POSITIVE INDICATOR: for seven months later many people who vacillate see drop in commodity and energy prices, the rising value of the dollar and a fall in the price in the Chinese stock market, indicating weakening global growth. However, what is believed to be those who despair that samasekali is not true. Many positive indicators to more than offset the signals weaken morale. The photo shows the housing adjacent to the Shell Oil Refinery facilities in Carson, California.
The stock exchange is not serene, a drop in commodity prices, and a rise in speculative bonds yield results, we know many as signs of economic weakness. However, what is believed to be those who despair that's absolutely not true. Many positive indicators to more than offset the signals that undermine the spirit of it.
We are entering the seventh year of the market are increasing rapidly. For seven months the market is indeed walking sideways. The slumping energy prices and the rising value of the dollar has moved to the forefront lately by the fall in prices in China's stock exchanges, commodities and debt yield high results in the last three months. An investor may be feeling surprised, if the game was already over, or could this be only the seventh stage was entering?
If the fall in the price be the size, the investment appears to be deteriorating landscapes possible. Commodity and oil being the main driving force of global economic growth, and prices are down does not usually indicate rising demand.
Although Beijing claims to be its economy to grow around 7%, the decline of its stock exchanges seems to have confirmed reports from United Technologies, Illinois Tool Works, International Business Machines and Caterpillar that sales to China by companies it declined. In addition to the negative picture of it, is a statement of the Department of Commerce that exports to China were down 6.1% on the basis of yearly (y-o-y) until May.
The fall in the price of bonds yield high results indicate the rising rate of speculative bonds--prices and yield move results in the opposite direction. Meanwhile, the spread (difference) between the debt yield-high yield and Treasury bonds (U.S. Monetary Department) that without the risk increases. This shows that investors want more interest income from speculative bonds and many in the sector of Treasury bonds that lowered the results yield government bonds. If you only consider the stock price of China, oil, commodities and debt spreads over three months or years, people may be concluded: it was a game. Whereas, at the same time, Amazon, Visa and United Parcel Services, all of which reported revenue that was much better than expected.
Provide essential knowledge
These three companies that provide important knowledge about the health of the us consumer to reach 70% of US GDP. The median U.S. home price has just reached a new high level above the previous peak in June 2006. Main indicators and orders durable goods turned out much better than expected. Us jobless claims reached the lowest level since 1973. GDP growth in the second quarter, up 2.3% from 0.6% in the first quarter.
There is a way to reconcile the differences between the slum global growth with the indication of the signal that the domestic economy showed improvement, namely:
In the seven months through April, the Chinese stock exchange, i Shares MSCI China (MCHI), up about 44%. whether this indicates a fundamental strength in China? Likely not. More speculative fever again, moving its increase. Closeout Sales, so it produces seems to be more to the correction relating to the speculators, not with the basic fundamentals.
Oil prices may be down because of industry supply considerations rather than the issue of global demand. Due to spiralling global supply due to the rising of the North American production, the world awash in oil. World oil demand is down from a high level recently 93,79 million barrels per day in the fourth quarter of 2014, says the International Energy Agency (IEA). But the drop in demand is relatively moderate and not to cause turmoil.
The commodity is vulnerable and sensitive to changes in demand/supply margins. The decline in commodities now has no effect to the countries of the major economies in the world going forward. Japan, the United States and the euro zone Purchasing Managers Index had turned out (PMI) rising--which means over the position size 50.
Debt yield spreads high yield-increasing, but from a depressed level and still relatively low level of the average long-term historic.
That's why the u.s. economy should continue to grow in the second half of 2015 https://www.mql5.com/en/signals/120434#!tab=history
