A Time of Aggressive Nervousness
| Dear Ladies and Gentlemen
I somewhat do have the impression, we live in a time of aggressive nervousness, and I can not think much of it. I am fully aware that bad news sell and yet, we all deserve a break. This is why I decided to write only about positive things in today’s weekly. First of all, the sentiment of U.S. house building companies is skyrocketing. In October, the mood among home builders reached a new all-time high, rising from 83 to 85 points compared to September. The NAHB home construction index has never been higher at any time since the start of the survey in 1986. Housebuilding sentiment is good when interest rates are falling or when interest rates are staying on low levels for a long time. It can be seen as an indicator and usually runs ahead of a stock market trend. At least this was the case at the end of 1998 and in summer of 2005. The S&P 500 marked its high points one and a half and two and a half years later (September 2000 and October 2007). Following the corona-related economic slump in the second quarter, the U.S. economy grew strongly again in the third quarter. The gross domestic product grew by 33.1 per cent between July and September on an annualised basis, thus exceeding market expectations. Then we have seen last week’s Weekly Economic Index (WEI) rise to -3.8 per cent from -4% in the previous week. The recovery of the U.S. economy continues. As the WEI is scaled to the growth rate of the past four quarters, it is increasingly approaching the expected growth rate for the calendar year. Considering all Covid-19 implications, this is rather good. Looking at the largest economy in Europe, we see the German truck toll performance index remaining at a high-level. The decrease compared to February is now only marginal at 1.7%. The toll performance index is published with a delay of about one week and acts as an indicator for the development of industrial production. Germany’s industrial production developed positively in October. The reason for this is substantial demand from Asia. Last but not least, we have seen Bitcoin performing positively over the last few weeks, and this usually is a clear sign of risk-on mood among investors and speculators. Therefore, if Bitcoin continues to rise, it could well be a positive signal for stock markets. Ladies and Gentlemen, by the end of next week one uncertainty is most probably going to be gone. I hope we will receive the results from the U.S. presidential election next week and this again would be good news, no matter who would be elected, as there would be one short-term uncertainty out of the way. By the way and just for fun, I like looking at the quotes on: Now, next week I have a real treat for all of you. My old friend Claudio was able to interview a former head of state on and during the Covid-19 pandemic ‘s first wave and he allowed me to publish the interview in my next weekly. Please feel free to share your ideas and thoughts with me, but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li And now, Ladies and Gentlemen I wish you a great day and weekend. Yours truly, Stefan M. Kremeth Tel.: +423 237 26 60 |
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