Is the Volatility of Data in Hiding? - Weekly Blog # 956

 

 

 

Mike Lipper’s Monday Morning Musings

 

Is the Volatility of Data in Hiding?

 

Editors: Frank Harrison 1997-2018, Hylton Phillips-Page 2018

            

 

 

Looking at the Unhelpful Data?

When stock market followers looked at stock price volatility during the summer they saw relatively low volatility. Thus, they think not much is going to happen that will cause prices to gyrate. As is often the case, they are possibly looking at significant changes in several fluctuations.

 

Below is a list of potential change agents that occurred this week:

• Changing national strategic alliances
• Over half of US stocks fell this week
• AAII sample more negative
• Iran’s plans
• Savings rates in US and China
• 3 vs 12 months

 

Strategic Alliances

Countries and societies are changing alliances, impacting their level of support in the future. This weekend, Iceland will vote on whether they should re-engage with Europe and be less reliant on the US. Similar feelings are being expressed in numerous countries, which are trying to determine the price of dependence on the US. The armaments business is likely to grow.

 

Over Half of US Stocks Declined

Fifty four percent of NYSE listed stocks and 58% of NASDAQ stocks fell this week. Only 5% of NYSE stocks and 13% of NASDAQ stocks hit a new high this week, with the NASDAQ reaching its highest price for the year. From an employment viewpoint this raises some questions. The American Association of Individual Investors (AAII) survey showed only 32.9% of participants being bullish for the next six months vs 35.5% bullish the prior week.

 

Iran’s Plans

Apparently, the Iranian leadership believe that they are winning the war and are using the low level of fighting to expand domestic counter- intelligence. (I wonder if this suggests an increase in secret subversive activity in the US and other countries?)

 

Imbalance of US and Chinese Savings Plans

According to Greg Ip in Saturday’s WSJ, the US level of savings is insufficient and is causing us to rely on increased debt levels. In China however there is too much savings, which keeps the amount of debt down and creates a problem of low import prices for many western countries. These trends reversing would be good for US companies already selling into China, like Apple*. (* Held in personal and client accounts)

 

3 vs. 12 Months

Fortune Magazine’s newest contributor is George Calhoun, an entrepreneur turned professor who also serves on board committees at the Stevens Institute of Technology, where I also serve. He raised the question of the Federal Reserve relying too much on 12-month numbers (produced by the government) vs 3-month numbers, or shorter. The markets react much faster than in even the shorter period. (I believe the new Chairman of the Fed has a somewhat similar view)

 

As usual, I would like to hear from you so I can learn.

 

 

 

Did you miss my blog last week? Click here to read.

Mike Lipper's Blog: Fears On a Quiet Summer Weekend - Weekly Blog # 955

Mike Lipper's Blog: What Could Go Wrong? - Weekly Blog # 954

Mike Lipper's Blog: Are History & Economics Books Closed? - Weekly Blog # 953

 

 

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