Tuesday, February 11, 2025
A Stock Market Chart That’s Out of This World / Stock-Markets / Stock Market 2025
By: EWI
Valuations Are at the Furthest Edge of the Financial Solar System
By Robert Prechter, excerpted from the January 2025 Elliott Wave Theorist.
Figure 1 updates our history of year-end valuations for stocks of S&P companies on two bases: price to book value (Y axis) and dividend yield (X axis). I thought the year-end 2021 overvaluation would never be surpassed. But as you can see, the year-end 2024 reading is both higher and further to the right. It is the highest multiple ever recorded for S&P Industrials’ price to book value and the fifth-lowest level for the S&P Composite’s dividend yield, the four lower readings all occurring in 1998-2001.
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Tuesday, February 11, 2025
These Are The Banks The Fed Believes Will Fail / Companies / Financial Crisis 2025
By: Avi_Gilburt
The NY Fed has recently published a study on bank failures in the U.S., examining the reasons why banks fail. For this study, the regulator constructed a large database with balance sheet information for most U.S. banks dating back to the Civil War. This dataset is truly unique, as other studies on bank failures have focused only on the period since 1976. As a result, the longer time horizon of this study allows it to include data on over 5,000 bank failures.
The study draws the following conclusions about the causes of bank failures.
First, failing banks typically experience rising losses and deteriorating solvency before failure. Non-performing loans increase, leading to higher loan loss provisions, which ultimately result in lower profitability and reduced equity-to-assets ratios.
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Tuesday, February 11, 2025
S&P 500: Dangerous Fragility Near Record High / Stock-Markets / Stock Market 2025
By: Submissions
Owen Williams writes: In one of the strongest bull markets in history, the S&P 500 hit 57 record closing highs in 2024 after a stunning initial move higher off the Q4 2023 lows. Many pundits have been skeptical of the equity bull market for some time. Initially, with the inverted Treasury yield curve, economists had been forecasting a recession in 2024. Then came the artificial intelligence (AI) euphoria, with a market carried higher by only a handful of stocks dubbed “the Magnificent Seven”. Most recently, the skeptics have pointed to the historically rich equity valuations. None of these concerns have mattered. Narratives derive markets, and the AI revolution and concomitant productivity gains, perhaps coupled with the prospects for a stronger U.S. economy under Trump, have seriously taken hold of investors’ spirits. When it seems that everyone is singing from the same song sheet, we plug our ears and look objectively at the evidence that we see. Yes, equity valuations are historically very stretched and fund manager positioning is very aggressive. But these are not useful timing indicators as both have been true for most of 2024. The fragility we see is in various market indicators that may be suggesting that the bull run, at least temporarily, is ready for some corrective price action. In this article we present the internal weaknesses that our models are detecting in the U.S. equity markets. While the past never repeats itself exactly, many of the setups in our market indicators today look eerily similar to those witnessed prior to other major equity sell-offs.
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Monday, February 10, 2025
Stocks, Bitcoin and Crypto Markets Get High on Donald Trump Pump / Stock-Markets / Financial Markets 2025
By: Nadeem_Walayat
Dear Reader
This article Stocks, Bitcoin and Crypto Markets Get High on Donald Trump Pump was first made available to patrons who support my work. So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $7 per month, lock it in now at $7 before it rises to $10 per month for new sign-ups . https://www.patreon.com/Nadeem_Walayat.
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Monday, February 10, 2025
Bitcoin Break Out, MSTR Rocket to the Moon! AI Tech Stocks Earnings Season / Stock-Markets / Financial Markets 2024
By: Nadeem_Walayat
The US President has NO REAL POWER - Over the decades the Deep State Military Industrial Complex has eroded what power the office of the President had as Eisenhower warned would happen when he left office in 1961.
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Monday, February 10, 2025
Liquidity and Inflation / Economics / Inflation
By: Michael_Pento
I want to expand a bit on market liquidity and why modeling it is so crucial to the economy, inflation, and money management. Liquidity is the progenitor of Pento Portfolio Strategies’ Inflation Deflation and Economic Cycle (IDEC) model. It is the primary force behind what drives the inflation/deflation dynamic and, ultimately, the direction of stocks, bonds, currencies, and commodities.
The Factors affecting liquidity are bank lending practices, the level of real interest rates, debt and deficits, credit spreads, financial conditions, the direction of the Fed's balance sheet, the RRP, and the TGA. The IDEC strategy specializes in mapping this dynamic.
