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Eurozone Crisis Moving Back Onto The Front-Burner?

  • Written by Syndicated Publisher No Comments Comments
    November 6, 2013

    European markets are nervous this morning after the European Commission cut its forecast for economic growth in the euro zone yesterday, with some discouraging comments.

    It said growth in Europe is going to remain subdued, with risks and uncertainty elevated.

    For this year, the EC still expects the eurozone economy to decline a recessionary 0.4%, with unemployment at 12.2%, both unchanged from the May forecast.

    And it cut its recovery expectations for next year, now expecting GDP growth for full year 2014 of only 1.1%, and raised its forecast for unemployment, expecting it to remain at 12.2%.

    In its comments it said, “In recent months, the composition of global economic growth has shifted, and the external environment for the EU economy has become more challenging. Growth in some key emerging-market economies has slowed down: triggered by the anticipation of less-expansive monetary policies in the U.S. Structural weaknesses have surfaced and financial-market volatility has ensued.”

    Has correction begun?

    For two weeks we’ve been warning non-subscribers as well as subscribers to expect at least a short-term pullback.

    Has it begun? If it has, will short-term support hold this time?

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    Does the Fed finally realize Bernanke’s ‘transparency’  has been a problem?

    I’ve been complaining for a few years that the Fed’s changed policy under chairman Bernanke, of making its inner workings and debates available publicly, his so-called transparency policy, has caused more market turmoil, not less.

    And yesterday at a conference in San Francisco, Fed Governor Jerome Powell said in the future the Fed will try to send as clear a signal as possible on a timetable for scaling back its bond purchases, in an effort to prevent another sharp market adjustment.

    But isn’t that what it’s been trying to do? But each time it hints at a timetable, it subsequently changes its signal, either because it panics at the market’s reaction, or because conditions change.

    Why could we expect that to be any different in the future? Conditions do change.

    Non-Subscribers: We have updated the sample newsletter to a later issue you might find interesting. To see it click on ‘Sample newsletter’ in column to the right.

    To read my weekend newspaper column click here: It’s Still Too Early To Worry About The Fed Tapering

    Subscribers to Street Smart Report: There will be an in-depth Markets Update, including gold, tomorrow in your secure area of Street Smart Report.com 

    Images: Flickr (licence attribution)

    About The Author – Sy Harding, Street Smart Report

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 

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