Dow's 9-week winning streak is the longest in nearly 24 years, it's all Trump's fault!
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2019 Feb 22, 5:47pm 1,379 views 20 comments
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1
Ceffer
2019 Feb 22, 7:37pm
Ceffer
2019 Feb 22, 7:37pm
Obama's patient work to improve the economy has finally come to fruition! Hail Obama!
3
clambo
2019 Feb 22, 7:45pm
The stock market going up is partially because of Trump. Herewith some reasons.
1. definitely pro business 2. reducing regulations on business 3. reducing taxes on business 4. reducing taxes for many individuals 5. more people working 6. attempting to slow down the destruction of American jobs.
So, more money is going to be in the hands of people who are working and who can keep more of their money. They will likely consume and spend more, then business profits will increase, along with lower taxes so their stocks will follow suit.
My friends who are not investors all know when the stock market had dipped down, and they ask me how I feel about it. They never ask me anything when it bounces back up.
1. definitely pro business 2. reducing regulations on business 3. reducing taxes on business 4. reducing taxes for many individuals 5. more people working 6. attempting to slow down the destruction of American jobs.
So, more money is going to be in the hands of people who are working and who can keep more of their money. They will likely consume and spend more, then business profits will increase, along with lower taxes so their stocks will follow suit.
My friends who are not investors all know when the stock market had dipped down, and they ask me how I feel about it. They never ask me anything when it bounces back up.
4
Hircus
2019 Feb 22, 8:44pm
Hircus
2019 Feb 22, 8:44pm
clambo says
I think it's that psychology thing where people are driven by fear to an irrational proportion. I too have friends and acquaintances who have large savings in junk like a savings or money market account because they fear stocks.
I just strum my fingers together like My Smithers on days that the market goes up, as I watch this terrific bull market carry my brokerage account balances slowly but surely along their exponential path upwards lol
My friends who are not investors all know when the stock market had dipped down, and they ask me how I feel about it. They never ask me anything when it bounces back up.
I think it's that psychology thing where people are driven by fear to an irrational proportion. I too have friends and acquaintances who have large savings in junk like a savings or money market account because they fear stocks.
I just strum my fingers together like My Smithers on days that the market goes up, as I watch this terrific bull market carry my brokerage account balances slowly but surely along their exponential path upwards lol
5
MrMagic
2019 Feb 22, 9:51pm
MrMagic
2019 Feb 22, 9:51pm
Patrick says
That's kind of false advertising, reminds me of certain posters that aren't here anymore chanting about the stock market growth under Obama.
If the stock market operated in a vacuum, and only started Jan. 1, then this would be good news. Same with Obama, if the market started in 2009, then the growth under him would have looked good too. But it didn't, the market lost 7,000 points beforehand, and had to gain them back.
But the market doesn't operate in a vacuum, these past 9 weeks are just gaining back what was lost in December. So, until it gets back to 26,800, the market is still down. I've seen many of the talking heads on the finance channels talk about the rally the last two months, but completely ignore the major meltdown in December.
That's being disingenuous.
The Dow posted its ninth consecutive week of advances, its longest weekly winning streak in nearly 24 years,
That's kind of false advertising, reminds me of certain posters that aren't here anymore chanting about the stock market growth under Obama.
If the stock market operated in a vacuum, and only started Jan. 1, then this would be good news. Same with Obama, if the market started in 2009, then the growth under him would have looked good too. But it didn't, the market lost 7,000 points beforehand, and had to gain them back.
But the market doesn't operate in a vacuum, these past 9 weeks are just gaining back what was lost in December. So, until it gets back to 26,800, the market is still down. I've seen many of the talking heads on the finance channels talk about the rally the last two months, but completely ignore the major meltdown in December.
That's being disingenuous.
6
RWSGFY
2019 Feb 22, 9:57pm
RWSGFY
2019 Feb 22, 9:57pm
Ceffer says
Not yet! It will become Obama's market again when Dow is back @ 26.9K.
Patience, grasshopper, patience.
Obama's patient work to improve the economy has finally come to fruition! Hail Obama!
Not yet! It will become Obama's market again when Dow is back @ 26.9K.
Patience, grasshopper, patience.
7
anonymous
2019 Feb 23, 3:53am
clambo says
Another reason - the steady drip drip drip of tidbits concerning the China/U.S. Trade Deal keeps investors strung along and hope alive that something significant will come out of all of this - meanwhile the March 1st deadline is being pushed back....
Hope and Change Wall Street wants to believe in
Herewith some reasons
Another reason - the steady drip drip drip of tidbits concerning the China/U.S. Trade Deal keeps investors strung along and hope alive that something significant will come out of all of this - meanwhile the March 1st deadline is being pushed back....
