• Tag Archives Stock Market
  • Bill Blain: “Are We In A Bubble About To Burst, Or Are We Facing Massive Equity Upside?”

    Are We In A Bubble About To Burst, Or Are We Facing Massive Equity Upside?
    ‘A liberal is a conservative who has been arrested.’
    No surprises from the Fed last night. Unchanged rate talk and hints about reducing the balance sheet ‘relatively soon’. We can go figure what ‘relatively’ means when inflation picks up. The stock market soared and VIX tumbled to a record low. Was that a warning about complacency? Since the 2008 crisis we’ve been here many times before – worrying about signals the economy is strengthening when suddenly its dived weaker.
    But, those us with longer memories can recall when the US economy has turned dramatically stronger – and in 1994, (yes, I remember it well), when the Fed acted prematurely, spiked the recovery and triggered what we’d now call a massive Treasury market TanTrum. This time it feels very different. I suspect we are very much still on course towards normalisation – a new kind of new normal: low rates, low inflation and steady state low growth.
    Stuff to watch today: Dovish Fed boosts stocks (record Dow) and dollar crashes. Lots of corporate results to wonder and worry about! Stuff the think about: Deutsche Bank results show it’s taken yet another thumping – difficult to see how it plays catch up and regains market relevance when it’s still swinging the headcount axe. Where is the US economy when inflation remains so low? What are the risks to Europe of the low dollar?

    This post was published at Zero Hedge on Jul 27, 2017.


  • Gold Price Jumps in Dollars as ‘Low-Rate Yellen’ Gets Trump’s Backing

    Gold price gains continued for Dollar investors on Thursday but held flat for other traders as the US currency touched its lowest Euro value since January 2015 following yesterday’s “no change” decision from the Federal Reserve.
    “The actual path of the federal funds rate will depend on the economic outlook as informed by incoming data,” said the Fed’s July statement, seemingly delaying a move to start reducingits $4.6 trillion holdings of QE-bought Treasury and mortgage-backed bonds.
    Asian stock markets rose – as did most commodities and major government bond prices – but European equities then slipped as the Dollar bounced from its new 30-month lows versus the 19-nation single currency.
    Gold priced in Dollars today set its highest London benchmarking since 14 June at $1262 per ounce.
    But priced in Euros, gold fixed at only a 3-session high. The UK gold price in Pounds per ounce reached only a 2-session high.
    Thursday morning’s Dollar price stood 2.0% above the 2017 average to date.

    This post was published at FinancialSense on 07/27/2017.


  • World Stock Markets, Gold, Boosted By Dovish FOMC Statement Wed. PM

    (Kitco News) – Global stock markets were mostly firmer overnight in the wake of a U. S. Federal Reserve meeting that produced a statement most of the markets deemed as leaning to the dovish side of U. S. monetary policy. Recent corporate earnings reports have also been mostly upbeat. U. S. stock indexes are pointed toward higher and record high openings when the New York day session begins.
    Gold is posting solid gains Thursday in the wake of the dovish Fed statement that pushed the U. S. dollar index to a 13-month low. Reports overnight said India is moving to make ‘paper’ gold (such as sovereign gold bonds) more attractive to its domestic investors, in order to reduce demand for actual gold bullion.

    This post was published at Wall Street Examiner on July 27, 2017.


  • ‘Junk Equity’ Comes to Haunt $30-billion Startup

    Snap Inc. tried to turn Big Investors into zombies. It didn’t work. Snap Inc., the parent of Snapchat, was dealt another blow today. FTSE Russell, which owns numerous indices for stock markets around the world, including the US Russell 3000, 2000, and 1000 indices, said today that it would exclude Snap from its indices because of Snap’s share structure that denies public investors the right to vote.
    Though Reuters reported the story after the market had already closed, the shares of Snap fell 3.5% today to $13.40, a new all-time low.
    Shares are now 21% below the IPO price of $17. Back then, on March 2, Snap was considered ‘too big to fail.’ It would have such a massive market capitalization that it would be included in all major indices, including the S&P 500 and the MSCI USA Index. Fund managers would be forced to buy Snap shares to keep their funds in line with the indices. Given the relatively small number of shares traded, this buying pressure would push up the price even further. It was simply a matter of creating a lot of artificial demand.

    This post was published at Wolf Street on Jul 26, 2017.


