Technical & Fundamental Oil Reports Specialists

Follow us

The wall of worry has become a mountain

Published Monday, December 22nd, 2014

There are two worlds out there. The first a real world dealing with a series of major and mini crises where growth is disappointing, deflation threatens and firefighting is the norm. The second an equities world that sails on merrily avoiding every outcrop but getting ever closer to the reef and running aground.

Yet again last week stock markets shook off doubts and rebounded. A classic end of December “Santa” rally perhaps. The FTSE 100 has seen December gains nine times out of ten during the 30 years of its existence. There is however something significant keeping the ball in the air and that is low interest rates and QE, aka loose monetary policy.

Janet Yellen announced on Thursday that the Fed would be “patient” over the timing of an interest rate increase. The market is convinced that the ECB will have to launch full blown QE in 1Q buying government bonds, with or without German approval, to fight off deflation. Either that or Mario Draghi will resign. Over in Japan Shinzo Abe has strengthened his position and will continue to print loads of money and there is a good chance of a further monetary stimulus in China.

to read the rest of the report, please click here

Posted by David Hufton