April 28, 2014
Weekly Market Outlook
By Keith Schneider
If you are looking for logic from the current market action across various asset classes you might have to wait till the Cows come home or Cattle prices retreat. Many traditional inter-market relationships have simply broken down.
For example, Cattle (COW) has been running up along the upper range of a multi-year base, while Corn prices have moved up. The list of hot commodities includes coffee, corn, cotton, and energy.
Generally the relationship between the cost of feeding livestock runs inversely to the price of cattle, so this widely accepted inter market relationship is not performing as expected
Adding to the markets illogical behavior is that gold bullion has languished in a very unstable geo-political environment.
Events continue to heat up in the Ukraine with the US entering a new phase of hostility with Russia. It has embarked on a PR war with Putin by exposing the vast wealth he has stolen and hopes that public opinion amplified by social media will ultimately remove him from office.
You might as well throw into this cauldron of confusion that commodities prices are rising, with interest rates easing, even while the Fed is to looking to taper.
These strange cross currents exist while US Equities are basically at all-time highs. Let’s go to the video tape and see if we can discern anything meaningful...
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