Investment Markets Overview – w/e 31 Jan 2014

US President Barack Obama presented his “2014 State of the Union Address” this week, promising to raise the minimum wage from $7.25 to $10.1, a huge hike of 39%, whilst also announcing a new retirement fund called, “MyRA,” going on to say that it would guarantee a “decent return” for workers at no risk of them losing what they put in. For a leader who expresses concern over inequality and unity, his plan for the minimum wage, which is for federal contracts only, is likely to be highly divisive.  within both Congress and the nation at large, hence he is already planning for it to by-pass congress by issuing an executive order. As for the MyRA plan, it appears to be an attempt to find the “greater fool ” now that the 31 year bond bull market has ended, not to mention that the Fed will find it difficult to find a willing buyer for the huge amount on long bonds they bought under their QE programme. By allowing the public to invest in US treasury bonds tax-free, it is hoped the Fed has an exit, but if the plan isn’t taken up to the extent required, due to the likely capital loss as interest rates climb, plan B could be the compulsory purchase of US Treasuries by all US retirement accounts. 

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Subscribe to the Full Investment Markets Overview Newsletter which contains the following:-

Additional Commentaries:

  • US economic data . . .

  • Euro-Zone   . . .

  • The UK . . .

  • Out East   . . .

  • The $US index  . . .

  • Within the commodities complex  . . .

  • Economic data due next week includes  . . .

  • The FOMC statement, which followed Bernanke’s final policy meeting this week, was notable for its generally upbeat tone without even a murmur on the escalating emerging market stress, ,  . . .

Charts:

  1. Indices Weekly
  2. US GDP vs US Personal Income vs US Personal Consumption
  3. Bank Lending to the Private Sector vs ECB M3 Y on Y
  4. Japanese Household Spending vs Japan CPI
  5. Commodity 1 Week Moves

Table:

               13 Indices, 11 columns of detailed information, for accurate analysis

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For Bonds, Higher Yield = Capital Loss

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Click  HERE to view Details of the full version of this Newsletter

which includes full text and detailed Charts for each section

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