  • The Mother of All Bubbles

    We live in a world full of bubbles just waiting to pop.
    We have reported extensively on the stock market bubble, the student loan bubble, and the auto bubble. We even told you about a shoe bubble. But there is one bubble that is bigger and potentially more threatening than any of these.
    The massive debt bubble.
    In a recent piece published by Business Insider, US Global Investors CEO Frank Holmes calls it ‘the mother of all bubbles.’
    According to the Institute of International Finance (IIF), global debt levels reached a staggering $217 trillion in the first quarter of 2017. That represents 327% of global GDP. To put that into perspective, before the 2008 meltdown, global debt was a mere $150 trillion.

    This post was published at Schiffgold on JULY 26, 2017.


  • Mr. Trump: You May Not Want To Take Credit For The Stock Market Just Yet

    Stock market is still bullish
    If you have followed my analysis through the years, you would know that I have correctly been steadfastly bullish the stock market for quite some time. In fact, I was one of the very few who expected the market to rocket higher even after Donald Trump won the election last year.
    And, now, we are approaching the S&P 500 target in the 2500SPX region we expected to strike in 2017. However, just because the market has rallied strongly after the election as we expected, it does not mean we expect it to continue into the next election season. And, let me explain why that is so important.
    ‘It’s the economy, stupid’
    James Carville, one of President Clinton’s campaign strategists, coined a term years ago which has been considered the most important factor for an incumbent President being able to win re-election:
    ‘It’s the economy, stupid.’

    This post was published at GoldSeek on Wednesday, 26 July 2017.


  • Markets On Hold Ahead Of FOMC Meeting Conclusion This P.M.

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    (Kitco News) – World stock markets were mostly firmer in subdued trading overnight, as the marketplace awaits today’s FOMC meeting conclusion. U. S. stock indexes are slightly higher just ahead of the New York day session.
    Gold prices are moderately lower today on more profit-taking from the shorter-term futures traders, after recent price gains.
    Traders and investors are awaiting the conclusion of the Federal Reserve’s Open Market Committee meeting (FOMC) that began Tuesday morning and ends early this afternoon with a statement. No changes in U. S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U. S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U. S. monetary policy.
    In overnight news, the U. K.’s second-quarter GDP came in at up 0.3% on the quarter and up 1.7%, year-on-year. Those numbers were right in line with market expectations.

    This post was published at Wall Street Examiner on July 26, 2017.


  • The Two Charts That Dictate the Future of the Economy

    If you study these charts closely, you can only conclude that the US economy is doomed to secular stagnation and never-ending recession.
    The stock market, bond yields and statistical measures of the economy can be gamed, manipulated and massaged by authorities, but the real economy cannot. This is espcially true for the core drivers of the economy, real (adjusted for inflation) household income and real disposable household income, i.e. the real income remaining after debt service (interest and principal), rent, healthcare co-payments and insurance and other essential living expenses.
    If you want to predict the future of the U. S. economy, look at real household income. If real income is stagnant or declining, households cannot afford to take on more debt or pay for additional consumption.
    The Masters of the Economy have replaced the income lost to inflation and economic stagnation with debt for the past 17 years. They’ve managed to do so by lowering interest rates (and thus lowering interest payments), enabling households to borrow more (and thus buy more) with the same monthly debt payments.
    But this financial shuck and jive eventually runs out of rope: eventually, the rising cost of living soaks up so much of the household income that the household can not legitimately afford additional debt, even at near-zero interest rates.
    For this reason, real household income will dictate the future of the economy. If household incomes continue stagnating or declining, widespread advances in prosperity are impossible.

    This post was published at Charles Hugh Smith on Tuesday, July 25, 2017.


  • Wall of Optimism Cracking? IMF Lowers US Economic Growth Forecast

    Over the last several years, mainstream analysts have built a wall of optimism about the US economy. ‘Everything looks great,’ they say. ‘Look at the jobs numbers!’ ‘Look at the stock market!’
    A number of contrarians have said things aren’t so great and a massive crash is on the horizon. The mainstream has pretty much ignored the naysayers. But a recent report by the International Monetary Fund shows some cracks in the wall of mainstream optimism. And in the current political climate, it may not take much to cause the wall to crumble down.
    The recent collapse of Republican efforts to reform healthcare has rekindled doubts about Trump’s ability to push through his ambitious economic agenda. The real concern is if enough people lose faith in the Republican’s ability to fix healthcare, reform the tax system, and pass a significant infrastructure spending bill, it will prick the stock market bubble and set off a crash.
    It seems we’re beginning to see signs of doubt. On Monday, the IMF released its World Economic Outlook, featuring a downward revision in the economic growth forecast for the United States. The IMF estimated US growth at 2.1% both this year and next. In the April World Economic Outlook, it had forecast US growth of 2.3% in 2017 and 2.5% in 2018.

