After a sell off into the close Friday afternoon, the markets look set to pick up right where they left off. A couple of hours before the open, S&P futures are off twelve handles, and the euro is breaking support levels. It looks like a very interesting start to an important trading week.
MIKE KONCZAL writes that 2013 is shaping up to be a grand experiment, testing an important macroeconomic proposition: that expansionary monetary policy can offset fiscal cuts. In the second half of last year, the Federal Reserve began shifting its policy framework to provide more accommodation to the American economy. And from the beginning of this year, the pace of fiscal consolidation has quickened.
On Friday, the government said that just 88,000 jobs were created in March, a number that came in well below expectations. And yet the unemployment rate fell again, with big drops seen in some key demographics.
Jason Schwarz submits:The market is slowly beginning to react to the deceleration of economic data. The only market fundamental that could successful confront the worsening data would be valuation. If declining economic conditions were already priced into stocks, then we would see a flat market until the data started to improve. This is the best case scenario.
Submitted by F.F. Wiley of Cyniconomics Step Right Up And Test Your Central Banking Skills Against The Scariest Economy Of All I offer a chance to test yourself as King of the World. By that, I mean top dog at the Federal Reserve Bank.