Jerome Powell took center stage last week and the Federal Reserve chair didn’t do anything to dampen expectations of a rate cut. His comments sent both stocks and gold higher. Read More.
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Category: Bear Market News
07/14/19 – Tyler Durden: A Bearish Morgan Stanley Doubles Down: Why The Bank Sees The S&P Falling Back
For the past 18 months our call on US equities has been very consistent. After a massive bull run from April 2013 to January 2018, we suggested the US equity market was about to enter a multi-year consolidation during which the S&P 500 would trade in a wide range between 2400-3000. Since then, that range has defined the price action well with the lows in December coming in around 2350 and several attempts at 3000 on the upside that ultimately failed. We now find ourselves at the upper end of that resistance level once again, as shown in Exhibit 1. Just like in January and September last year, there appears to be growing excitement about the possibility of a break out above 3000. Read More.
Rogers Holdings Chair and legendary investor Jim Rogers is back with his latest warning that the next bear market is going to be “horrible, compounded by too much debt and a trade war.” Read More.
Shhh! Don’t wake the Wall Street bank regulators from their decade-long slumber to whisper in their ear that the same critical signs they ignored in 2007 and early 2008 are rearing their ugly heads again. Read More.
The US Federal Reserve leaning toward rate cuts indicates that it is trying to keep the air from coming out of the stock market bubble, according to Euro Pacific Capital CEO Peter Schiff. Read More.
The yield on short-term Treasurys has been higher than on long-term notes for more than 30 consecutive trading sessions, a sign that investors are concerned about the durability of the decadelong economic expansion. Read More.
The New York Fed has the odds of a recession within the next year at 33%. Some of the other models are humorous. Read More.
The current U.S. economic expansion turned ten-years-old in June and is poised to become the longest U.S. economic expansion in history in July. Considering all of the threats that the economy has faced in the past decade, it’s practically a miracle that the expansion has gone for so long without any hiccups. Read More.
Back in January, when Chair Powell unexpectedly U-turned on months of hawkish policy and shocked traders when he said that contrary to what he had said just two weeks prior during the December FOMC press conference, the Fed could be “patient”, rate hikes could, in fact “pause”, and the Fed’s balance sheet reduction is not in fact on “autopilot”, the Powell Put finally emerged for the first time, and the result has been a torrid rally ever since, and the best first half market performance in decades. Read More.
Morgan Stanley cut its global equities allocation to the lowest in five years, and downgraded its investment recommendation to underweight, saying the outlook for stocks over the next three months looks particularly poor. Read More.
The U.S.-China trade war and a spike in oil prices from geopolitical tensions have the potential to push the world into recession next year, according to renowned doomsayer Nouriel Roubini.
“It’s a scary time for the global economy,” the head of Roubini Macro Associates, sometimes known as “Dr. Doom,” said in an interview with Bloomberg TV. He said he expects a recessionary shock to materialize next year. Read More.
It’s no secret that machines are taking up a bigger and bigger share of investing, but the extent of their influence is approaching shocking proportions. It is as high as 80%, according to one major investing firm.
Passive investments such as index funds and exchange-traded funds control about 60% of the equity assets, while quantitative funds, those which rely on trend-following models instead of fundamental research from humans, now account for 20% of the market share, according to estimates from J.P. Morgan. Read More.
Earlier today, in a stark reversal from its traditionally cheerful demeanor, a Goldman Sachs strategist warned that “purely based on elevated equity valuations, as measured by the S&P 500 Shiller P/E, and current growth, according to our US Current Activity Indicator (CAI), the risk of an equity drawdown of more than 10%”, i.e. a sharp market drop, or for lack of a better word, crash, “is the highest since the GFC.” Read More.
President Trump often touts the buoyant stock market as an indication his economic policy success. In so doing, he chooses to ignore the much gloomier message that the bond market is now sending us as to where the U.S. economy might be headed. Read More.
