Category: Bear Market News

There is immense confusion surrounding July’s Federal Reserve meeting and the rather insane aftermath that has been spurred on in the trade war. The Fed’s latest rate decision of a mere .25 bps cut was seen as “disappointing”, this was then followed by Jerome Powell’s public statements making it clear that this was only a mid-year “adjustment”, and that it was not the beginning of a rate cutting cycle and certainly not the beginning of renewed QE. Read More.

U.S. President Donald Trump shakes hands with Federal Reserve Chair Jerome Powell.
The stock market was in shambles to start the week, with the Dow Jones Industrial Average DJIA, +1.21% dropping more than 700 points after China retaliated against President Trump’s latest move in the intensifying trade war. Read More.

It is no longer absurd to think that the nominal yield on U.S. Treasury securities could go negative. Last week the German 30-year government bond yield dipped into negative territory for the first time ever. Around $14 trillion of outstanding bonds worldwide, or 25% of the market, now trade at negative yields, according to Bloomberg. What was once viewed as a short-term aberration – that creditors are paying debtors for taking their money – has already become commonplace in developed markets outside of the U.S. Read More.

When will Americans start to wake up and realize what is happening? At the end of last week, President Trump announced that the U.S. would be imposing a 10 percent tariff on 300 billion dollars worth of Chinese imports, and that marked a dramatic escalation in our trade war with China. This move by Trump came as a total shock to Chinese officials, and global financial markets were thrown into a state of turmoil. Read More.

It was almost ten years ago that we first profiled the most important trading desk in the world: not one situated in any of the (increasingly empty) massive trading floors of the world’s commercial banks located in either the financial district, midtown or Connecticut, but the one inside the 9th floor of 33 Liberty Street, the home New York Fed, the one which is also known in trader folklore as the “Plunge Protection Team.” Read More.

The Federal Reserve’s interest rate cut this week is not the real reason why U.S. stocks are falling. The real culprit is the exuberant mood that has captured Wall Street in recent weeks, which in turn made the stock market vulnerable to a big drop. The Fed’s decision was little more than the straw breaking the camel’s back. Read More.

With new risks from trade wars, stocks head into the final weeks of summer vulnerable to a pull back or even correction. The market was down sharply in the past week, buffeted first by disappointment over the Fed’s more hawkish-than-expected policy outlook. Then they were beaten down by fears President Donald Trump is starting a new front in the trade wars with China that is unlikely to end any time soon. Read More.

Following months of cajoling by the White House, the Federal Reserve finally cut its benchmark interest rate. However, the reaction in equity and currency markets was not the one President Donald Trump wanted – or many traders anticipated. Read More.

Echoing Guggenheim’s fears that US equities are in for a dramatic collapse, Morgan Stanley’s Mike Wilson warns that “…if equity markets fail one more time at our key resistance point, we believe the reversal is likely to be sharper and deeper than one might expect, even if the earnings recession is more benign than we expect. Read More.

One could get whiplash listening to Guggenheim’s Scott Minerd’s rapidly changing opinions these days.

Back on May 29, the weightlifting CIO of the $265 billion asset manager, made a gloomy forecast on CNBC, predicting that the stock market sell-off is likely far from over, and said stocks would go “somewhere below the lows in December.” Read More.

So there is a lot of buzz that the Federal Reserve is about to cut interest rates – and it might actually happen. We’ll see. But if it does happen, it will directly contradict the carefully crafted narrative about the economy that the Federal Reserve has been perpetuating all this time. Read More.

Since the 1950s, the Fed has embarked on 19 easing cycles, including the unconventional easing measures adopted during the course of this economic recovery, according to Deutsche Bank’s Binky Chadha. However of these, 9 or almost half, saw the economy eventually slip into recession; not only that, but the latest three rate cut resulted in a recession within 3 months of the first cut. Read More.

With the most important week for newsflow set to begin shortly, with the Fed expected to launch its first easing cycle in over a decade on July 31, the only question investors want answered is whether the Fed will cut rates by 25bps (while this is now fully priced in, many suggest it may be too little and lead to a sharp drop in risk assets) or by 50bps (which many see as overkill considering the relatively stable state of the US economy). Read More.

This past week, Trump announced he had reached an agreement with Congress to pass a continuing resolution which will suspend the debt ceiling until July 2021. The good news is that it will ONLY increase spending by just $320 billion. What a bargain, right? It’s a lie. Read More.

The manufacturing PMIs have become the holy grail of indicators for many market participants. ECRI’s U.S. Leading Index of Manufacturing PMIs (USLIMPMI) anticipates cyclical shifts in the ISM and Markit manufacturing PMIs for the U.S. to a 2 2/3-year low in June and the Markit PMI fell to a nearly-ten-year low in July. Read More.

WTF is going on!! The yield on the 2064 securities fell for its 9th straight day, down 4bps to -0.019%. Read More.

We believe there is an opportunity to capitalize on a material downturn in the business cycle based on the composite of timing and imbalance indicators in Crescat’s 16-factor macro model. Read More.

As much of the U.S. gets ready to face a heatwave, the appetite is just as sizzling for stocks after Fed Vice Chairman Richard Clarida and New York Fed President John Williams revved up market expectations about rate cuts. Despite some backpedaling on those comments, there’s still plenty of enthusiasm out there for equities. Read More.

Could it be possible that we are on the verge of the next “Lehman Brothers moment”? Deutsche Bank is the most important bank in all of Europe, it has 49 trillion dollars in exposure to derivatives, and most of the largest “too big to fail banks” in the United States have very deep financial connections to the bank.

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.

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.