June 7, 2015
Weekly Market Outlook
By Keith Schneider
Stocks had yet another lackluster week with sideways choppy action as volatility remained low and our directional indicators flat lined. On the other hand the real action was in bonds and not just ours. US Bonds anticipated the good economic data that was released on Friday which included robust job growth (even better if you are an immigrant) and hit yields not seen last October. US Bonds look to be putting in a massive top, potentially ending the 30 plus year long term downtrend in rates. Meanwhile, across the pond, German rates went thru the roof after their 10 year bond almost hit zero, then jumping to almost .84%. WOW! If you were one of the unfortunate people to have bought German bonds last week at zero yield, the value of your bonds dropped the equivalent of about 25 years of interest payments in just a few days.
Yellen is under pressure to raise rates with the US economy growing steadily, while IMF head Christine Lagarde is clearly worried about a more fragile global economy. In an unprecedented press conference Lagarde pleaded for Yellen to hold back jacking up rates until 2016.
The Greek drama continues to play out amid so much double talk that its press releases come across more as a farce than a tragedy. Although the Greek government had enough cash to make a partial payment this week they decided to hold onto the cash. The Greek Finance minister made positive comments about a possible deal by the end of the month to keep from defaulting, while at the same time he held back payments.
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