Who is in the game?
Markets started free drop after job report last Friday. It was indeed disappointing. But immediately, some experts pointed out that political importance is much more weighted than economic importance because 8.2% and 8.1% aren't statistically significant. Regardless of kinds interpretation, the job report, which had been stewed before its release, some said 140,000 and other predicted 170,000, fueled the drop and worst May performance in the past 3 years. Such speculation actually reflects how market participants anxiety and nervousness.
On one side, media coverage broadcasts that the economy isn't recovering fast enough and jobs aren't creating quick enough. On the other hand, economists are long term optimistic about the economy. The rift, many believe, is caused the presidential election. No doubt that job creation is one of the epicenters in the campaign. If job recovery had had strong momentum, the campaign might shift to other topics. But it will become the main battle field. After the election and the uncertainty fades, we will be on track again. So it is a buy-in-dip case.
Opposing views aren't so optimistic because, don't forget, there is Europe. Yes, let's see who is playing that.
Besides the job report, a longer topic is the European debt crisis. European stocks have been hammered down a lot. On the other hand, many fund managers are increasing their European face time now to have better understanding on the situation and seeking bargains, according to the WSJ. One managing fund CEO observed that in one conference there were two times more journalists than protesters. He concluded that the situation may be over-hyped and it is a good time to buy. Also, these professionals noticed that Europe is a bit different than the U.S. You do need face time to talk with officials, investors, and companies to obtain useful information. Therefore, the more the market drops, the higher the frequency they fly to Europe. We can see that while fund managers sell the others find excellent time to buy into it.
Market participants also seem not afraid of the exit of QE2 in June. Treasurys are still going up. Fund influx appeared to have a first time negative after a row of 19 increases. Fed officials, except Bernanke, expressed no need of QE3 in various occasions. But the markets still try to test the water. Headlines like "How about another QE?" sprouted after Friday's rout. Nice try and nice buy. These cry-for-candy tactics may not work.
In all, economy is moving in long term speaking. So ignore short term ripples and don't panic. Wait for bloods on the street and be brave.
On one side, media coverage broadcasts that the economy isn't recovering fast enough and jobs aren't creating quick enough. On the other hand, economists are long term optimistic about the economy. The rift, many believe, is caused the presidential election. No doubt that job creation is one of the epicenters in the campaign. If job recovery had had strong momentum, the campaign might shift to other topics. But it will become the main battle field. After the election and the uncertainty fades, we will be on track again. So it is a buy-in-dip case.
Opposing views aren't so optimistic because, don't forget, there is Europe. Yes, let's see who is playing that.
Besides the job report, a longer topic is the European debt crisis. European stocks have been hammered down a lot. On the other hand, many fund managers are increasing their European face time now to have better understanding on the situation and seeking bargains, according to the WSJ. One managing fund CEO observed that in one conference there were two times more journalists than protesters. He concluded that the situation may be over-hyped and it is a good time to buy. Also, these professionals noticed that Europe is a bit different than the U.S. You do need face time to talk with officials, investors, and companies to obtain useful information. Therefore, the more the market drops, the higher the frequency they fly to Europe. We can see that while fund managers sell the others find excellent time to buy into it.
Market participants also seem not afraid of the exit of QE2 in June. Treasurys are still going up. Fund influx appeared to have a first time negative after a row of 19 increases. Fed officials, except Bernanke, expressed no need of QE3 in various occasions. But the markets still try to test the water. Headlines like "How about another QE?" sprouted after Friday's rout. Nice try and nice buy. These cry-for-candy tactics may not work.
In all, economy is moving in long term speaking. So ignore short term ripples and don't panic. Wait for bloods on the street and be brave.
posted by Intl.investment.services at
10:20 AM
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