Now that the markets have gotten what they wanted: a relatively clear sign that the E.U. would pledge to print money to cover the banks holding the enormously stupid amount of sovereign debt of bankrupt Euro-zone countries, capital came off the sidelines and markets the world over higher. It started in Asia where the Nikkei 225 (AMEX:NKY) closed above 900 for the first time in 3 weeks. The Hang Seng was up more than 400 points to close at 19441.50.
And the U.S. Dollar (AMEX:UUP) index was off more than a full point on the day. To this commentator’s eye, this looks like another inflection point day. I would be expecting loose monetary policy by the Fed over the next few months, though you would never get them to admit it. Watch what the markets do, not what the Fed says.
In Singapore, both in response to the idiocy in Europe and the lack of idiocy on the part of the U.S. State Dept., the Straits Times Index closed up 1.1% at 2878.45. I’m going to beat you people over the head with the Singapore index in the coming months because this will be the place where money will be made for those with the stones to break with their U.S./E.U. centered Stockholm Syndrome. If not directly in the stocks, which many are paying north of 4% in dividends, then the corporate bonds of their best companies.
Lastly, the KLCI Bursa Malaysia Index closed just shy of 1600 which is proving to be solid resistance in the short term. Given the extremely bullish close for this week/month/quarter/half of 2012, I would say an index with such strong fundamentals will not be held back by a 2 month old double top for very long. Watch the Malaysian Ringgit as well versus the U.S. Dollar. I would expect in any loosening of Fed monetary policy will send that back to 3.00 pretty quickly.
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