Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Investors Profiting From Economic Schizophrenia

Stock-Markets / Financial Markets 2010 Jul 12, 2010 - 08:17 AM GMT

By: Martin_D_Weiss

Stock-Markets

Best Financial Markets Analysis ArticleIf last week’s massive price swings in the U.S. stock market proved anything, it’s that the world’s investors are massively confused.

They have every right to be. After all, even the world’s most respected authorities — the experts with access to every scrap of data an economist could ever want — are talking out of both sides of their mouths.


Take the International Monetary Fund (IMF) for instance. Last week, this august body released a report saying the global economy would grow in 2010 — but only if current conditions DON’T continue to persist!

Their exact words:

“Recent turbulence in financial markets — reflecting a drop in confidence about fiscal sustainability, policy responses, and future growth prospects — has cast a cloud over the outlook.”

The IMF goes on to cite the very same dangers for the United States we’ve been warning you about: High levels of public debt, unemployment, and a continuing credit crunch.

And IMF economists aren’t the only analysts giving mixed signals.

Last week, the market rallied sharply primarily because some Wall Street analysts said they expect this week’s retail sales report to show that consumers spent 3.2 percent more in June.

Sounds good, right? But at the same time …

  • Goldman Sachs and Citigroup to actually CUT their forecast for several retailers last Tuesday, including big names like Home Depot, Wal-Mart, Target and Macy’s. The reasons: High unemployment, weakening consumer confidence and record-low demand for new homes.
  • Plus, in another blow to the outlook for retail sales — and by extension, the entire U.S. economy — MasterCard Advisors’ SpendingPulse just reported that luxury spending actually dropped 3.9 percent last month!
  • And remember: Well-off households account for almost 40 percent of overall consumer spending and while consumer spending accounts for 70 percent of all U.S. economic activity. Or as a top analyst for the retail industry put it, “It isn’t a good omen for the consumer recovery, which cannot exist without the luxury spender.”

My view: The economic recovery is toast, and any additional or unexpected rallies in the stock market are a gift for investors — a final opportunity to sell your vulnerable stocks and shift to safer havens.

Precisely when and how far stocks fall remains, of course, uncertain. But one thing is virtually unavoidable:

The breath-taking swings in stocks, bonds, gold, and other markers are likely to grow even more extreme in the months ahead!

The next few months will bring a final showdown between the biggest economies of the world and the most powerful governments.

Will the governments prevent a double-dip recession and sovereign debt attacks at the same time? Or will they be overwhelmed by market forces that they cannot control?

I feel it ultimately MUST be the latter. I see possible delays and side trips in between, but I see no way that governments can win the final battles against sinking economies and stock markets.

The good news for investors is that these massive battles — between governments and natural market forces — bring great volatility … and the volatility, in turn can be harvested for equally great profit opportunities — all with unique investments that help you limit your risk.

Good luck and God bless!

Martin

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in