    This post was published at Schiffgold on JULY 25, 2017.


  • World Stock Markets Mixed, Quiet; FOMC Meeting In Spotlight

    This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
    Global equity markets were steady to narrowly mixed in quieter overnight dealings. U. S. stock indexes are pointed toward firmer openings when the New York day session begins. The U. S. indexes are at or near record highs with no early chart clues to suggest they are topping out.
    Gold prices are moderately lower in pre-U. S. session trading, on some normal profit taking from recent gains that saw prices hit a four-week high on Monday.
    Focus of the world marketplace is on the Federal Reserve’s Open Market Committee meeting (FOMC) that begins Tuesday morning and ends early Wednesday afternoon with a statement. No changes in U. S. monetary policy are expected. However, the Fed could indicate the timing of reducing its big balance sheet of U. S. securities. The tone of the FOMC statement will also be important for markets. Just recently Federal Reserve Chair Janet Yellen has sounded a more dovish tone on U. S. monetary policy.
    In overnight news, the closely watched German Ifo business sentiment index rose to a record 116.0 in July, from 115.2 in June. A July reading of 114.9 was forecast.

    This post was published at Wall Street Examiner on July 25, 2017.


  • Stunning Lack of Market Decline Highlights Surreal New Normal

    Investors are conditioned to believe the Fed has got their back. But they might be wrong. To say the stock market is on a roll is an understatement. The Big Three indexes (S&P 500, Dow Jones Industrial Average, NASDAQ) are making fresh highs, mostly because of valuation expansion. That is what investors are focused on. But what about the lack of market decline? The dynamics behind this fact could speak louder than any stock rally could.
    The Wall Street Journal is reporting that major indexes haven’t gone a calendar year without a five-percent-or-more pullback in 20 years. The last time this happened was following the ‘Brexit’ referendum, which eked out a 5.2% peak-to-trough loss. While not quite a ‘calendar’ year, it was over a year ago that this happened. In fact, the 267-day streak with a five-percent decline is the longest going back to 1996.
    Additionally, the S&P 500 has only experienced a 2.8% drawdown year-to-date. This, in contrast to a historical average of 14.4%. If it holds, it would be the second smallest drawdown in 60 years.

    This post was published at Wolf Street on Jul 25, 2017.


  • Something Big, Bad And Ugly Is Taking Place In The U.S. Retirement Market

    While the highly inflated value of the U. S. Retirement Market reached a new high this year, something is seriously wrong when we look behind the scenes. Of course, Americans have no idea that the U. S. Retirement Market is only a few steps from falling off the cliff, because their eyes are focused on the shiny spinning roulette wheel called the Wall Street Stock Market.
    Yes, everyone continues to place their bets, hoping and praying that they will win it big, so they can retire in style. Unfortunately, American gamblers at the casino have no idea that the HOUSE is out of money. The only thing remaining in their backroom vaults is a small stash of cash and a bunch of IOU’s and debts.

    This post was published at SRSrocco Report on JULY 24, 2017.


  • Barclays Exit Of Energy Business Triggers Surge In Oil Options Trades

    Several hours before the US stock market opened on Monday, the commodity world was shaken by an unexpected surge in crude options trades, with traders noting that “someone is either moving positions, blown up or getting out of commodities. MASSIVE amount of blocks going through in crude options.”
    Someone is either moving positions, blown up or getting out of commodities. MASSIVE amount of blocks going through in #crude #options.#OOTT
    — Mark Scullion (@mscullion) July 24, 2017

    A Bloomberg alert shortly after confirmed the huge size of trades crossing the tape, when nearly $100 million in oil options traded simultaneously:
    WTI crude oil options traded the equivalent of 48m bbl of contracts via block, according to data compiled by Bloomberg. Total value of all options combined is ~$99m Options include contracts from September 2017 through December 2020 5 largest blocks were: 4.4k Dec. $90 calls, 2.8k Dec. $60 calls, 2.5k Dec. $125 calls, 1.7k Dec. $95 calls, 1.4k Dec. $46 calls

    This post was published at Zero Hedge on Jul 24, 2017.


