Friday, August 02, 2019
Post FED US Bond Market Yield Spread Falls Further: Risk Aversion is at the Door / Interest-Rates / US Bonds
By: QUANTO
All Powell needed to do was cut rates and to soften the blow on the short end of the curve, he needed to speak of the strong economy and that would have controlled the 1 month and 3 month and 2 year yields. Instead he ended up confusing about recovery and talking of nonsensicall comical terms like insurance cut etc. These are jargons that one should never use.
The reaction from the bond market was immediate as the 1 month and 3 month yield jumped sharply. Money was flowing out to the long end which is exactly what Powell didnt want to happen when he said "inflation gets baked in to bond yields". Even as he was saying, that is what was happening. We take a look at some of the charts which define and go beyond normal technical and trend lines for forex. We have always suggested: NEVER TRADE FOREX ON TECHNICAL INDICATORS. THEY ARE LAGGING. TO LOOK BACK AND TRADE FORWARD IS FOOLISHNESS.
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Friday, August 02, 2019
The Stock Market Fell and Volatility Spiked. What’s Next / Stock-Markets / Stock Markets 2019
By: Troy_Bombardia
The S&P fell Thursday on trade war-related news and volatility spiked. Today’s headlines:
- More economic weakness in manufacturing.
- Long streak of bad economic surprises
- Stock market’s volatility spiked
- AAII sentiment
- Short term bounce ahead for stocks?
Friday, August 02, 2019
No Sign Yet of Cyclical Inflation and the Gold Miners Don’t Mind a Bit / Commodities / Gold & Silver 2019
By: Gary_Tanashian
Contrary to majority opinion, gold and especially the gold mining stocks that leverage its macro status are not about inflation, especially cyclical inflation that runs with a positive economy.
Making an appropriate return after a few months on hiatus, ladies and gentlemen… the Macrocosm.
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Friday, August 02, 2019
After Fed Disappoints, Will Trump Initiate Currency Intervention? / Currencies / US Dollar
By: MoneyMetals
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.
The Trump administration wants the Fed to help drive the fiat U.S. dollar lower versus foreign currencies, especially those of major exporting countries.
Instead, the U.S. Dollar Index rallied throughout July ahead of the expected rate cut and continued rallying after Fed chairman Jerome Powell made it official on Wednesday.
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Friday, August 02, 2019
Precious Metals React To Fed Shockwaves – Ready For Next Move / Commodities / Gold & Silver 2019
By: Chris_Vermeulen
On July 31, 2019, the US Federal Reserve decreased the Federal Funds Rate (FFR) by 25 basis points. We believe the US Fed was pushed to take this action for three reasons that are directly related to the fear and greed that is abundant in the global markets.
Reason #1 Fed Had To Cut Rates
First, the US Fed is very concerned that the US housing market has stagnated and weakened over the past 16+ months. The Fed has pushed the FFR towards our modeling system’s upper boundary (2.0 to 2.25) many months ago and this has pushed the housing market over a supply/demand precipice that may already be too far gone for a substantial recovery. The US Fed, attempting to prevent another housing market collapse, must attempt to ease lending in an attempt to spark new real estate activity.
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Thursday, August 01, 2019
Silver Price Tragets for 2019 - Forecast Update (1/2) / Commodities / Gold & Silver 2019
By: Nadeem_Walayat
Silver, the precious metals coiled swing has just given us a taste of what to expect as the price shot higher during July, last trading at $16,56, up 12% since my analysis of 10th June ($14.74). Silver had been lagging the gold price all year, even entering into a downtrend early July that resolved in a $2, 15% surge higher as the following Silver / Gold graph illustrates.
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Thursday, August 01, 2019
US Yield Curve Inverted Months Earlier than Most Think / Interest-Rates / Inverted Yield Curve
By: John_Mauldin
The inverted yield curve is one of the more reliable recession indicators.
I discussed it at length last December. At that point, we had not yet seen a full inversion. Now we have, and it appears the curve was “inverted” back then, and we just didn’t know it.
The Powell Fed spent 2018 gradually raising rates and reducing the balance sheet assets it had accumulated in the QE years.
This amounted to an additional tightening. In fact, the balance sheet reduction may have had more impactthan lower rates.
