TRADER ALERT: IMF Cuts Global Growth, Sees 2013 European Recession. Dollar Signals Market Topping Out. Firms Need $5 trln A Year To Meet Market Hopes. China Just Narrowly Averts Credit Bubble Pop. And Investor “Cash Allocations Fell To The Lowest Level Since February 2011
January 23rd, 2013
IMF Cuts Global Growth, Sees 2013 European Recession
As with every piece of potentially bad news in the here and now, the IMF provides some bone for bulls to gnaw on by offering hope that 2014 will be considerably better. What at first glance is a broad-based slashing of global growth outlooks for 2013 ends up being yet another hockey-stick expectation dangled out in front of the world’s investors. With Europe now downgraded to a recession in 2013 (GDP -0.2%), we should not fear though as Olivier Blanchard adds that “If crisis risks do not materialize and financial conditions continue to improve, global growth could be stronger than projected,” and sure enough 2014 is expected to herald a new era of growthiness (GDP +1.0%) for the troubled region. He does offer one note of reality that is critical – “Financial market optimism should not lead to policy complacency” – alas we fear that time has long gone. World Trade Volume expectations have been ratcheted lower with Brazil and Newly Industrialized Asia seeing the biggest downgrades to growth.
Have no fear for what is weak in 2013 will come surging back in 2014…
Spanish Q4 GDP Declines At Fastest Pace Since 2009
Dollar Signals Market Topping Out
It’s unclear what’s causing the move, but the dollar just spiked, causing the euro, gold, and stocks, and oil to drop.
A trader told us that the dollar is just catching a bid, given the fact that it’s been getting beaten up a lot lately. Meanwhile, other markets (like stocks) are increasingly looking like they are topping out.