“I wouldn’t say the experience was totally wasted. I think we have an excellent change of actually catching a ghost and holding it indefinitely.” (Egon)

Janine: Do you believe in UFOs, astral projections, mental telepathy, ESP, clairvoyance, spirit photography, telekinetic movement, full trance mediums, the Loch Ness monster and the theory of Atlantis?

Winston: Ah, if there's a steady paycheck in it, I'll believe anything you say.

Peter: To our first costumer.

Ray: To our FIRST and ONLY customer.

Peter: I'm gonna need to draw some petty cash. I should take her out to dinner. We don't wanna lose her.

Ray: Uhhh... this magnificent feast here represents the LAST of the petty cash.

Quotes from the movie: “Ghostbusters” by Ivan Reitman. 

The United States’ third trimester’s GDP was beyond all expectations. The USA’s economy is at 3,5%, over the 3,3% expected by the economists. From the quarterly earnings season we only hear good news. The 82% of companies have beaten the analysts estimates (against a 17% of negative surprises) whilst on the revenues front the number is less exciting. In about 40 sittings the Nasdaq lost the 13%, from the beginning of October the S&P500 has left on the ground over the 10%, entering the analysts’ so called “correction phase”.

Great macro results and company’s data, but the rating goes down. On the markets ghosts are floating around, as well as the fear of being at the end of an expansive business cycle, between the longest in history.

The signs are not to find in the numbers but in the major American companies manager’s forecast, who think that the fourth trimester’s growth rates will be lower that the third’s. We are not talking about recession but only about a slowing down of the growth rate. That’s the worst of all ghosts, because the reversal of the economic cycle always starts from here. Stocks, that quote at high multiples because of the expected strong growth rates, are anticipating this movements. Wall Street already renamed them the Fang, Facebook, Amazon, Netflix and Google. The results of these American’s colossus, that on their own count one third of the Nasdaq, are experiencing some ups and downs. Amazon and Google have been a disappointment, tomorrow Facebook is going to communicate its quarterly but the revenues’ anticipations didn’t please the markets; Netflix surprised on the upside but it’s not that relevant. We are also waiting for Apple’s results on Thursday.

Analyst usually are very realistic, they are interested in numbers and don’t believe in ghosts. Markets, on the contrary, always try to read something unwritten. From 2008, this October has been the worst for the markets. Operators are starting to think that, between the lines of the quotations, something intangible -in relation to numbers- is hiding behind this movement: the arrival of an economic slowdown. Apart from the tech industry, also the cyclical ones, as the automotive, are experiencing the same; after the fear of new tariffs they hit the bottom and never climbed up. Yesterday’s rumors that Beijing may be considering cutting the purchase tax from 10 to 5% for cars with a 1.6 liter capacity engine or less, have bounced the industry a little, but it’s just minor variations compared to the minimum for the period.

It’s not our place to decide if ghosts exists or not. The USA’s 10-year bond yield over 3.2% has awakened the fear of an inversion of the business cycle in the United States that could infect the rest of the world.

The high rates are causing more deaths on the market than the fear of a trade war, the European elections and the cold war-like tensions. The American’s income, in fact, is strictly related to the trend of the Stock Exchange, while the consumption, mostly on credit, refers to the interest rate. Information leaked in the past few days wants the Fed to reconsider its monetary policy projecting a further rise in rates this year and only two (instead of three) next year.

At the other side of the ocean, Mario Draghi is still supporting an “expansive monetary policy”. The president of the ECB explained that apart from the QE there are other tools that can support the economy, with more specific targets than in the past. He also confirmed the Eurozone’s growth estimates and pointed out that the background set is progressively slowing down.

Meanwhile, the rumors regarding the ECB’s introduction of new program of incentives for the banks (with the already tested method of the Ltro, Long term refinancing operation) and for the governments (with the operation Twist, the selling of shorter-term bonds and, at the same time, the purchase of longer-term bonds with the “profits”) are everyday more persistent. These too, to this day, look like new ghosts.

We still believe that the bond’s yield are, today, sexier than in the past and safe from the ghosts of an imminent recession. The problem is that it is much more difficult to kill a ghost than reality, and one reality is that the world carries on growing but at lower rates than in the past.