Mike Zigmont, author of the Zigmont Report, is a partner at New York-based Harvest Volatility Management, a hedge fund with over $10B AUM, offering volatility management solutions to its investor base worldwide. Mike has been publishing his daily newsletter (Monday-Friday) privately for the firm’s investors and his personal contacts in the investment business since 2008, sending shortly after the market close.
The opinions expressed below are my own
New month, old story. Equities rallied small today during a very quiet session on normal volume. Capital flow for the day was 99%. Summer trading continues to benefit the bulls and nothing in the headlines can rattle sentiment. The data of note ahead will be the July labor numbers. Tomorrow we’ll get July ADP (190k est vs 158k prior) and Friday we’ll learn July NFP (180k est vs 222k prior). It’s doubtful we’ll be meaningfully surprised by either.
There are two central banks announcing this week as well but don’t expect fireworks. The Reserve Bank of Australia announces tonight (rate drop expected) and the Bank of England announces on Thursday (no changes expected).
It’s a central bank driven world so if those central banks surprise, we will see volatility. It seems as though central banks are all on board with not surprising anyone however. Whether that’s a good or a bad thing is uncertain. All that matters, for the moment, is that central banks do not appear to be a source of volatility. They are incredibly important global actors but they are fully aligned with bullish interests presently.
When they eventually change course, it’ll be a doozy of a day for global markets but that day doesn’t seem to be on the horizon.
See you tomorrow,