GBR Market Wrap: More Signs of the New Normal

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In this Week’s Issue: Sept. 2, 2011

Weekly Snapshot

• Investors rushed into safe-haven Treasuries again; 10-year yield near 2% (WSJ)
• 2-year Greek government bond yields rose above 47% on Friday (Bloomberg)
• U.S. nonfarm payrolls were unchanged in August, unemployment rate held at 9.1% (BLS)
• Brazil’s GDP growth slows 0.8% in 2nd quarter as boom fades (Reuters)
• Brazil unexpectedly slashed its key interest rate to 12% from 12.5% (Reuters)
• Euro area unemployment rate remained unchanged at 10.0% in July 2011 (Eurostat)
• Eurozone inflation remained unchanged at an annualized 2.5% in August (Eurostat)
• China widens reserve ratio for banks to limit inflation (Bloomberg)
• U.S. home prices increased by 3.6% in the second quarter of 2011 (Standard&Poor’s)
• U.S. consumer confidence slumped to 44.5, the weakest since April 2009 (Bloomberg)

Market Barometers

stock market barometer-2011-09-02

fx barometer-2011-0902

Weekly Chart

The employment picture continues to be a major drag for the prospects of a sustainable economic recovery.  The chart below shows a particularly concerning element of the jobs picture: The long-term unemployed (red line).

Duration Unemployment

More Signs of the New Normal

In view of the upcoming U.S. Labor Day, we’ll keep things a bit on the lighter side this week.  No commentary, just a selection of charts indicating the “new normal.” Enjoy!

Ultra-low Rates

TNX

Higher Volatility

Volatility Index

Sideways Markets

SPX

A Weakening Dollar

USD

End of Debt Super Cycle?

10-year cycle

Best wishes for a happy Labor Day week-end!


Clemens Kownatzki, MBA is an adjunct professor of financial risk management at the Graziadio School of Business and Management, as well as the founder and CEO of FX Investment Strategies, a Registered Investment Advisor. In addition to running his investment advisory firm, he is a contributing author at SeekingAlpha.com and BusinessInsider.com. He also authored the book, Money Music 101, available on Amazon and Kindle, in addition to publishing the popular investment blog www.fxinvestmentstrategies.com along with a weekly newsletter.Disclaimer

Neither the information nor any opinion contained in this communication constitutes a solicitation or offer by us to buy or to sell any securities, futures, options or other financial instruments or to provide any investment advice or service. Each decision by you to do any investment transactions and each decision whether a particular investment is appropriate or proper for you is an independent decision to be taken by you. In no event should the content of this communication be construed as an express or an implied promise, guarantee or implication by or from us that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. Please note that there is no requirement and no commitment to make any payments to FX Investment Strategies LLC in order to access our published information be it via email or via website publication. All information is publicly available without any required monetary consideration. Any payments or donations made by you are deemed to be voluntary and cannot be considered as payments for investment advice given to you.

Ultra-low Rates
Author of the article
Clemens Kownatzki, MBA
Clemens Kownatzki, MBA
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