Anatole Kaletsky has a thoughtful and persuasive piece (paywall) in Barron’s magazine on why global stock markets have a good deal more room to rise: ‘Four Reasons Why the Bull Market Has Far to Go’.
First, the world economy is finally swimming into a fabled ‘sweet spot’, with simultaneous, reasonably strong expansion in most major economies, even as spare capacity, technology and globalization keep overheating and inflation in check. Second, fears that the unorthodox zero-interest rate, quantitative easing policies applied by the Fed and other central banks would lead to hyperinflation or financial collapse have proven false. On the contrary, it is now better understood these policies were instrumental in getting us to the present sweet spot. As a result, and third, economies like Europe and Japan that are still at an early stage in their recovery can more confidently apply these monetary tools to sustain growth going forward. And fourth, the upswing in corporate profits, while it will likely hit a ceiling in the U.S., has started only recently and has a long way to go elsewhere in the world.
If I have a criticism of Kaletsky’s analysis, it is that he may be too sanguine about the preferences of central banks. If anything, monetary policies were too restrictive in the wake of the global crisis in 2008, allowing high unemployment and stagnation to persist much longer than they should have. The ‘revealed preference’ of central banks to squish inflation below even stated targets, at the expense of employment and activity, may lead them also to prematurely squish the present recovery.
All this, though, is not the only or main reason I thought to blog about Anatole Kaletsky’s article. No … it was the very first comment on his article at the Barron’s website:
“Saturday contains the Average TOP DAY of the Mars-Uranus synodic cycle, then the Super Moon and Mercury Retrograde on Sunday. This weekend could be a most important concentration of "Change" Power! Watch your charts for breaks in trendlines and support/resistance levels. Major turning points cramped into this weekend will likely turn Bitcoin, stock groups, emerging markets, economic trends, political trends, etc. etc. +/-3 days.”
So, there you have it. Reasoned economic blah-blah is all very well, but, on this blessed Sunday, do keep an eye on the horoscope, and those darn Super Moon and Mercury Retrogrades.