Monthly Archives: August 2015

Stanley Fischer’s Jackson Hole Speech: Fed Determined to Lift-Off

August 29, 2015
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Stanley Fischer’s Jackson Hole Speech: Fed Determined to Lift-Off

Stanley Fischer delivered a critical speech this weekend at the Jackson Hole, Economic Symposium, outlining the Fed’s forward looking view on inflation and the potential for a lessening of factors that dampen inflation. This speech signals the Fed is staying the course and determined for rate hike lift-off on the advertised time-table. CJF interprets this speech hakwishly, relative to market expectations for a push-out to the December lift off timeframe. It is likely that December is the latest possible preference for lift-off with September (or October) still very much on the table. Will be interesting to see how volatile markets react to some of the forceful language in the speech. The speech, in full, is a worthwhile read. Excerpts with CJF commentary: The past year’s energy price declines ought...

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Emerging Market Doldrums

August 26, 2015
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Emerging Market Doldrums

Not out of the woods yet – no way. The world has changed in the past week, and unmistakably, extreme volatility (mostly of the down kind) is back within financial markets. The potential of Fed rate hike cycle, in the not too distant future, is wreaking havoc. An unintended consequences of the extended period of ZIRP (2011-now) is the degree to which the rest of world, particularly EM, depend on it. Market lurches with random gaps higher and sudden sell-offs occur daily since China’s FX policy shift and highlight the fragility of financial markets. The overarching issue for EM can be reduced to capital flows and structural reforms. The 2015 circus act out of Greece/EU, in hindsight, deflected attention from the coming EM storm/crisis. With Greece now “fixed” EM...

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Market Treads Water

August 17, 2015
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Market Treads Water

After a one year hiatus (CJF writing hiatus), the US equity market remains resilient, hovering around 2,100, in a historically tight range for the past 9-months. The 20-day, 50-day, 100-day, and now 200-day, moving averages are converging, because again, the market is flat. A few observations to re-engage investment dialogue on this blog… At risk of a truism, sideways markets always resolve in one of two ways: a breakout to the upside or downside. CJF points this out because investors should not be lulled by extreme sideways action, nor should investors underestimate the possibility of a significant move in either direction. The current sideways market is manic, with a rotating focus on different exogenous factors, some of which have an inflated perception of ultimate impact. Market negatives and positives...

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