Commodities fall & the US gets more great economic data, it's a very tricky puzzle! The US FedReserve and BoE are expected to raise interest rates next year, while the ECB, Japan and China are all expected to inject fresh various degrees of stimulus into their respective economies. We are in a tricky set of unfolding economic circumstances, characterised by poor economic news being taken well by equities e.g. Last night USManufacturing data expanded, the fastest pace in three years, but the Dow fell 0.2%. US equities have rallied 87% since October 2011, aided by free money pouring into the system; this stimulus tap will soon be turned off - negative for equities. The S&P500 has not had a decent pullback for 3years. I remain confident we will see two 10% retracements in US equities in the next 12months, the question is identifying when and the levels to start buying. (VIEW LINK)


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James Marlay

Good read this morning Shawn - it feels like equities is becoming a game of chicken. How long can you stay in the fast lane before you need to step out of the way of interest rates.