Weekly Indicators for February 10 - 14 at XE.com

 - by New Deal democrat

My Weekly Indicators column is up at XE.com.

Weakness continues, but - maybe - Here Comes the Sun.

International Week in Review: Central Banks Take Center Stage Edition

This is up over at XE.com

Agricultural ETF Jumps

Since the beginning of February, the agricultural ETF has jumped a little over a point, or nearly 5% in percentage terms.  Prices are now about the 200 day EMA.

Diminished rainfall in Brazil is leading to price spikes in coffee and soy beans.

February 2014 may show the lowest YoY inflation rate in 50 years (ex-Great Recession)

 -by New Deal democrat

The loosening of the Oil choke collar this winter appears to be leading to the lowest YoY inflation rate in 50 years outside of the Great Recession.  I have the details up over at XE.com.

GM: "We're still not serious about hybrids"

  - by New Deal democrat

David Atkins over at Digby's blog is upset at a YouTube commercial for a new luxury car, in which the actor portraying the owner spouts a river of entitled 1%er bile..  Atkins has since corrected the error, but he  originally misidentified the ad twice as for a Chrysler, which is important from my point of view.

You see, the ad isn't for a Chrysler at all.  It's for the new Cadillac ELR, a luxury hybrid that Hybrid Cars says is 

a $76,000-plus compact coupe that offers nothing more than the Volt except ride, luxury, image and style.

That David didn't even know it was a Cadillac isn't surprising, since the ad copy (which he helpfully reproduces below the video) never once mentions the car's brand, or the fact that it is a bybrid.

And GM's ad agency, if they read David's post, would probably be doing high-5's. The entire point of the ad is that this guy is a total a*****e who thinks nothing of dropping $80,000 on a toy that he can't even be bothered to name, let alone describe.

In fact, he's their target buyer.  Cadillac only sold 24 of the ELR's in its first month.  According to Hybrid Cars,

Judging by the fictional ELR owner’s bold-as-brass attitude, and GM’s own prediction that it will not sell a lot of its new ELR, the automaker might be interpreted as saying it is just fine with the state of affairs.

And that's a shame, not just for the egregiously offensive political view that is promoted, but because of what the above says about GM's commitment to hybrids and other alternately fueled vehicles.

As Edmund's test drive concluded:

And at the end of the day it's not that quick, not that engaging to drive. Cadillac would like us to think of the ELR as a 6 Series or Tesla Model S competitor instead of a hyper-expensive Volt, but that's how it drives, for the most part.

The 2014 Cadillac ELR is stunningly beautiful from most angles. Photos truly do not do it justice. In the end, though, the 2014 Cadillac ELR displays far more show than go.

While Toyota was busy turning itself into your father's Oldsmobile, GM, especially via the Cadillac CTS and Buick LaCrosse, was turning out some state of the art styling, and with the aforesaid CTS, finally hit a home run with the kind of car they once described as a "little limousine."

But that aforesaid CTS has disappeared from the lineup, replaced with a model carrying the same badge but really a continuation of the old STS midsize.

GM could have priced the ELR at $50,000 and sold many 10,000's of the model to luxury car drivers who actually care about fuel economy, not to mention the environment, and shown that it was the carmaker to beat in the luxury hybrid niche.  Instead they have made crystal clear that the ELR is just an expensive bauble for collectors, which will undoubtedly disappear from the lineup after two or three years and sales of a few thousand. It is content to let Toyota/Lexus own the segment from the low end, and for Tesla to own it from the high end.

So the ad isn't just offensive politically.  It shows that economically GM still isn't ready to do what it needs to do not to be a dinosaur.

Yellen to Use Broader Employment Measures For Fed Decisions

This is up over at XE.com.

US Market Update; Look For Small Correction Over the Next Few Days

The QQQs (top chart) have had one heck of a strong run.  They've been rallying since February 5 and have rallied from 83.7 to 89.  But prices have hit resistance at levels from late January and the MACD is starting to decline.

In contrast, we have the DIAs (top chart) and IWMs (bottom chart).  Both have rallied over the same time period, but not as strongly and both are also hitting resistance areas.

We've had some strong upward movement over the last five days.  At the same time, we're seeing prices hit resistance on a number of fronts.  The cat is out of the bag on Yellen; she'll continue the easy money policies if Bernanke.   And considering she's using a broader measure of unemployment, we can expect a longer period of lower rates.   But over the next few days, we'll hear more of the same with added political grandstanding. 

 

OECD LEIs Point to Developed/Emerging Market Growth Divergence

This is up over at XE.com

Oil At Important Resistance Levels

After last year's traditional summer price rally (when oil traded between 102/104 and 110/112),, prices retreated to trade between the lower 90s and 100.  Now prices are again looking to breach the 100 level.  Should they do so, they face little upside resistance until the 110 level.

Vietnam ETF Consolidating Recent Gains

The Vietnamese ETF has bucked the trend of emerging market sell offs of late.  Prices started rallying in early September.  They consolidated gains at the end of last year between the 18.5-19 price level then rallied strongly in January, moving through resistance in the upper 20s.  Notice the big volume in-flow.  Prices are now consolidating in a triangle pattern between 20.3 and 22.2.