High Heeled Traders

Cause for Pause

December 5, 2016

We had a busy week last week following the news about OPEC finally making their production quotas, which has been simmering for months. I’m trying to see what to look forward to — and yes, finally we are kicking in the last month of the year and heading into the much-awaited US Fed rate-setting meeting, I can’t say people are excited for it, but it has been well-publicized how this interest rate must happen already. The actual rate-setting meeting is next week but we are going to see some more data coming out and some Fed personalities talking about what should happen.

For new followers of this blog, the Economic Calendar of Bloomberg is a great help and here is a link:

So it appears nothing much happening in US soil, but looking out of it, there is cause for pause with the recent referendum in Italy and presidential election in Austria, both of which can hold clues to the European Union remaining a union. Italy voted “No” which observers say is espoused by people wanting to get back to their own currency and we will see another country out the door, destabilizing the EU block. Article here the “yes” defeat in the referendum is now translating to the PM himself resigning. So with this drama going on, it will be a cause for pause from the recent upward trends, yes even in the US stocks (and may give a good opportunity for people waiting to get on the trend with lesser risk)

Austria however, voted for a pro-European leader, so the EU hopes remain alive. However, as long as people are not seeing their lives improve under the EU arrangement, there is always that possibility of more good byes in the EU. So we will see about the next post, we will assume some sort of “Brexit”-style meltdown might happen. If it does, be ready for 3 things :

1. Buy defensive stocks that won’t get out of business with something like “Quitaly”
2. Buy stocks that have gotten too expensive but you want to own (maybe those banking stocks that rallied strongly could be affected by this EU-induced selloff)
3. Keep investment that is only within your risk.

First Brexit, Now “Quitaly”

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