It remains to be seen if the US economy even began anything that could realistically be called a “recovery” in June. After all, virus cases are surging, states are pausing or reversing reopening plans, and retail foot traffic has stalled. The “V-shaped recovery” hype in which jobs and economic growth will surge to 2019 levels ahead of the election is nothing more than propaganda hogwash from the Trump administration. Read More.
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Category: Bear Market News
Typically, the last bill that people stop paying when they are overcome with debt is their mortgage and rent, well, if that is the case, then Americans just rang the alarm bell, because things are about to get messy. Read More.
ssFollowing yesterday’s mini-crash, US stocks zigged and zagged their way to a solidly higher close. The DJIA rebounded 299 points (1.1%) and the NASDAQ recovered 107 points (1.1%).
Stay tuned as the battle 0of the SkyNet StockBots continues.
The only realistic Plan B is a fundamental, permanent re-ordering of the cost structure of the entire U.S. economy. The fantasy of a V-shaped recovery has evaporated, and expectations for a W or L-shaped recovery are increasingly untenable. So forget V, W and L; the letters that will shape the future are N, P, B: there is No Plan B. Read More.
After two consecutive weeks of declines in the Fed’s balance sheet, the stock market has started to look especially wobbly, and after several days of steep declines, all June gains have vaporized. Read More.
06/26/20 – Adam Taggart: Market Update: Triple Threat! Three major risks the markets are not pricing in yet
Since the appearance of the bearish island reversal we noted two weeks ago, stocks have struggled and so far failed to regain the highs reached earlier in June. And another bearish island reversal happened on Tuesday. Read More.
What is happening to the world? Everybody is simply trying to use the word liquidity. When I ask experts why are markets going up when the world is looking bad, the simple answer is it is liquidity, it is Fed, it is money. Read More.
Wolf Richter just published some charts that, for anyone with a sense of stock market history, are pretty ominous. It seems that the major market indexes that recently soared back to record highs are being elevated by an amazingly small number of stocks – Apple, Microsoft, Amazon, Google and Facebook to be specific — which he calls the “Giant 5.” These stocks now account for nearly one-fifth of the Wilshire 5000 stock index’s value. Read More.
06/23/20 – Annie Lowrey: The Second Great Depression – At least four major factors are terrifying economists and weighing on the recovery.
The American economy is reopening. In Alabama, gyms are back in business. In Georgia, restaurants are seating customers again. In Texas, the bars are packed. And in Vermont, the stay-at-home order has been lifted. People are still frightened. Americans are still dying. But the next, queasy phase of the coronavirus pandemic is upon us. Read More.
Global growth is projected at –4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. Read More.
Everyone is talking about the massive disparity between stock prices and fundamentals right now. To paraphrase Jeremy Grantham, we now find ourselves in the top 1% of stock market valuations and the bottom 1% of economic outcomes (based on the annualized rate of decline in second quarter GDP). Read More.
Despite massive government and central bank stimuli, the global economy is seeing a concerning rise in defaults and delinquencies. The main central banks’ balance sheets (those of the Federal Reserve, Bank of Japan, European Central Bank, Bank of England, and People’s Bank Of China) have soared to a combined $20 trillion, while the fiscal easing announcements in the major economies exceed 7 percent of the world’s GDP according to Fitch Ratings. Read More.
06/23/20 – Mark DeCambre: The decline of the U.S. dollar could happen at ‘warp speed’ in the era of coronavirus, warns prominent economist Stephen Roach
Stephen Roach, a Yale University senior fellow and former Morgan Stanley Asia chairman, tells MarketWatch that his forecast for a sharp deterioration of the U.S. dollar could be a very near-term phenomenon, not an event that looms off in the distance. Read More.
Don’t let new highs on Nasdaq fool you. It’s still a bear market and I can prove it. First let’s acknowledge they are have and continue to throw the kitchen sink at this: Historic monetary and fiscal stimulus with more to come apparently as the powers that be are discussing another trillion dollar stimulus package on top of the $3 trillion they’ve already thrown at this and of course the Fed’s historic balance sheet expansion. Read More.
People are getting very optimistic. I’m reading predictions the massive retail splurge of the last few weeks means the crisis will result in much less severe slowdown – the US economy will only contract 4% rather than the earlier 6% decline. Brilliant..! We’re all going to be saved then? Read More.
06/19/20 – Charles Hugh Smith: Dear Junkies Addicted to Fed Smack: The Monkey on Your Back Is Now a Gorilla
Dear junkies addicted to the Federal Reserve’s free-money smack: like all addicts, you firmly believe you’re not addicted. Never mind those tracks, you can stop any time. Yeah, sure, but we all know you’re going to buy the dip and max out your margin account because the craving cannot be denied. Read More.
The Federal Reserve continues to destroy true price discovery in this market by executing short squeeze after short squeeze. Moral hazard be damned, the Fed’s desire to support the market has overruled common sense. Read More.
Following yesterday’s mini-crash, US stocks struggled to stabilize and regain its footings. After opening sharply higher, stocks zigged and zagged all over the place and ended solidly in the green. The DJIA recovered 477 points (1.9%) and the NASDAQ ended higher by 96 points (1.0%) to a fresh closing high.
Stay tuned as the battle 0of the SkyNet StockBots continues.
06/19/20 – Yun Li: The stock market is running out of steam with reopening trades fading and economic data ‘uneven’
The stock market, so eager to put the entire blow from the pandemic behind it, is now coming to terms that a “V-shaped” recovery might be too rosy a scenario. Read More.
Speculative frenzy in the midst of recession is not a new phenomenon. Yet the extent of the “madness” this time might well beat records in the small sample size available from the history laboratory. Read More.
The coronavirus pandemic — and the accompanying period of financial turmoil — will long be remembered for the unprecedented policy responses it elicited from central banks around the world. In the US, investors have characterised the Federal Reserve’s actions as “shock and awe”, not least for its historic pledge to buy an unlimited quantity of government debt, but also its decision to support even the riskiest of corporate bonds. Read More.
06/18/20 – Mark DeCambre: Stock-market legend who called 3 financial bubbles says this one is the ‘Real McCoy,’ this is ‘crazy stuff’
‘And the chutzpah involved in having a bubble at a time of massive economic and financial uncertainty is substantial,’ says Jeremy Grantham. Read More.
Dollar-denominated financial markets appeared to suffer a dramatic change on or about the 23 March. This article examines the possibility that it marks the beginning of the end for the Fed’s dollar. Read More.
Allianz Chief Economic Advisor Mohamed El-Erian said he’s not just worried about “zombie” companies but about “zombie markets,” too. “Zombie markets are markets that are completely mispriced, they’re completely distorted,” he said. Read More.
Despite some recent positive signs, “significant uncertainty” remains about the recovery of the US economy from the coronavirus pandemic, Federal Reserve Chair Jerome Powell said Tuesday. And unless consumers feel confident COVID-19 has been defeated, “a full recovery is unlikely,” Powell warned in his semi-annual testimony before the Senate Banking Committee. Read More.