Monday, February 10, 2025
Gold Stocks Valuation Anomaly / Commodities / Gold & Silver Stocks 2024
By: Zeal_LLC
The gold miners’ stock prices have largely decoupled from their metal, which overwhelmingly drives their profits. This fundamental disconnect has spawned a shocking valuation anomaly, with gold stocks far too low relative to gold. But this aberration won’t last, as markets abhor extreme deviations from precedent. Mean reversions and proportional overshoots soon follow, so gold stocks will soar to reflect their record earnings.
Across stock markets throughout history, stock prices ultimately gravitate towards reasonable multiples of their underlying corporate profits. Those valuations vary with sectors, and herd sentiment can force them away from averages for some time. But eventually they always normalize, with mean reversions being an immutable market force. Visualize sector valuations like sine waves oscillating around long-term averages.
From a high-level valuation perspective, gold mining is a simple business. Miners excavate, haul, and crush gold-bearing ores, process them to recover the gold, then sell it usually at prevailing market prices. Profits are the difference between those and the costs of bringing that gold to market. While the metal can surge fast as this past year’s monster upleg proved again, mining costs lag way behind climbing slowly.
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Saturday, February 08, 2025
Stocks, Bitcoin and Crypto's Under President Donald Pump / Stock-Markets / Financial Markets 2025
By: Nadeem_Walayat
This article Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! was first made available to patrons who support my work. So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $7 per month, lock it in now at $7 before it rises to $10 per month for new sign-ups . https://www.patreon.com/Nadeem_Walayat.
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Saturday, February 08, 2025
Transition to a New Global Monetary System / Stock-Markets / Global Financial System
By: Raymond_Matison
Our current/old system
The last systemic or significant change in our Federal Reserve’s monetary policy occurred in 1971, when gold backing to our dollar was completely removed, and the United States transitioned to a centralized, completely fiat monetary system. While president Nixon is generally attributed for this action, in reality it was the previous decade’s government spending for wars and public social programs that forced this decision.
Since 1971, budget deficits have grown as national debt has exploded to what recently is now generally recognized by everyone to be at an unsustainable level. The official national debt (according to the National Debt Clock) at $36.3 trillion excludes the nation’s unfunded liabilities exceeding $222 trillion, which represents approved government programs for which no financial provisions have been made. In addition, just the present interest costs on our official debt alone exceeds $1 trillion per year, which is larger what ironically is called our defense rather than offense budget. Since governments always operate with budget deficits, it is guaranteed that our national debt and its servicing costs will continue to rise until the monetary system spirals out of control and destroys the nation’s currency. This is not something expected to occur decades in the future, but rather something that could occur at any time - only requiring an unexpected event to set it off.
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Saturday, February 08, 2025
Betting On Outliers: Yuri Milner and the Art of the Power Law / Companies / Learning to Invest
By: Submissions
By halfway through 2024, annual global venture capital funding had reached $94 billion across 4,500 deals. Most of these investments supported companies in artificial intelligence, financial services, and healthcare.
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Sunday, February 02, 2025
President Black Swan Slithers into the Year of the Snake, Chaos Rules! / Stock-Markets / Stock Market 2025
By: Nadeem_Walayat
Dear Reader
Did you enjoy Monday's black swan panic event that caught everyone by surprise? MSM needed a reason to explain why to it's audience and so plucked deepseek as a likely reason for the sell off in stocks and crypto's despite the R1 model having been released a week earlier!
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Monday, January 27, 2025
Trump's Squid Game America, a Year of Black Swans and Bull Market Pumps / Stock-Markets / Financial Markets 2025
By: Nadeem_Walayat
FLASH CRASH! Stocks and cryptos are plunging catching everyone off guard! Are enjoying the Black Swan Panic Event that you had 4 days advance warning of to prepare to capitalise upon? :)
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Thursday, January 23, 2025
Japan Interest Rate Hike - Black Swan Panic Event Incoming? / Stock-Markets / Financial Markets 2025
By: Nadeem_Walayat
Dear Reader
It's your lucky day, you get access to my most recent market brief as sent to Patrons Thursday Morning (23rd Jan).
Stock Market Brief - Possible Black Swan Event at 2am GMT 24th Jan 2024.
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Sunday, January 12, 2025
It's Five Nights at Freddy's Again! / Stock-Markets / Stock Market 2025
By: Nadeem_Walayat
Dear Reader
It's your lucky day, you get access to my most recent market brief as sent to Patrons Sunday 12th.
