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Kevin Barry - Market Roundup July 2011
We began the month with the stock market putting in a sterling run up on the news that an insolvent country with debts that can never be repaid, whose Government gives a nod and a wink to widespread tax-avoidance and endemic corruption is going to be lent more money. Fakelaki all round. Yiamas!
On the other side of the pond, the spectre of the Federal Reserve's Quantitative Easing Frankenstein monster stirred once more, threatening to terrorise the village yet again when Ben Bernanke hinted at "additional policy support" giving markets the hint of an impending round of QE3. Stocks rallied sharply and put the US Dollar back on the ropes. However, later in the week, the good doctor (Bernanke, not Frankenstein) took the wind out of the market's sails by declaring that the Fed is "not prepared at this point to take further action" after all which sent stocks back south from whence they came.
We look at the effect of QE on the stocks and commodities sectors and speculate about the likelihood of the printing presses being cranked up one more time.
Kevin also discusses the comparative pitfalls and advantages of holding US Dollar denominated assets.