Now if you assume, as Morgan Stanley does, every $200B balance sheet reduction is equivalent to another 0.25% rate increase, which I think is reasonable, then the curve effectively inverted months earlier than most now think.
Thursday, August 01, 2019
Climate Change and the Emergent Global Ideology / Politics / Climate Change
By: Mark_Blair
whether one is or is not convinced of anthropogenic global warming just isn’t the point. The point is that it’s the emergent global ideology, the perfect opportunity for discredited communists and bureaucrats to posture as saviors. (And we’ll discuss below The Other (Actual) Environmental Emergency: species loss, groundwater depletion, plastics, peak oil.)
But there’s a huge fly in the ointment: the west’s economic dependence on China, the brutal capit-ommunist dictatorship that keeps us in tube socks. China is – seems to be – in the final phase of biggie big big currency debasement.
Thursday, August 01, 2019
Stock Market Bearish Signs from the Fed, Economy, and Volume / Stock-Markets / Stock Markets 2019
By: Troy_Bombardia
Stocks fell Wednesday as the Fed cut interest rates. Today’s headlines:
- Rate cut and stocks
- The economic expansion cycle
- Manufacturing weakness
- Stock market’s volume
- U.S. Dollar breakout
Thursday, August 01, 2019
Next Recession Robust Case For The Largest Stock Market Losses In History / Stock-Markets / Stock Markets 2019
By: Dan_Amerman
Stock market indexes are currently at record or near record highs, even as the chances for recession within the next 1-2 years seem to be rising. So how great would the losses be from these record heights, if the business cycle continues and we get another round of recession and bear market?
Thursday, August 01, 2019
US Fed Rattles Global Stock Markets / Stock-Markets / Stock Markets 2019
By: Chris_Vermeulen
Today is the day for the US Fed to announce their rate decision and we believe the 25 basis point rate cut is the only option they have at the moment that will attempt to settle foreign market fears and allow for a suitable “unwinding” of the credit/debt “setup” we highlighted in Part I of this research post.
We believe out August 19 expectation of a global market PEAK and the beginning of a price reversion move is related to multiple aspects of the timing of this Fed move and the current global economic outlook. The unwinding of this debt/credit bubble will likely take many more years to unravel. Yet, right now the US Fed is trapped in a scenario they never expected to find themselves in. Either continue to run policy that supports the US economy (where rates would likely stay between 1.75 to 2.75) over the next 5+ years or yield to the global market and attempt to address a proper exit capability for this debt/credit “setup”.
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Thursday, August 01, 2019
Precious Metal Stocks Are Not An Investment They Are A Speculation / Commodities / Gold & Silver 2019
By: Bob_Kirtley
Preamble
Let's start by defining investment and speculation, and for this purpose, I have used Investopedia:
An investment is an asset or item acquired with the goal of generating income or appreciation.
Speculation refers to the act of conducting a financial transaction that has substantial risk of losing value but also holds the expectation of a significant gain or other major value.
Wednesday, July 31, 2019
Dow Stock Market Trend Forecast and AI Investing Update (2/2) / Stock-Markets / Stock Markets 2019
By: Nadeem_Walayat
This is part 2 of my July stock market trend forecast update. Much as expected the correction ended and resolved in a rally towards the trend forecast. With the Dow currently deviating from the trend forecast by about +1.5%.
Wednesday, July 31, 2019
Gold Awaits as Boris Johnson and the Fed Take the Spotlight / Commodities / Gold & Silver 2019
By: Arkadiusz_Sieron
Last week, Boris Johnson became the PM of the UK. The odds of hard Brexit increased, sending pound lower. Now, markets await tomorrow’s FOMC meeting. Gold closely monitors these events and thinks about which way to go next.
Boris the Brexiteer
Last week, Alexander Boris de Pfeffel Johnson – for the people of the Great Britain known as Boris Johnson with a funny mop of blonde hair – became the next Prime Minister of the United Kingdom, after Theresa May resigned. And who knows – he might very well be the last prime minister of the Great Britain, as the union comes under increasing internal pressure due to Nicola Sturgeon’s push for a second referendum on Scottish independence. Remember, not all constituent parts of the United Kingdom voted for Brexit – the lion’s share of that vote came from England.
