“…the Russell 2000 and Mid Cap 400 ratios against the S&P 500 could be breaking support dating back a decade…The last time the Small Cap/500 ratio broke down after breaking a four-year support occurred in 2007.” – Chris Kimble posted at…
http://www.advisorperspectives.com/dshort/guest/Chris-Kimble-140801-Joe-Friday.php
TAPERING IS NOT TIGHTENING…OH WAIT; YES IT IS (StreetTalkLive)
“What the Federal Reserve did accomplish with trillions of dollars of bond purchases was to enable the deficit spending cycle of the Federal Government. Therefore, the reduction, and eventual extinction, of the current QE program combined with an eventual increase in the overnight lending rate will reduce the excess liquidity that is current flooding the markets. In other words, tapering IS tightening of monetary policy…when the previous QE programs ended, so did the run in the markets. Currently, with $35 billion per month still being infused into the financial system, stocks are continuing to push higher. This will likely change over the next couple of months particularly as the correlations between the Fed's actions and the stock market continues.” – Lance Roberts. Commentary analysis and charts at…
http://streettalklive.com/index.php/blog.html?id=2322
The rule of three says the market declines after 3-tigthenings.
HUSSMAN – INCREASING DIVERGENCES (Hussman Funds)
“Remember how these things unwound after 1929…1972, 1987,
2000 and 2007 – all market peaks that uniquely shared the same extreme
overvalued, overbought, overbullish syndromes that have been sustained even
longer in the present half-cycle. These speculative episodes don’t unwind
slowly once risk perceptions change. The shift in risk perceptions is often
accompanied by deteriorating market internals and widening credit spreads
slightly before the major indices are in full retreat, but not always… The key
point is this: after an extended and extreme compression of risk premiums,
we’re now observing increasing divergences across a variety of market internals
and security types (e.g. breadth, leadership, momentum stocks, small caps, junk
bonds).” – John Hussman, PhD. Weekly
Market Commentary from Hussman Funds at…
http://www.hussmanfunds.com/wmc/wmc140804.htmFLORIDA HEALTH INSURANCE COSTS UP 18% (Global Economic Advisors)
“Florida Blue, the state’s largest health insurer, is increasing premiums by an average of 17.6 percent for its Affordable Care Act exchange plans next year, company officials say….Critics of the health law have predicted big rate hikes in the second year of the online marketplaces…Several factors related to the health law are driving up rates for next year, Geraghty [Florida Blue CEO ] said, including a paucity of younger and healthy enrollees and a greater-than-expected surge of people seeking expensive health services. The law prohibits insurers from rejecting people with health problems or charging them higher premiums. That meant that many unhealthy people who had not been able to get coverage before were able to obtain policies in 2014.” Story at…http://globaleconomicanalysis.blogspot.com/2014/08/florida-obamacare-blues.html
This increase tends to sap more money from the economy. Add in stubbornly high gas prices and it’s a wonder the economy is doing as well as it is.
ACA FORCES CONTRACTING OF SUBSTITUTE TEACHERS (Virginian Pilot
Online)
An increasing number of school divisions around the
country are turning to private companies to find substitute teachers, citing
the Affordable Care Act as a primary reason…The reason to outsource stems
partly from added costs associated with the health care law mandating that all
entities provide benefits to employees who regularly work at least 30 hours a
week. “It’s a whole new ballgame with the Affordable Care Act,” said Harry
Murphy, a 16-year member of the Chesapeake School Board.” Story at…http://hamptonroads.com/2014/08/affordable-care-act-spurs-substitute-outsourcing
MARKET REPORT
I'll post the today's Market Report and Analysis after the close.
