Whether you're watching CNBC, Twitter or another news outlet, you're hearing a great deal of talk about the odds increasing that the Fed will drop rates soon. Everyone's cheering it on..........yet no one's talking about recession possibilities. Don't say 'recession' on live tv! Keep that notion out of your head! At least I believe that's what Trump is thinking as he warms up for his 2020 campaign. He wants the market "up, up, up". A strong stock market with plenty of green and profits in your pocket. If it fails after 2020, so be it. At least he'll have his re-election and be further away from any prosecutorial attacks for four more years. If he loses, blame it all on the Democrats!
In the meantime our yield curve continues to invert, or decay if you see it that way; implying a rough road ahead for the U.S. as China and European countries slowing low and behold, the U.S. having a "global market", the U.S. looks to be slowing as well. Shocker!
Now the US housing market is slo
No bull lasts forever. Good times eventually are followed by bad ones, as investor euphoria gives way to fear and despair. The performance history of the Standard & Poor’s 500 stock index drives home the point: The 12 bull markets since the 1930s have all been followed by bear markets, or downturns of 20% or more, according to S&P Dow Jones Indices. The average bear market decline is a sizable 40%. Then there’s the mega-bears like the 2007-2009 rout during the financial crisis that knocked the S&P 500 down 57% and the nearly 50% slide after the internet stock bubble burst in 2000.
The current bull run, the second-longest in history and one that's generated a fourth-best gain of 254%, will eventually tire out, hit one final peak and head lower like all the rest.
The only question is when?
James Stack, a mark
The global economy has regained some composure, according to asset management firm Schroders. In their view, markets have regained a risk appetite following action by central banks, the normalization of commodity prices, and a lack of materialization for tail risks such as a U.S. recession or a Chinese hard-landing:
While volatility is indeed near its YTD low with the benchmark VIX down 32% since the start of the year, we would point out that this is potentially some calm before the storm.
Here are some upcoming waves, and we’ll see how they break:
Earnings and Buybacks: The blended earnings decline for the S&P 500 so far in 2016 Q1 is -8.9%, according to Factset. When earnings season is done and if this stays on target, it will mark the first time the index has seen four consecutive quarters of year-over-year declines in earnings since Q4 2008 through Q3 2009. That said, companies are doing whatever they can to stifle these declines via share buybacks. S&P Dow Jones says that nearly
Is our economic recovery truly as strong as charts would imply? Are we strong enough to stand on our own at these levels, or have we overshot the boundaries thanks to quantitative easing? Are economics in the U.S. strong enough or does recession lie ahead?
Curve watchers Anonymous has an eye on the yield curve. Here is a snapshot of year-end-closing values from 1998-12-31 through 2015-12-31.
Yield Curve Year End Closing Values 1998-2015
S&P 500 earnings are on track to close their first reporting season of negative growth since the Great Recession and estimates call for sub-zero growth in the current quarter as well.
Even if the trend reverses next year, as expected, a Fed rate hike in December could mark an unprecedented conflict between a tightening cycle starting at the same time as earnings fall into recession.
"We can't think of any instances when the Fed was hiking during an (earnings) recession," said Joseph Zidle, portfolio strategist at Richard Bernstein Advisors in New York.
"In the last six months one can point at a lot of different things. But if you think about fundamentals, falling corporate profits and the threat of rising rates" are behind the market stalling, Zidle said.
With more than 90 percent of S&P 500 components having reported, S&P 500 e
Very quickly some morning headlines. While a few of the geopolitical risk headlines may be behind us (Brazil election, Russian border, etc) I believe markets are waiting for this quarters earnings (and guidance) to set the stage. Multi-nationals with exposure overseas may struggle going forward if one believes the headlines below:
Five years since the end of the Great Recession, the economy has finally regained the nine million jobs it lost. But not all industries recovered equally. This awesome interactive from the NYTimes demonstrates what's moving and what is not along with over 200 charts drilling it down in simple terms. Tell your high school and college attendees. Are they in these growth areas? Click chart to make the jump to the interactive.
The U.S. is having to accept the "taper" while slow growth persists. Maybe it's time to get back to reality and fundamentals. Actually that works for me because I'd much rather buy stocks with S&P500 at the 100week than "here". Only time will tell but hedging and shorts are (finally) working.
The 10yr is definitely not happy and is trying to bounce off of 2.6 but if that goes.........look out for more pain (for equities). Seems as though sell in May was a good idea after all.
I so would love FOX news to pause from all the foot stomping and finger pointing "the labor force participation rate continues to drop under Obama and his failed Presidency!" to respond to this post from Ritholtz but that will never happen............because it doesn't boost ratings. If you drink the FOX koolaid, please take a look at this research and do some of your own.
Is it Obama's "failed policies"....or a good percentage merely a matter of aging demographics AND was it foretold? Yes it was - over a decade ago. Of course riling people up brings in viewers and sells newspapers. Hype sells, peiod. Telling people they knew it was going to happen but didn't bother to warn you...........well, not so good. Its easier to point at a President and say's "it's all his fault" than to admit that aging baby boomers coupled with increased automation and outsourcing to help companies bottom line (stock price) are the main culprits.
By the way, while they're pouring kerosene on your sm
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