  • Does the Mainstream Have the Definition of Recession All Wrong?

    Pundits and government officials keep telling us the economy is strong. Everything is great. After all, GDP is growing.
    But a lot of people recognize things aren’t all that great. Some prominent economic analysts have said a major crash is looming. Nobel Prize winning economist Robert Shiller called stock market valuations ‘concerning’ and hinted that markets could be set up for a crash. Several other notable economists have recently expressed concern about surging stock markets, particularly in the US. Marc Faber has predicted ‘massive’ asset price deflation – possibly of a drop of as much as 40% in stock market value. Billionaire investor Paul Singer recently said the financial system is not sound. And former Ronald Reagan budget director David Stockman said we should get ready of ‘fiscal chaos.’
    So, how is it that some see a meltdown on the horizon while most of the mainstream sees nothing but unicorns and roses? If the economy is growing, how can anybody things recession is right around the corner?
    Well, what if the mainstream doesn’t understand a recession?
    In the following article originally published at the Mises Wire, Frank Shostak explains why the standard ‘two consecutive quarters of negative GDP’ is not a good definition for recession.

    This post was published at Schiffgold on JULY 24, 2014.


  • A Pro-Growth Move

    When President Trump was elected last November, the stock market threw a pro-growth party that resulted in a robust year-end rally for the major indices. Stock market participants were enthused by the prospect of reduced regulations, increased infrastructure spending, the repeal and replacement of the Affordable Care Act (aka Obamacare), and, most importantly, tax reform.
    That enthusiasm manifested itself in the outperformance of value stocks, but in more recent months, growth stocks have flexed their muscle and have been leading the major indices to new record highs.
    The shift in leadership has been plain to see and it plainly suggests that the stock market isn’t as hopeful as it once was that the assumed pro-growth legislation will come to pass.
    That has been discouraging in an economic sense because the real-time economic data have served as a reminder that the US economy is still stuck in its low-growth rut.

    This post was published at FinancialSense on 07/24/2017.


  • A Mystery Investor Has Made A 262 Million Dollar Bet That The Stock Market Will Crash By October

    One mystery trader has made an extremely large bet that the stock market is going to crash by October, and if he is right he could potentially make up to 262 million dollars on the deal. Fortunes were made and lost during the great financial crisis of 2008, and the same thing will happen again the next time we see a major stock market crash. But will that stock market crash take place before 2017 is over? Without a doubt, we are in the midst of one of the largest stock market bubbles in U. S. history, and many prominent investors are loudly warning of an imminent stock market collapse. It doesn’t take a genius to see that this stock market bubble is going to end very badly just like all of the other stock market bubbles throughout history have, but if you could know the precise timing that it will end you could set yourself up financially for the rest of your life.
    I want to be very clear about the fact that I do not know what will or will not happen by the end of October. But one mystery investor is extremely convinced that market volatility is going to increase over the next few months, and if he is correct he will make an astounding amount of money. According to Business Insider, the following is how the trade was set up…

    This post was published at The Economic Collapse Blog on July 23rd, 2017.


  • Technical Scoop – Weekend Update July 23

    It was another quiet week for the markets even as the S&P 500 hit new all-time highs less than 25 points from 2,500. Investor focus continued to be on Trump and the goings-on at the White House. For months, years even, Republicans and Trump vowed that there would be health care reform by ending Obamacare and bringing in their own version. Tax reform was another part of the agenda that was top in investors’ minds. By week’s end, health reform lay in tatters and tax reform is becoming doubtful. Despite a number of iterations of repeal-and-replace Obamacare, in the end they did not satisfy enough Republican senators to push it through the Senate. It went either too far or not far enough. In desperation, they went for a straight repeal and that one proved to be dead on arrival.
    After six months of Republicans controlling the White House, Congress, and the Senate they have not been able to pass one piece of major legislation. While seemingly it has not weighed on the stock markets, it does appear to be weighing on the US Dollar as the US$ Index sunk to new 52-week lows. As to tax reform, well, that appears to be going nowhere either and deadlines loom at the end of the fiscal year September 30, 2017. The debt ceiling is looming once again as the Treasury is poised to run out of money in early October – unless, of course, they agree to extend it once again. The debt ceiling debate is becoming increasingly rancorous, but not between Republicans and Democrats – instead, between Republicans and Republicans. The White House is on one side and Congress on the other, with one wanting and recognizing the need to raise the debt ceiling while the other wants to slam on the brakes for their own agenda.
    Things continue to heat up on the Russian investigation front. Donald Trump Jr., Paul Manafort, and Jared Kushner, the principals at the heart of the Russian meeting that was initially denied, are due to meet a Senate judiciary committee on July 26. Things continue to whirl around the investigation with constant implied threats from the White House leveled at special counsel Robert Mueller if the investigation expands into Trump’s finances. It ought to be interesting given Mueller’s authority especially if it clashes directly with the President. The President also slammed his Attorney General for recusing himself in the Russian investigation and if he had known that in advance, Jeff Sessions would never have been appointed. Something about throwing your report under the bus it seems. Finally, the President said that since he has the power to grant pardons he could pardon himself. Nothing said about the ensuing constitutional crisis.

