Brazil's Disappointing Equity Market

By Emerging Money: By Tim Seymour Part of Brazil’s growth dynamic is rooted in the record low interest rates that have resulted from a combination of aggressive Central Bank policy and global growth factors. Brazil has never seen more constructive domestic macro conditions: Record low rates, mild inflation, 5.5% unemployment and a government that is attempting to fix massive bottlenecks in the economy.

It’s a knee-jerk reaction. There are still ultra-low interest rates, which will support gold Gold dropped to a four-month low in London and headed for the longest run of weekly losses since 2004 after Federal Reserve minutes showed policy makers may end their $85 billion monthly bond purchases this year. Silver declined to the lowest since August.

Gary Townsend submits:This morning: After fair value adjustment, equity futures are lower this morning, after a disappointing November employment report. Notwithstanding the past two day’s advances, markets remain in correction.

What a difference a few data points can make. A few trading sessions ago, the market was following a “global goldilocks” narrative:

Countries from Brazil to the Philippines are pouring into the bond market, taking advantage of soaring investor demand to sell debt at record-low interest rates.

Countries from Brazil to the Philippines are pouring into the bond market, taking advantage of soaring investor demand to sell debt at record-low interest rates.

By Zachary Scheidt: What a difference a few data points can make. A few trading sessions ago, the market was following a “global goldilocks” narrative:

The headline real GDP number of 2.8% does not sound too bad until you dig beneath the surface. A full 1.9 percentages points of that 2.8% was inventory replenishment. Real GDP vs. a year ago is +1.6% and that is on a recession track as well. Five-Year Treasury Yield Hits Record Low Bloomberg reports Treasury Five-Year Yield Declines to Record Low as GDP Misses Forecast