Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Changes Coming to the Financial Markets in 2018

Stock-Markets / Financial Markets 2018 Jan 03, 2018 - 05:12 PM GMT

By: Rodney_Johnson

Stock-Markets It’s the first week of January, which makes it time for football playoffs and New Year predictions.

Since I’m not likely to grace the gridiron anytime soon, I land in the forecast camp. But playing Nostradamus is fraught with its own danger, and reminds me of an old quote by Darrell Royal, the longtime University of Texas football coach, that explained why he favored running the ball. He believed that when you threw the football, three things could happen, and two of them were bad.


You could complete the throw, which was good, watch it fall incomplete, or have it intercepted, both of which were bad.

When predicting future events, I can be right, the results can be inconclusive, or I can be flat out wrong. But we make money by seeing what’s just around the corner, so here’s my top five list of things that should happen in 2018, each with a twist…

U.S. companies will make more money.

OK, so I got an assist from the president and Congress, which recently passed a very favorable tax bill that puts our children another $1.5 trillion in hock while giving the proceeds to corporations.

It’s not much of a prognostication to guess those companies will have more green, but things won’t turn out as rosy as the president wants them to.

Expect first-quarter earnings to pop as companies estimate how much more of their revenue they can keep, but don’t look for higher GDP growth. Companies will spend more only if it looks like they can sell more stuff.

With interest rates near zero for the last decade, it was easy to borrow and expand if it made sense. Firms have already expanded as much as they needed to for the current level of demand. Simply reaping higher profits should give the stock market a boost due to higher earnings, but GDP should slip back to 2.0% in the second half of 2018.

The big winners should be companies that sell most of their stuff in the U.S., and have some connection with infrastructure. After his tax win, I expect President Trump to push infrastructure spending to the top of his list. Companies that benefit from both initiatives should lead the winners this year.

Oil prices will tumble.

Monopolies only work if you control most production and can scare the pants off of the other bit players in the market.

OPEC and its co-conspiring non-members have held the line on limiting production better than I expected, but they didn’t drive up prices on their own. They got a lot of help from supply disruptions in places like Libya and Liberia. Those countries, along with Venezuela and Iran, desperately need to sell more oil to keep the country coffers from going dry.

At the same time, American shale producers were more cautious than expected in ramping up production. But with West Texas touching $60, the time is ripe for the frackers to get back to business. As visible supply ramps up, prices will fall, just in time for the Saudis to price their precious IPO for Saudi Aramco.

Bitcoin will bust.

We had an interesting discussion internally about Bitcoin over the holidays. As Harry ranted about the crypto bubble, he called for the price to drop by 90% or so. Being a geek, I did a little math in my head and told the group that even if Bitcoin fell by 90%, it would still be worth more than $1,000.

It’s hard for me to think of something that’s supposed to be a storehouse of value fluctuating so wildly, but Bitcoin does just that. I think the crazy ride will drive out the late comers, who at this moment are down 25% or so. If the dip gains momentum, more casual buyers will retreat, creating a vicious selling cycle.

The U.S. government and other official entities will only make matters worse as they enforce tax laws that require reporting all buys and sells, and create new regulations for cryptocurrencies that remove anonymity and make it harder to move wealth across borders.

Electric cars will get a boost.


Forecasting for more electric cars to hit the road is like calling for the sun to rise in the East. Luckily, that’s not my point. I’m more about the batteries, as I have been for a couple of years now. I think 2018 is the year we make the next step forward in battery evolution, and my money is on solid-state lithium-ion.

It could be Panasonic, LG Chem, or even Samsung that makes the breakthrough, but it won’t really matter which company claims credit. Once we tackle the science, we get a dramatic bump in stored power, which will make electric cars more comparable with internal combustion engine vehicles, and will significantly enhance home power storage for solar energy as well as hand-held devices of all kinds.

As power demand grows, look beyond the horizon at natural gas demand. We’ll have to power all of those new electric plants, and clean-burning natural gas is the obvious answer.

Pot will be the story of the year, but not so much in the U.S.

Americans, myself included, are prone to navel-gazing, and with good reason. As the largest economic and military power on the planet, we hold a position of outsized importance. But things often happen beyond our shores, or in this case, land borders.

This year, Canada will legalize pot across the country, which should unleash not only pent up demand, but also encourage further research on the drug.

Canadian firms will be at the forefront of medical marijuana and marijuana exports, forcing other countries to re-examine their pot-limiting laws and regulations.

It’s hard to see how the U.S. will change its classification of cannabis as a Schedule 1 drug given our Commander-in-Chief and Attorney General, so pot will remain the domain of states within our borders. This probably explains why Constellation Brands just ponied up $190 million for a stake in Canadian firm Canopy Growth.

So, I’ve included a little something for everyone in this look ahead to the next 12 months, from electric car lovers to those that make their living in fossil fuels and everyone that smokes weed to relax.

No matter where you land on the spectrum, I hope you have a fabulous and prosperous New Year!

Rodney

Follow me on Twitter ;@RJHSDent

By Rodney Johnson, Senior Editor of Economy & Markets

http://economyandmarkets.com

Copyright © 2017 Rodney Johnson - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Rodney Johnson Archive

© 2005-2019 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

6 Critical Money Making Rules