View From the Hill: Seriously Japan?

Posted on Posted in Views From The Hill

Market Commentary: August-2-2016

bulls-and-bears4The lack of will to match ideas with action kills the deal. Japan’s Prime Minister Abe proposed a 28 trillion yen package that only allocates 4.6 trillion yen this year, which at best is estimated to add only 0.1% to 0.2% to Japan’s GDP. Combine this with the BOJ’s decision to not lower interest rates and you get a divergent path from its target inflation rate and a horizon future which looks like more stagnation. Seriously Japan?

Now that I have gotten that off my chest, I can talk about the markets with purer clarity. Fundamentals are one thing, but in reality, price is only reality, whether rational or irrational. So what is the market telling us now? Let’s see…

Making new 5-day lows on the S&P 500 while only into the 2nd day of the week is probably not how bulls wanted to start the week or month, but this is what we have. The stock market is now officially in correction mode, which is not to be confused with being in a bear market. Yesterday, I noted the sharp deceleration in momentum as a greater number of S&P 500 components continue to cross below positive territory. The Dow Jones Industrials have been forewarning of such with 7 consecutive days of declining prices.

 

spy-wkly-8-2-2016
Click to enlarge

 


ETF Performance Summary: August-2-2016

There will be no comments this evening for the ETF asset class analysis. Please see performance table below for your reference.

 

vfth-etf-summary-8-2-2016
Click to enlarge

 

 

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *