Friday is US nonfarm payrolls
This should give us an idea of how the US economy is doing coming out of the brutal winter we had
If the news is good, it should push indices to new highs. If markets can't respond to good news it means they are exhausted and really vulnerable.
if the news is poor we could see markets pull back. Remember the Fed is unlikely to slow or stop tapering unless the wheels really fall off
Did I mention the Fed? It's rare that a Fed meeting gets so totally overshadowed by everything else going on
And I believe we'll hear from the Fed tomorrow. Do you think they'll provide any further hints on when rates will rise?
With all the confusion that ensued following the last meeting between the talk of 6 months and the member projections, I think they will try to settle the matter by taking a dovish approach and saying that nothing is cast in stone
So, just to back up for a moment. You say if markets don’t react positively to US economic news this week, watch out, things are vulnerable. If that happens, should that then be a trigger for investors to start cutting back on their equity exposure?
If markets fail to respond to good news with rallies it would suggest that it has already been priced in and markets are vulnerable to a correction, especially heading into a seasonally weaker time of the year.
Well, this should indeed be an interesting week....
Indeed. The start to this week has been pretty slow but the back half could more than make up for it.
You closely follow all the data that comes out of China, and certainly evidence has been growing of a growth rate there that’s slowing. What’s your view of the country, its debt issues, and what it could mean for Canadian investors with heavy commodities exposure?
Overall, I think we need to be ready for a slower growth China but its so big now that even slow growth represents significant demand. The government has a tough balancing act keeping it all going. As we have seen in Europe debt issues could be a drag on the economy for some time.
So, here's a question from our audience. Apparently we have a substitute for our weekly web chat fan mbgrinder
So far the biggest impact of Ukraine has been in commodity markets, particularly wheat as it is a big grain exporter. The immediate risk is of a civil war that could disrupt commodity exports. Crude oil could rally a bit as well along with gold...
With Russia being such a big energy producer to Europe, it would seem that they will try to keep the situation contained. Nobody wants this to spiral into a wider confrontation although history tells is it can't be ruled out...
If things were to worsen significantly, European markets could be at risk but so far the Ukraine related action has been contained to grains, energy and metals
Thanks Colin. We covered quite a bit of ground today, and we're coming up to the end of the chat. Any final thoughts for our audience today with regards to their investing strategies for the rest of this year?
For long term investors its important to focus on the long term and the improving economy and to not get flustered by confusing shorter term action recognizing that the type of market we are in is not unusual. For short term swing traders the markets have the potential to present significant opportunities in both directions right through the rest of the year.
Thanks very much for all of the great questions.
OK, many thanks for joining us today Colin - and thanks to all for tuning in. We hope you found the chat interesting, and we'll be back next Tuesday at 1pm ET with another one.