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Wednesday, July 31, 2019
Stock Market Expensive: Traumatic Correction Approaching / Stock-Markets / Stock Markets 2019
By: QUANTO
As S&P climbs to new highs and closes another week into 3000s levels, we believe that the ground underneath is starting to slip. The economy per say may not be the problem. However the same cannot be said about valuation. The S&P500 is valued over 100% to its traditional mean and median levels on price to earning ratio. The one month treasury yield is now above US 2 year and 10 year yield thus effectively inverting. Money is often borrowed in the short term markets. A rise in short term rate is a warning signal of the coming mayhem. Rising yield will force models to reset after certain threshold are hit and this automatically converts into equity market cash outs. This sets of a chain reaction as sell momentum can spread across.
THe current S&P earning yield is 4.5% down from 6% thus contracting the returns investors make. This becomes even worrying when the short term yield is closing in on the earning yield at its fastest pace in over 10 years. We believe traumatic correction is on its way.
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Wednesday, July 31, 2019
Stock Market Medium-long Term Bullish Case From a Trend Following Perspective / Stock-Markets / Stock Markets 2019
By: Troy_Bombardia
The stock market is going nowhere as traders prepare for a rate cut. Today’s headlines:
- The stock market’s MACD
- S&P’s indecision is coming to an end
- Put/Call remains very low
- Finance stocks are finally going up
- Materials are no longer lagging the stock market.
Tuesday, July 30, 2019
US Fed Infinite QE Forever at Zero Bound / Interest-Rates / Quantitative Easing
By: Jim_Willie_CB
The widespread profound and recognized global recession, complete with numerous icon corporate failures, will lead the US Federal Reserve to return to unlimited Quantitative Easing with a Zero Percent chaser. The Jackass calls it a return to Infinite QE Forever at the Zero Bound. Not only is the double step of return to QE with a sequence of interest rate cuts urgently necessary, but the financial markets are demanding it. In fact, they are holding the USFed hostage, as the venerable august body is backed into a policy corner. This time seems different. For ten years, the USFed has relied upon coordinated policy with the Euro Central Bank, having used all the most extreme measures, yet has a systemic failure on its hands. Witness extreme monetary policy failure. The systemic failure is both financial and economic. The bond purchase program wrecked the bond market by driving away legitimate investors, while the ultra-low interest rates wrecked the economy by distorting asset allocation.
Tuesday, July 30, 2019
Nearly 700,000 Homes in the UK Have Broadband Classed as Slow / Personal_Finance / ISP's
By: Boris_Dzhingarov
Do you feel like your internet is constantly slow and sluggish, meaning your unable to stream shows from the likes of Netflix or Amazon Prime? Well, you’re not alone, as a recent study from Ofcom has shown that nearly 700,000 homes across the UK have broadbands speeds of less than 10Mbps. That’s nearly 2% of offices and homes in the UK.
This is particularly shocking as 10Mbps is what is considered to be the bare minimum a household needs in order for it to cope with internet needs. This means that simple actions like watching a TV show on demand on Sky, playing video games or using Netflix will be extremely difficult. Even worse, if you have a family who all want to use the internet, there won’t be enough for everyone – which is sure to end in fights!
Tuesday, July 30, 2019
Are We in Recession Yet? / / Recession 2019
By: John_Mauldin
I’m often asked if recession is coming.For quite some time now, my answer has been: “Yes, but not just yet.”
That’s still what I think today, but more of the early warning signals I have used in the past are beginning to flash again.
I see some leading indicators weakening. I see smart people like Dave Rosenberg argue we may already be in recession today.
And I see Wall Street not really caring either way, so long as it gets enough rate cuts to prop up asset prices. None of that is comforting.
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Tuesday, July 30, 2019
Foreign Policy Betrayal of America / Politics / US Politics
By: BATR
Very little has changed when it comes to the elites who control public policy. Foreign affairs have been shaped by an un-American tribe of Judas' who seek to rule over real patriots. America has been systematically sold out for well over a century by deviants of our culture, economics, politics and especially religion. A legitimate foreign policy, above all, needs to protect our own country and her own people. Abdicating those responsibilities to benefit Israel is treason. Regretfully, most of the populace is so afraid of being labeled an anti-Semitic that they eagerly suspend rational thinking to be a kosher supporter.