Observations on the Capital Markets – Week Ended August 8, 2014
Ukraine developments, more than economic news, seemed to drive the day-to-day pattern of market returns. Russia first massed troops on the border, prompting NATO to warn of imminent invasion risks, then sent them back to their barracks, keying Friday’s rally. The conflict is far from over.
Developments in Gaza (a brief cease-fire) and Iraq—where Obama (reluctantly, it seems) authorized airstrikes against ISIS, leaving both domestic hawks and doves feeling unsatisfied—also made the front page, while central banks in Europe, England, Japan, Australia, and India all left policy essentially unchanged—not front page news. The global composite Purchasing Managers Index (PMI) made a new 9-year high in July at 55.5 ‑ but with war risks high, no one paid much attention. Continue reading