    This post was published at GoldSeek on 23 July 2017.


  • Market “Paralysis” Confirmed – Squeezed Shorts And Anxious Longs Are Fleeing Stocks

    For the last two years, short interest in the US stock market’s largest ETF has collapsed as bears have been squeezed back to their lowest level of negativity since Q2 2007 (the prior peak in the S&P). But, there’s a bigger issue – despite record highs and ‘no brainer’ dip-buying, anxious longs have dumped S&P ETF holdings for four straight months – the longest streak since 2009 – seemingly confirming Canaccord‘s recent finding that “it’s not complacency, it’s paralysis.”
    Bearish investors say they are scaling back on these bets not because their view of the market has fundamentally changed, but because it is difficult to stick to a money-losing strategy when it seems stocks can only go up.
    ‘There seems to be an overall view that people are invincible, that things will always go up, that there are no risks and no matter what goes on, no matter what foolishness is in play, people don’t care,’ said Marc Cohodes, whose hedge fund focused on shorting stocks closed in 2008.

    This post was published at Zero Hedge on Jul 22, 2017.


  • Prepare for a 30-year bull market

    Heading into 2017, Wall Street was excited by the prospect of a U. S. president who sympathized completely with business. His promised tax and healthcare reforms were widely cheered by investors in the wake of his election. Yet the Congress has so far failed to deliver on those promises and investors are no longer giving the Trump administration a free pass based on the assumption that tax breaks are on the way.
    This loss of enthusiasm is reflected in the long periods of dullness the market has experienced since March. While the bull market leg which began with the November election remains intact, the market has proceeded in a halting fashion and has gradually lost some of its erstwhile momentum. The following graph illustrates this principle.
    Along these lines, a number of Wall Street economists have expressed the belief that if Trump’s promised reforms fail to materialize, the stock market’s current valuation precludes a continuation of the bull market. There are a number of reasons why this statement is likely false, however, not the least of which is that the market doesn’t need a political excuse to rally. Indeed, if that were the case then China’s equity market, in view of the country’s Communist government, would forever be stuck in neutral. The pace of innovation and productivity in countries with a market-driven economy is consistently high enough to always provide some justification for higher valuations and stock prices, regardless of the political climate.

    This post was published at GoldSeek on 21 July 2017.


  • Market Talk- July 21st, 2017

    We did eventually see a mixed close in US with the NASDAQ setting new gains but the late rally failed to convince Asian markets of the rally and having seen ECB unchanged, we saw Asian indices small down. It was a reasonably light session to close the week as main core markets drifted. The Nikkei watched the yen trade better (last seen trading towards the 110 handle) so having a negative effect on stocks resulting in a negative -0.2% close. Shanghai and Hang Seng gave a little back also after the recent consistent positive momentum, which is a fair performance when considering recent currency strength. Top talking points were surrounding the disconnect between the bond and stock markets, but also the weakness in the USD and the strength in gold. The USD has been losing support as we approach an almost 2% decline against the Euro but that is having a significant effect on European stocks.
    As Mario Draghi has kept the currency going the negative effects are being seen on equities, and a resurgence of bond spread tightening. It appears the fixed-income market is being the adult in the room seeing the road clear to continue the carry tightening play. That said, US stocks have held in well as earnings plays its supporting role but we should have a clearer picture next week when we hear from the Federal Reserve. Core markets closed with almost 2% declines which for foreign investors is really starting to hurt even providing for the recent euro rally.

    This post was published at Armstrong Economics on Jul 21, 2017.