06/27/19 – Tyler Durden: Goldman Warns Risk Of Market Crash Is Highest Since The Financial Crisis, Nearing 60%
A common refrain among the bullish talking heads on CNBC in recent months has been that whether one includes the Fed’s invisible hand in “price discovery”, or excludes it as so many naively continue to do, the result would be the same as stock fundamentals are still very strong. But is that really the case or are they just talking their book? Read More.
Invesco’s Kristina Hooper warns there’s too much complacency on Wall Street surrounding trade between the U.S. and China. With Presidents Donald Trump and China’s Xi Jinping scheduled to meet Saturday at the G-20 summit, she believes investors are dangerously overestimating the odds of a trade deal. Read More.
Are Stocks In A Bear Market? Technically, no.
Spiritually? Nor sure, but definitely, there’s is something happening here. What is ain’t exactly clear. Read More.
06/25/19 – Rebecca Ungarino: Global stocks will sink into a bear market if trade tensions escalate, UBS predicts Jun. 25, 2019, 12:12 PM Reuters Trade tensions raging on unabated will most likely push global stocks into a bear market, UBS predicts. President Donald Trump and Chinese President Xi Jinping’s planned meeting at the G20 summit this week to discuss trade matters comes as US stocks trade near their all-time highs. Visit Markets Insider’s homepage for more stories. Should the trade war between the US and China continue without a resolution, or see an escalation, global stock markets will most likely fall into a bear market, UBS says. “Continued trade tensions will likely see global equities down roughly 20% from current levels,” a team of strategists and economists led by Arend Kapteyn wrote in a Monday report.
Should the trade war between the US and China continue without a resolution, or see an escalation, global stock markets will most likely fall into a bear market, UBS says. “Continued trade tensions will likely see global equities down roughly 20% from current levels,” a team of strategists and economists led by Arend Kapteyn wrote in a Monday report. Read More.
If you needed any more proof that the world of fixed income has gone mad in the rabid hunt for yield, look no further than the Republic of Austria. If you liked its 100-year debt issued two years ago with a 2.1% return, how about settling for the same maturity for 1.2% now? Yes, you read that right: A 100-year bond yielding about 1.2%. Read More.
06/20/19 – Sven Henrich : Stocks are now offering the best selling opportunity in 10 years, thanks to the Fed
They’re right. It is different this time. It’s worse. Much, much worse. What is? Everything, in terms of preparedness for the next U.S. recession. Read More.
The S&P 500 is up 18% and powering toward its biggest first half since 1997. For bulls, things are great. Will they get any better? To a handful of cross-asset strategists who turned skeptical on stocks before this week’s manic sessions, that’s becoming the most pressing question. Increasingly, their answer is: not likely. Read More.
Deutsche Bank strategists Jim Reid and Craig Nicol wrote a report this week that echos what I and other Austrian School economists have been saying for many years: actions taken by governments and central banks to extend business cycles and prevent recessions lead to even more severe recessions in the end. Read More.
06/19/19 – Jesse Colombo: Why The Odds Of A Recession In The Next Year Are Even Higher Than You Think
I recently wrote a piece that was widely read called “Why You Should Not Underestimate The Severity Of The Coming Recession.” In that piece, I argued that the odds of a recession in the not-too-distant future were increasing rapidly and that mainstream economists are incorrect for assuming that it will be a mere ebb of the business cycle rather than a more powerful economic crisis like we experienced in 2008 or even worse. Read More.
06/19/19 – Eshe Nelson: $12 trillion of negative-yielding bonds are sending a clear message of distress
If reading financial markets is usually as inscrutable as reading tea leaves, bond investors have decided now is the time to send a message in big, bold letters. Read More.
The price of gold ran higher eight days in a row before today’s interventionist price smack. Technically, whatever that means, the gold price was likely due for a healthy pullback anyway. The price of gold is responding to what appears to be the Fed’s decision to begin cutting interest rates, though maybe not at the June meeting. Read More.