rates high compared to Europe/Japan
• SP 500 hit 2000 on lowest non-holiday
volume of year.
• Commodities lackluster to down.
Stock Market Performance During Each Fed Easing
NYSE Margin Debt vs SP 500
Investor’s Intelligence Bear Sentiment Same as1987
Dow Industrials: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
S&P500: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Nasdaq: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Russell 2000: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
German DAX: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
UK FTSE: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
UK Pound FXB: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Japan Nikkei: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Japanese Yen: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
China Shanghai Composite: Three Years Weekly
10, 400, 65-Week Moving Averages, RSI, DMI, MACD
India SENSEX: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Brazil BOVESPA: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Russia RTS: Three Years Weekly
10-Year Treasury $TNX: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
30-Year Treasury $TYX: Three Years Weekly
10, 40, 65-Day Moving Averages, RSI, DMI, MACD
US Dollar DXY: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Euro FXE: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Swiss Franc FXF: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Australian Dollar FXA: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Copper JJC: Three Years Weekly
10,40, 65-Week Moving Averages, RSI, DMI, MACD
Oil WTI: Three Years Weekly
Charts We’ve Been Watching
Gold ETF GLD: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Silver ETF SLV: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Gold Miners ETF GDX: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Coffee ETF JO: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Coal Stocks ETF KOL: Three Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Uranium Stocks ETF URA: Three Years Weekly
10, 40, 65-Day Moving Averages, RSI, DMI, MACD
The End