EUR 8.50 For Business Accounts Only

The Morning Track fomo

- The Morning Track – FOMO by Bob Savage
http://track.com/articles/the-morning-track-fomo/

Fear of missing out. The week in review my still rest on the risk of a sharp reversal due to US unemployment, but I doubt it. Rather, this week brought a host of stronger global data from China PMI at 5-year highs to Japan Tankan at 10-year highs to US ISM similar and European outlooks holding strong. The world is growing better with consumers and corporate moods robust and that mixes with low or negative rates to make equities look great. Valuation be damned. There is a fear of missing out – FOMO – and this is the start of the capitulation stage of market movement. The rest of the day will be consumed by analyzing the US jobs report and weather related effects with many betting that the market ignores weakness and celebrates strength – thus the USD gains overnight along with rising US rates. The weekend brings another tropical storm Nate to the Gulf Coast hitting refining capacity and rigs. It also brings the usual political watch with the final results of the
New Zealand election likely to bring a flurry of coalition talk, then the Austria election Oct 15, the Trump Iran decision and the ongoing Abe campaign into Oct 22 vote. Coalition building in Germany is at a snails pace and maybe paced by the Dutch which seem to have formed a government but it took from the February election. Markets don’t care – its 3Q earnings season next and the 4% expectations for earnings look easy to beat after 2 quarters over 10%. Energy is the leader and IT maybe the surprise driver. No one seems too troubled by much of anything and that complacency forces cash to work. For the USD and US bonds, Equities are leading and that leaves the unemployment report as the hurdle of noise which likely just doesn’t matter after 8.31 am – so the risk-on story gets reflected in FX with the JPY with 113.26 in play from September 27 highs against the 200-day below 112.