Early 2025 stock market rally evaporates triggering much doom and gloom though the S&P is barely changed on the start of the year! We have got pretty much a repeat of a year ago i.e. Santa rally fail, first five days down, that got folk into a bit of panic as the likes of Hirsch had talked up his incoming Trifecta SELL Signal on a Down January which prompted me to do the following Five Nights at Freddy's article -
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Sunday, January 05, 2025
Squid Game Stock Market 2025 / Stock-Markets / Stock Market 2025
By: Nadeem_Walayat
Dear Reader
The S&P ends 2024 at 5881 up an epic 23% on the year virtually a repeat of the +24% for 2023, and down 2.75% on the month which is contrary to the seasonal pattern for Decembers. In fact 2024 has been a year of contrary to seasonal price trends, i.e. April was down when it should have been Up, September was Up when it should have been Down and now December is down when it should have been Up, so Investing in the stock market during 2024 was a bit like playing Squid Game, every investor thinks they know with certainty that they will win with their perfect buys but most got killed or were left on the sidelines as the watched the market do the opposite of what they were expecting it to do, the key lesson being to be positioned for the market to either go up or down whilst maintaining exposure to the BULL MARKET as despite all of the fear and fomo the stock market managed to snake it's way to an epic gain of 23% for the year! What more could investors have asked for from 2024? The fact that despite this many are still disappointed speaks volumes of how difficult investing actually is practice vs folk thinking it will be easy money, if you find yourself disappointed despite a 23% gain then what are you going to be like during a down year?
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Friday, December 27, 2024
Stock Market Bubble Drivers, Crypto Exit Strategy During Musk Presidency / Stock-Markets / Financial Markets 2025
By: Nadeem_Walayat
Dear Reader
Counting down to year end and continuing pump into President Musk's inauguration that should see stocks and crypto's pump to new highs, with perhaps First Lady Donald giving us all a twirl on the dance floor.
Friday, December 27, 2024
Gold Stocks’ Remain Exceptionally Weak Even as Stocks Rise / Commodities / Gold & Silver Stocks 2024
By: P_Radomski_CFA
Calm before the storm, anyone?
Turning Points Ahead
So far, this week has been calm. However, as you read in my previous analysis, the turning points are near and we still have four more sessions before the end of the year. Bitcoin just failed to move above $100k again, and it is declining in the pre-market trading, and S&P 500 futures are down as well. Time will tell if that was the beginning of a bigger downturn, or will we still have to wait for it to start.
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Friday, December 27, 2024
Gold’s Remarkable Year / Commodities / Gold & Silver 2024
By: Zeal_LLC
Gold truly enjoyed a remarkable 2024, relentlessly powering higher to many new records. Gold achieved a rare monster-status upleg, which proved extraordinarily-unusual. Big gains stacked up despite extreme overboughtness, speculators’ exceedingly-overextended gold-futures positioning, and American stock investors not yet chasing gold’s upside. Several sources of major global demand coalesced for the heavy lifting.
For the past quarter-century, I’ve been in the contrarian-financial-newsletter business. All day everyday I’m blessed to study the markets, actively trade mostly gold stocks, and share all my research and trades with our newsletter subscribers. Few people in the world have been as deeply-immersed in gold and its miners’ stocks as I have. Coming from this meticulous heavily-studied perspective, 2024 was totally unique.
One year ago this week, gold was trading around a then-nominal-record $2,075. Some optimism was building, as in early December 2023 gold had just carved its first record close in fully 3.3 years. Yet at $2,071, that certainly wasn’t materially better than early August 2020’s $2,062. Incidentally gold’s run leading into that was its last monster-status upleg, soaring to 40%+ gains without any 10%+ corrections.
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Sunday, December 22, 2024
Stock Market Rip the Face Off the Bears Rally! / Stock-Markets / Stock Markets 2024
By: Nadeem_Walayat
Dear Reader
We are now into the time frame for a santa rally that runs from Monday into early January, 2024 has been another great year for AI tech stocks whilst most focus on the indices nothing burgers be it the S&P or Nasdaq (which I don't pay any attention to).
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Sunday, December 22, 2024
STOP LOSSES / InvestorEducation / Learning to Invest
By: Nadeem_Walayat
A Patron asks -
"Hi Nadeem, How do you plan for the unforeseen? In RUS-UKR context, recent Russian declaration/updating of Nuclear Doctrine. That a Non-Nuclear state can be nuked under this doctrine. This may or may not happen. However that is not the point. I have not put the Stop Orders on any of the shares, may be being a rookie. Should there always be a Stop Order for each share I own to hedge against black swan events? Would negative 20% Stop Orders make sense? I am saying 20% just as a random number. "
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