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One Trader Reminds You What ‘The Real Driver Of Markets’ Is
Via Kevin Muir of “The Macro Tourist” fame
Another day, and another steady grind higher in US stock markets. In all my years trading, I can’t recall a non-summer or non-holiday period that has been as boring as the past couple of weeks. I mean, B-O-R-I-N-G. The ironic part of this snoozefest? There has actually been a fair bit of new information for the stock market to digest. Whether it is the recent uptick in wage inflation, or Trumpster’s “we will totally destroy” North Korean
Gotta luv Kevin. He’s right on china.
Though it has been said that US defines the structural change and China defines the cyclical change.
So indeed, watch out for the volatility cycle to shift gears after the twice-a-decade “communist” dog & pony show in china ends later this month. (china being about as “communist” now as ayn rand, lol)
And if trump doesn’t wimp out by nominating obama’s boy powell for Fed chair and instead goes with warsh or taylor, perhaps the US fed will usher in a desperately-needed structural change to global monetary practice.
(For example, the Taylor rule would currently calculate the fed funds rate at 3.75% instead of the 1.25%)
A dovish-to-hawkish bias change at the US fed together with a China cycle change could be an awesome one-two punch to the current market complacency & prices. We can hope.