Daily Top Ten – January 13, 2017

1.Measuring Europe Thru German Leadership.

German economic growth accelerated more than analysts forecast last year to its fastest pace since 2011,

as falling unemployment and record-low interest rates boosted spending. According to the Federal Statistics Office, GDP growth rose 1.9%, after a gain of 1.7% the previous year. Germany is the first of the world’s biggest developed economies to provide preliminary GDP data for 2016.
www.seekingalpha.com

German DAX-Sideways then Breakout….7% Spike 2017

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Daily Top Ten – January 12, 2017

1.Nasdaq 269% Off Bottom.

Chart of the Day

For some perspective on the post-financial crisis rally, today’s chart illustrates how much of the downturn that occurred as a result of the financial crisis has been retraced by each of the five major stock market indexes. For example, the Dow peaked at 14,164.53 back in October 9, 2007 and troughed at 6,547.05 back on March 9, 2009. The most recent close for the Dow is 19,855.53 — it has retraced 174.7% of its financial crisis bear market decline. As today’s chart illustrates, each of these five major stock market indices have retraced over 170% of their financial crisis decline. However, it is the tech-laden Nasdaq that leads the pack with a retracement of 269% — impressive considering the severity of the financial crisis bear market.

http://www.chartoftheday.com/20170111.htm?H

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Daily Top Ten – January 11, 2017

1. Gundlach Deck is Out…10 Year Taking Out 3% in 2017—End of 35 Year Bond Bull?

“Almost for sure we’re going to take out 3% on the 10-year in 2017,” Gundlach said. If we exceed 3% (not 2.6%) in 2017, it’s goodbye to the bull market because you would no longer have declining peaks in yields.

A 10-year above 3%, with the 30-year yield approaching 4%, would also be trouble for the equity market because they would start to look like ‘real’ yields to investors.

Gundlach said it’s not radical to forecast a 6% yield on the 10-year by 2020.

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http://www.businessinsider.com/jeff-gundlach-webcast-2017-outlook-just-markets-2017-1

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Daily Top Ten – January 9, 2017

1.China’s Reserves have Fallen by About $1Trillion

China is making it harder to short the Yuan and more difficult to take money out of the country, but time will tell if they can protect the currency forever. …If not, a free floating Yuan will be a new ball game for all currencies.http://www.barrons.com/articles/the-growing-threat-to-global-trade-a-currency-war-1483767171

 Longer-Term Look

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Daily Top Ten – January 5, 2017

1.Yield Curve Steepening and Showing No Signs of Recession.

 

 The Yield Curve Reflects Good News

I find more reason for optimism in the yield curve – the plot of the yields on 3-month through 30-year Treasury securities. The yield curve has steepened since the election, and this is good news.

The slope of the yield curve has borne a consistent relationship with economic activity. The yield curve has predicted all U.S. recessions except one since 1950. Recessions, as you would expect, correlate positively with bear markets. When the yield curve flattens, or inverts, a recession usually looms and so does a bear market.

That’s not the case today. The yield curve is just the way we should like it – progressively higher with each maturity and upward sloping to the right. When the yield curve steepens, economic growth usually follows.

Yield Curve Slope

http://etfdailynews.com/2017/01/04/dow-20k-is-just-the-beginning-of-a-massive-rally-in-2017/

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