The latest euro ‘fix’ could be bad news for the US – MoneyWeek

UScorporateprofitmarginsarealsoatrecordlevels。

That’sbadnews,becauseitmeansthattheonlywaytogrowprofitsistogrowsalestoo。

Therearen’tanymoregainstobehadfrom‘efficiencies’。

ButifChinaisslowing,andEuropeisinrecession,theopportunitiesforblockbustersalesgrowthseemthinontheground。

Inshort,theUSmarketlooksvulnerable。

You’dexpectinvestorstohavetakenallofthisonboardbynow。

Afterall,marketsaremeanttobeforward-lookingandefficient。

Sowhyhaven’tthey?

Thereareprobablytwomainreasons。

Firstly,withallthefearoverEurope,justaboutanywhereelseinthedevelopedworldhasacquiredasortof‘safe-haven’status。

USstockshaveprobablybenefitedfromthat。

Secondly,there’stheprospectofmoreQEintheUS。

Theweak‘non-farmpayrolls’figuresonFridaycheeredinvestorsnoend。

TheynowbelievethattheFederalReservehasalltheexcuseitneedstolaunchmoreQEthisweek。

Butwillit?

Itdoesn’tmatterwhetherQE3launchesornot

Theshortansweris:Idon’tknow,andnordoesanyoneelse。

MygutfeelingisthatQE3isfarfrombeingacertainty。

Thetimingispoliticallyawkward,andFedchiefBenBernankedoesn’tcommandthesameconsensusamonghistroopsashispredecessorAlanGreenspandid。

Themarketisfarfrombeinginthefull-blownpanicmodethatwesawonpreviousoccasionswhenBernankeprinted。

NowthattheECBismakinganeffortinEurope,itseemsharderforBernanketojustifymoreprintingintheStates。

Ontopofthat,howmuchgoodwouldQE3do?

Ifinvestorshaveanysenseatall,thereshouldbeabitofscepticismcreepinginaboutQE’sabilitytodoanythinghelpfulaboutthenon-farmpayrollfigures。

ButasI’vesaidbefore,itdoesn’tmatteronewayortheother。

IftheUSprintsmoremoney,it’llbegoodforcheapassetsaswellaspriceyUSstocks。

SoEuropeanshareswillbebuoyedtoo。

Itwouldalsobegoodforgold,whichyoushouldbehangingontoasportfolioinsurance。

Andifitdoesn’t–well,bettertobeinvestedincheapeurozonestocksthanexpensiveUSonesatthatpoint。

IntheabsenceofQE,disappointedUSinvestorsmightstarttowakeuptothefactthattheirmarketislookingalittlepricey,particularlyifApple’slatestiPhonedoesn’timpresssufficiently。

AsJohnDizardnotesinhisFTcolumn,asfearofaeuro-disasterrecedes,investmentstrategieswillchange。

“TherelativeweaknessofEuropeanassetscomparedtothoseintheUSwillreverseoverthenextcoupleofmonths。

”ThatadjustmentcouldjustaseasilycomethroughUSmarketsfalling,asthroughEuropeanonesrising。

SubscriberstoMoneyWeekmagazinecanreadabouthowtogainaccesstoEuropeanmarketshere。

Ifyourenotalreadyasubscriber,subscribetoMoneyWeekmagazine。



ThisarticleistakenfromthefreeinvestmentemailMoneyMorning。

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Themoneyprintinghasonlyjuststarted

Thankstothecentralbanksprintingpresses,precious-metalpricesaresoaring。

Butgold,inparticular,couldstillgoalothigher,saysBengtSaelensminde。

Hereshowyoucouldprofit。

Britainshousepricesareslowlysinking

AlotofpeoplestillbelievethatBritainshousingmarketistreadingwater。

Itsnot,saysMerrynSomersetWebb。

Housepriceshavebeensinkingforyears。

OnlyLondoniskeepingthemabovewater,andthatcouldbeabouttochange。

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