Federal Reserve Reservations

By |2016-11-17T15:50:40-04:00May 17th, 2016|Categories: Global Market Update|Tags: , , , |

It’s all good. Eric Rosengren, President, FRB Boston. Source: FRB Boston That’s what Eric Rosengren, President of the Federal Reserve Bank of Boston assured about 150 business leaders from the Concord area last week. Rosengren has spent his entire career and the Boston Fed. He got a BA from Colby College and a Ph.D. from the University of Wisconsin – Madison in economics. He joined the Fed as an economist right out of graduate school, and ran [...]

Digging Deeper

By |2016-11-17T16:04:06-04:00November 25th, 2015|Categories: Global Market Update|Tags: , , |

Why do commodity prices keep falling? Photo: Pedro Perez. Source: Morguefile The world is awash in oil right now. And it’s the same story for copper, zinc, and a host of other industrial materials. The price of oil is down 60% from its peak last year; a broad-based index is down almost 30%. What’s going on? Part of the answer has to do with the dollar’s status as a reserve currency. The US is doing better than [...]

Moment of Truth For Non-U.S. Markets

By |2016-12-01T15:44:55-04:00May 22nd, 2015|Categories: Technical Perspective|Tags: , , |

Image Source: Philip Brewer, Flickr The FTSE All World Ex-US index (VEU) is testing multi-year resistance in both dollar and gold terms. (See Chart 1)  Dollar-based investors are obviously interested in dollar thresholds, but why monitor relative strength in gold terms?  Because gold provides an alternative base “currency” that measures confidence in the institutions of money and credit.  A market making higher highs versus gold is exhibiting organic strength independent of local-currency devaluation or unsound credit expansion [...]

Rich Dollar/Poor Dollar

By |2016-11-17T16:20:03-04:00May 14th, 2015|Categories: Global Market Update|Tags: , , |

Image Source: Wikipedia Has the rally in the dollar run out of steam? The US Dollar has been on a roll. Over the past year the trade weighted dollar has risen 25 percent. The strong dollar has depressed exports, retail sales, industrial production, corporate earnings, and a host of other factors. The combination of tighter money here and aggressive QE in Europe and Japan have raised the dollar’s value significantly, after three years of little change. Image [...]

Choppy Seas

By |2016-11-17T16:23:25-04:00March 23rd, 2015|Categories: Global Market Update|Tags: , , |

Image Source: iPaintingsForSale What’s wrong with the market? So far this year, the market has been struggling. Up 300 one day, down 300 the next, it can’t seem to get its sea-legs. If you watch too closely, the volatility will make you sick. What’s wrong? Two words: the dollar, and oil. A strong dollar may help American tourists plan European vacations, but it’s tough on folks who earn cash overseas. Overall, earnings expectations for companies that earn [...]

Rising Dollar, Rising Markets?

By |2016-11-17T16:23:46-04:00March 17th, 2015|Categories: Global Market Update|Tags: , , , |

Image Source: Digital Juice What does a strong dollar mean for the rest of the world? Over the past six months the trade-weighted dollar has risen 25%. A strengthening labor market here, monetary stimulus by the Bank of Japan, Q€ in Europe, falling oil prices in Canada, and a slowdown in China have depressed those currencies relative to ours. A strong dollar has lifted the prospects of both Europe and Japan. Those export-oriented economies can expect higher profit [...]

Dollar Rising?

By |2016-11-17T16:35:02-04:00November 5th, 2014|Categories: Global Market Update|Tags: , , |

Where is the dollar going? Last night we had an election. Republicans took control of the Senate and expanded their control of the House. Millions of Americans took to the polls to express their political preferences. But a different election has been taking place—one where anyone, anywhere can vote. And this election happens every day. This occurs in the financial markets—stocks, bonds, and currencies. Voting requires only dollars, not sense. And lately they’ve been expressing confidence in [...]