Market Commentary July 13, 2017


Fed's Chair Janet Yellen and the Fed were in the news yesterday all day long, as the central banker continued with her testimony on monetary policy to US Congress. She stated that the Federal Reserve would be throwing the US Dollar under the bus. She did not use those exact words. However, the key phrases she did use were not all that entirely different.

The reality is that the US Dollar continues to be plummeting continuously throughout 2017, in fact, it is lower almost 7% thus far. And that has been throughout a period when the Federal Reserve was boosting interest rates several times!

Following Wednesday's unexpectedly dovish language by Mrs. Yellen, worldwide financial markets staged an energetic move, with many of the key Indices smacking fresh all-time highs. 

The Yellen has been referring to ambitious tightening with plenty of more rate increases and ways in which the banksters are going to be draining liquidity from the financial system by way of a reducing of its balance sheet. And then, however, Yellen out of the blue made a full 180-degree turn right in front of US Congress. A several of her critical comments were:

* Inflation is performing well within the Fed’s objective at this time.

* The Federal Reserve will not use the reduction of its balance sheet to be a “monetary weapon” (which means it will not be about emptying liquidity from the financial system).

* The Federal Reserve does not have to increase interest rates a whole lot further to be in a neutral state.

With that being said the rally with the key Indexes such as NASDAQ and the DAX30 stalled precisely at the critical resistance levels which in turn serve as the line in the sand preceding a whole new higher segment which will be validated. 

And as a result of inherent lack of strength in the key stock markets, all markets incline in the direction of a much deeper correction within the coming several weeks, regardless of what our whiz-bang banksters do. To put it differently; the Yellen and company are in fact are nearly finished with tightening, And as a result, the US Dollar will be toast further.

The Markets

The US stock market crawled a little higher by midday yesterday, in dull trading. In the afternoon session, the main Indices rose up slightly more, closing with all the fractional gains.

The Indexes submitted slight increases on the trading day Thursday. The S&P500 climb 4.58 points (0.2%) to 2,447.83, the DowJones edged up 20.95 points (0.1%) to 21,553.09, and the NASDAQ went up by13.27 points (0.2%) to 6,274.44.

Off from stock markets, the crude oil increased by one percent, the US Dollar was virtually flat, and the fixed income was much lower, as have been the precious metals, guided by Silver market, which dropped 1% while Gold decreased 0.2%.

The primary Eurozone markets finished the trading day mixed. While the DAX30 Index inched up by 0.1%, the FTSE100 Index dropped by 0.1%, and CAC40 Index went up by 0.3%.

Asia-Pacific stock markets throughout the region generally migrated higher throughout the trading session on Thursday. Australia's AOI (All Ordinaries Index) leaped by 1.1%. Nikkei225 Index closed down merely greater than the unchanged level, while HK's Hang Seng Index jumped by 1.2%.

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