In an interview at Yahoo Finance, San Francisco Fed President John Williams is asked if he thinks the US economy is in a Goldilocks state right now. He answers affirmative. “I want to see an economy that’s basically running like it is now, with four, to four and a three quarters unemployment, that’s really low on a historical basis. Good steady income growth and inflation around 2%.” It is not the content of his answer that is worrisome. It is the smell of complacency that is hanging in the air. History has shown that once more and more people are convinced that they have found the golden formula, things start getting wrong: policy makers get lazy, economists become less critical and investors start developing a greater appetite for risk. Goldilocks: remember that name.
Although it was not really a surprise, the naked truth of a Brexit made investors rethink their strategies. Stocks finished mixed yesterday on a day that began with the UK’s formal decision to leave the European Union. The S&P 500 ended up slightly higher (0.10%), while the Dow fell 0.2%. The NASDAQ gained 0.4%. Volatility was almost unchanged: the VIX lost 0.11 points and ended at 11.42 points. XIV made a small gain for the day (0.48%), while the UVXY recorded a small loss: -0.90%.
Danny Daredevil switched from XIV to UVXY at the beginning of the session and recorded a small positive result for the day. His RSS is at 349% and his result for the quarter stands at 11.40%, making it more and more likely that Danny will have a positive return at the end of this quarter that ends tomorrow. Danny is definitely saving the best for last after being in the red for twelve weeks and experiencing a negative result as low as 35% in that period. Adventurous Anny traded in her XIV ETNs for cash at the beginning of the day. Her RSS rose to almost 22%. Solid Suzy and Lazy Larry recorded a small gain on their XIV ETNs and are now at 12.12%.
No trading signal was given by any of our models at the end of yesterday’s session.
RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return
Tim is the organizer of a song festival for primary schools in which children sing songs on local subjects in the local dialect of Tim’s hometown. One of the subjects of the songs is the so called Railway Zone, a 185-acre area in the city center that used to be a forbidden town for almost one and a half century. The national railways used the area to repair trains and to store train parts. The Spoorzone, as it is called in Dutch, is now in the process of massive redevelopment. In the years to come, restaurants, the city’s library, small businesses and some 10,000 residents will move there.
The class that is to sing the song on the Spoorzone was given a tour of the area. In the picture below, the class is standing in front of the Hall of Fame, a center for urban culture, that houses an indoor skate park, which is one of the most spectacular in the Netherlands.