2023-12-08 Markets

Markets had another good week, buoyed by more news that indicated we are on the path to a gradual moderation of economic activity without falling into a recession. This maybe true in general, but it does not mean it’s uniformly true across the globe: the Eurozone, for example, seems a lot closer to a strong slowdown than the United States.

As we have noted before, some financial indicators are close to what technical analysts call major levels. Examples: the US and world stock markets, gold price (though last week’s recoil was also technically significant) and US 10 year government yields. I point this out not because I think much depends on it but because I know a lot of people do watch and believe in this type of analysis, and so you are bound to see it mentioned somewhere in the media. Beware what you do with it.
 
While it’s dangerous to make statements or form conclusions by looking at a single graph, there is nothing wrong if the same graph raises questions in your mind. Here’s what the cover picture (relating to the US) brings to my mind: what exactly do we mean by wanting to make the rich pay their fair share? 

[Sources: John Mauldin, ‘Thoughts from the Frontline’]