Jim Bianco was on Bloomberg TV on "Taking Stock" talking about the US dollar. Bianco also discussed Federal Reserve monetary policy, US stocks and corporate earnings. Bianco makes a few points on monetary policy that I made, namely that the stock market doesn’t look so hot on a non-dollar denominated basis because, while stocks are rising the US dollar is falling. The perception is that the Fed is printing dollars and this increases the risk-on trade.
Let’s see what the jobs number looks like because the ADP number was weak. Bianco thinks that the skew is to the downside regarding market reaction because QE is baked into assumptions irrespective of what the jobs number is. If the number is positive, however, this would be negative for stocks as it would put a cloud over how much QE would be coming. But Ian Shepherdson was also on Bloomberg saying he thinks the jobs number will be "terrible."
Bottom line: Liquidity is seeking return.
What about Gold?
Earlier today, I mentioned David Rosenberg’s comments about gold being overbought. Dennis Gartman is a gold bull but also seems to think gold is long overdue for a correction.
Gartman, who writes the Gartman Letter, was on Tom Keene’s Bloomberg TV show "Surveillance Midday" talking about his investment strategy in gold (which he buys in euros and sterling) and the Swiss franc. He also discussed the outlook for US employment. Note that his comments about bank regulators being a brake on lending don’t mesh with what Sheila Bair told Bloomberg. This seems like the kind of nonsensical and ideological ‘get the regulators out of the way’ statement you expect to hear from lobbyists for the financial services sector. Banks lend when there are credit-worthy borrowers. Full stop.