Wednesday, April 12, 2017

4/07/17 Economic Activity Composite #EAC #Free

EAC
The majority believes the Fed is the controller or maestro financial and economic world. While history shows us (over and over) that its not, the majority stands by this belief until failed expectations driven by the invisible hand inflicts losses and pain or 'teaches' the incoming generations. This seemingly perpetual cycle of failed expectations and substantial losses, a byproduct of failed economic theories and lousy education, is big reason why the public remains a consistent loser and bagholder of trend transitions in the investment world.



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The Fed's decision to republish Moody's corporate bond yields returns the EAC to it's old trend. Moody's corporate bond yields are very important to the forecasting the future direction of the US and global economy.

The EAC transitioned from contraction to expansion in December 2016 (chart). Stocks, commodities, and the US dollar are rallying, while bonds are falling. While marginal economic activity influences these trends to varying degrees, it's not the sole driving factor. Investors will come to realize that international capital flows and confidence is playing and will play a large role during the next crisis.

Chart


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.