September 30, 2013
Weekly Market Outlook
By Keith Schneider
What's the world coming to when President Obama has better communications with Hassan Rouhani, than with John Boehner? The prospects of improved relations with Iran, compromise with Russia, a postponement of war with Syria, along with looming Israeli-Palestinian peace talks, are enough material to look like peace could be breaking out all over. Hopefully, that spills over to the horrors in Kenya and Nigeria.
The possibility of Iran coming to the World Stage as a reasonable nation is certainly a major development on multiple fronts. Regardless of whether you believe the new Iranian president (former disciple of the supreme Ayatollah, Khomeini) has become an enlightened being or he is just a pragmatist that knows that the US brought down the USSR through its economic power and Iran is next, the opening of dialogue with the US could be the start of something big.
The war premium on crude oil prices has certainly been mitigated and there is even a lot more of that to come if things continue on its current trajectory. This is all good news and a potential peace dividend for the global economy. However, directly in the spotlight, is the stupidity playing out on Capital Hill regarding our debt ceiling. The shenanigans have jacked up the VIX (volatility index), and caused an orderly sell off of the US equity markets. Most big players believe that it's just like really bad theater that starts with a bad script followed by even worse acting. They are waiting for the show to be over to resume their buying, assuming of course, the Fed keeps the gas pedal floored.
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