Last week ended very gloomily for markets. This week, thanks to the Catalans, will start the same way. Investors are focused on Europe, with a sense of foreboding, and the U.S. Brits are getting excited about the Olympics, and worried about how to get to work. …
—Kit Juckes, Société Générale, Barcelona, 22 July 2012, 3:40 p.m.
“The markets are dead.” “The market is dead.” “It’s summer.” “August will be even quieter.”
All of these jewels were said to me last week. All, by individuals who are unable to extract correlated and less-correlated movement and then suggest forward-looking belief from the grinding of equities, bonds, currencies and commodities.
And they are grinding. (Grinding I define as the grudging battle between a paired bid and ask that moves the vector of the series in a persistent direction. Plotted semi-log, a grinding series shows an approaching-zero curve, or convexity.)
Granted, select items (EUR-JPY, to intervene a moment) have log convexity, but for the most part a given media data check involves Juckes’s “gloomily foreboding” with a dash of pre-August boredom.
I suggest data checks that attempt to link Spanish travail to Teutonic intransigence to American belief in cash flow.
The antidote to lethargy might include Bloomberg Surveillance 4-market data that attempts to greet the morning less dead and non-August.
I commend a cross-asset, edge-of-correlated attitude. Avoid the torpor of Grind. Listen to a Sara Eisen data check. Discuss.