Everything is pretty flat today. The stock market is close to the old highs and deciding whether to push through or head back down in another see-saw like we’ve had for months.
The CEO of Zillow is calling this the bottom of the housing market. Prices are up about 2.5% from last year and I think he’s probably right, though interest rates will have to stay down for that to continue.
As long as the economy is weak continuing low rates should be no problem, especially if Ben Bernanke embarks on another round of intervention which many people expect him to do. He probably either has to act in September, far enough ahead of the election or intervene after the election. Watch the 8/31 Jackson Hole speech.
Regarding the election, things are pretty close but Pres. Obama is doing better in the swing states, especially since he ramped us his negative ad campaign against Mr. Romney. I really hate it that negative ads work, no matter which side runs them. They are usually so misleading. And I detest the constant focus on class warfare.
The way it stands now we could end up with Romney winning the popular vote and Obama winning the electoral vote. Romney’s support seems as lackluster as the candidate. It may all come down to who does the better job turning out their voters and if so, I worry for Romney.
We are still waiting for details of a European plan to which ECB president Draghi alluded recently. The European market in the meantime will likely go up or down based on how investors handicap the chances for a firm plan.
Natural gas sold off earlier this week when the latest report came out that showed supplies not nearly as tight as was thought. That’s OK. We are still at a profit and I like the trade long term.
Bonds are seeing a little profit taking the last two weeks. Gold is up 4% from its mid-May bottom but is sort of stalled here. It would go up if Mr. Bernanke does intervene again. Oil keeps going higher.
With the looming “fiscal cliff” when spending is automatically cut in January and tax breaks expire, if Congress doesn’t work something else out before then, I think the odds of Bernanke getting involved again, i.e. monetary intervention, are pretty high.