GLOBAL ECONOMICS AND POLITICS

Leo Haviland provides clients with original, provocative, cutting-edge fundamental supply/demand and technical research on major financial marketplaces and trends. He also offers independent consulting and risk management advice.

Haviland’s expertise is macro. He focuses on the intertwining of equity, debt, currency, and commodity arenas, including the political players, regulatory approaches, social factors, and rhetoric that affect them. In a changing and dynamic global economy, Haviland’s mission remains constant – to give timely, value-added marketplace insights and foresights.

Leo Haviland has three decades of experience in the Wall Street trading environment. He has worked for Goldman Sachs, Sempra Energy Trading, and other institutions. In his research and sales career in stock, interest rate, foreign exchange, and commodity battlefields, he has dealt with numerous and diverse financial institutions and individuals. Haviland is a graduate of the University of Chicago (Phi Beta Kappa) and the Cornell Law School.

 

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US STOCKS: SHADOWS AND SIGNALS © Leo Haviland February 3, 2014

Yet during the darkest days of the worldwide economic crisis of late 2008/early 2009 as well as during the subsequent recovery, Federal Reserve Board easy money policies have played key roles in encouraging bull moves in the S+P 500 (and many other equity playgrounds). Likewise, the elimination of some of these schemes, particularly previous rounds of quantitative easing (money printing), has occurred alongside highs in American stock benchmarks.

What does tapering foreshadow? The Fed’s recent decision to reduce (taper) and eventually eliminate the current gigantic round of money printing warns that a notable top is or relatively soon will be in place. Thus the mid-January 2014 high point in the S+P 500 arguably represents an important top. If a stock marketplace peak is not currently in place, one probably will be by around the end of first quarter 2014. Several other indicators likewise portend a plateau in the S+P 500. Fed tapering, to the extent it coincides with at least a modest decline in the S+P 500 and related indices, will hint that economic growth in America, other advanced nations, and developing and emerging countries will be less than predicted by guardians such as the International Monetary Fund.
Chart--S+P-500-(2-3-14,-for-essay-US-Stocks--Shadows-and-Signals)

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US Stocks- Shadows and Signals (2-3-14)
Chart- S+P 500 (2-3-14, for essay US Stocks- Shadows and Signals)