Here we are again in flux between mildly improving economic data and sentiment here in the US and deteriorating financials and headlines in Europe.
In 1970, Rufus Thomas scored his first and only number one R&B hit with (Do the) Push and Pull. It was corny and not quite as timeless as his other hit from that year (Do the) Funky Chicken. It was also an obvious copycat of the Tighten Up by Archie Bell & the Drells. But I digress…
Each day we wake up to the overnight news flow not knowing whether we’ll be pushed higher by increasing confidence in our ability to avoid recession…or pulled lower by the bond yields and CDS charts and infighting in Old Europe. Will today be an all-or-nothing up day or an all-or-nothing down day? 200 points higher in a frenzy of performance chasing or 200 points lower in a fit of global macro de-risking.
Better than expected retail sales? But Belgian bond yields are shooting higher! Industrial Production and Capacity back at pre-crisis levels? But Spain is the next Italy which was the next Greece which was the next Iceland!
And while all this push-and-pull asserts itself on our markets, far off in the distance is perhaps the largest economic wild card in the history of economic wild cards – whether or not the infant-capitalists in China can pull off the ne’er-sighted, fabled “soft landing” – a thing which has never actually occurred anywhere in the last 25 years, let alone in an economy that is now the world’s second largest.
Valuations in US stocks keep us somewhat buoyant, but each new day brings yet another bout of “now what?”