Monday morning you sure look fine
Friday I got travelin on my mind
First you love me, then you fade away
I can't go on believin' this way – Fleetwood Mac
What an exciting week we have in store!
First of all, it's options expiration in Friday and we have a holiday weekend in the US (and Happy Year of the Snake to our friends in China, who are closed this week) along with plenty of earnings but, most importantly this week – we have FED SPEAK!
That's right, this week we'll hear from Esther George tomorrow at 11:30, Charlie Plosser at 7:30 with Jimmy Bullard speaking Wednesday at 11:10 and, oddly enough, at 12:50 on Thursday as well and Sandy Pianalto takes us home Friday morning at 9:50.
Sandy is the "dove" of the group and even she is pretty far down the hawk ladder while the others are all reliable Fed hawks with Bullard only exceeded by Fisher in his hawkishness but they used Fisher last time they had notes to sell so this time it's up to Bullard to scare investors into bonds – strategically placed just ahead of both the 10-year and 30-year auctions.
That places a bit of a downside risk on the markets this week as the Fed will have to walk that fine line between keeping those long-term rate expectations low while keeping people believing that it's safe to go out and risk their assets in the markets, homes, cars, durable goods, equities, etc.
Keep in mind that, on this Bloomberg Chart – Ben Bernanke is considered moderately hawkish. If moderately hawkish is printing $2.7Tn in 5 years – I wonder what would happen if the Doves ever took charge?
Mo' free money has been our rally cry since 2009 and, as you can see from our Big Chart – it's certainly working well enough as we enjoy what is shaping up to be a 20% run in the markets since Thanksgiving. "First you love me, then you fade away" is how the song goes and we certainly hope…
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