Hope and Change Wall Street wants to believe in
8
Tix2fun
2019 Feb 23, 6:00am
Tix2fun
2019 Feb 23, 6:00am
Well When the market moved above 26000 last Jan 2018 it felt like a FOMO rally Stage 3 of bubble and we are just about to enter stage 4 of bubble and there was a meltdown in Feb / March timeframe , similarly it recovered and crossed 26000 in Sept 2018 and we had a similar meltdown in Nov / Dec timeframe . I give credit to Trump for priking the bubble at the right time which I feel is very healthy for the market, anything that’s goes up in speed will fall back with greater velocity and quick time . If there is a meltdown from Stage 4 of the bubble it’s very lethal and losses investors have is too severe (50%+) and in quick time , we did see the glimpse of that in Dec , but markets have recovered which show we still not yet in bubble territory.
I feel Trumps Trade War policy has created uncertainty and triggers meltdown . If we have a resolution of Trade War will the market enter Stage 4 of Bubble time will tell . But I don’t see any signs of recession in US economy till Trumps end of term in 2024 , yes we might have stock market corrections and 20% meltdown which are always healthy for the markets.
I feel Trumps Trade War policy has created uncertainty and triggers meltdown . If we have a resolution of Trade War will the market enter Stage 4 of Bubble time will tell . But I don’t see any signs of recession in US economy till Trumps end of term in 2024 , yes we might have stock market corrections and 20% meltdown which are always healthy for the markets.
9
BayArea
2019 Feb 23, 6:32am
BayArea
2019 Feb 23, 6:32am
This post is fine as long as it’s acknowledged that we had the worst December on record since the Great Depression.
10
AD
2019 Feb 24, 8:34pm
AD
2019 Feb 24, 8:34pm
Yes, we did have at least one day of a bear market. All 3 major indices (S&P 500, NASDAQ, and Dow 30) were done 20% or more on December 24, 2018 from their recent peaks.
Major companies like Facebook suffered +35% declines.
The P/E ratio (trailing 12 months) is now about 21 for the S&P 500: http://www.multpl.com/
The Yield Curve (i.e., 10 year Treasury Note Rate minus 1 year Treasury Note Rate) is showing likely a recession this year: https://www.gurufocus.com/yield_curve.php
I believe we are nearly in a 10 year bull market, and its the longest ever bull market.
Major companies like Facebook suffered +35% declines.
The P/E ratio (trailing 12 months) is now about 21 for the S&P 500: http://www.multpl.com/
The Yield Curve (i.e., 10 year Treasury Note Rate minus 1 year Treasury Note Rate) is showing likely a recession this year: https://www.gurufocus.com/yield_curve.php
I believe we are nearly in a 10 year bull market, and its the longest ever bull market.
11
anonymous
2019 Feb 25, 2:55am
David Stockman - Former U.S. budget director says Trump is 'conducting 4 wars on the economy'
A former U.S. government official believes President Donald Trump is severely hurting the American economy in various ways.
“We have a delusional, unhinged madman in the Oval Office, and anything is possible,” David Stockman, the former director of the Office of Management and Budget (OMB) under President Ronald Reagan, told Yahoo Finance’s The Ticker (video above). “He's conducting four wars on the American economy, and it's not going to make it great again.”
Stockman, who just published Peak Trump: The Undrainable Swamp And The Fantasy Of MAGA, argued that Trump is waging a trade war, a border war, a political war against the Fed, and a war on the nation’s solvency.
1. Trade war
In March 2018, Trump slapped a 10% tariff on $200 billion worth of Chinese goods. He accused the country of unfair trade practices that were hurting Americans and the U.S. economy.
China quickly responded with retaliatory tariffs on roughly $50 billion worth of U.S. goods. Tensions escalated for months with both sides refusing to budge on the issue, kicking up tariffs even further.
“The trade war is a war on consumers,” Stockman said. “If it goes from 10% — which is already costing $30 billion a year just on Chinese imports — to higher, that is only going to be that much worse.”
Negotiations are underway on a trade deal that would address issues including forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.
“It looks like perhaps this new version of the Titanic will avoid the iceberg,” American Apparel & Footwear Association’s president and CEO Rick Helfenbein told Yahoo Finance’s On The Move. “Clearly, that makes all of us very happy because we have serious concerns if these tariffs come in… it's already hitting us a bit. It's already baking some inflation into our system.”
2. Border war
Stockman then referred to Trump’s hardline stance against illegal immigrants as a “border war on immigrant labor.”
Because of shifting demographics, “the domestic labor force is shrinking,” Stockman explained. “We need immigrant labor. We shouldn't be having a, you know, silly battle over a wall in a border where there isn't a crisis.”
A promise he made while on the campaign trail, Trump now has appropriated enough funds to commence building a nearly 2,000-mile-long border wall across the U.S.-Mexico border.
The Trump administration has also inspired harsh immigration enforcement tactics carried out by the U.S. Immigrations and Customs Enforcement.
Stricter immigration policies will strengthen national security, they argued.
“We’re moving in tremendous numbers of people to get out the MS-13 gangs and others gangs that illegally come into our country,” said Trump. “And we’re getting them out by the thousands. But this is a perilous situation, and it threatens to become even more hazardous as our economy gets better and better.”
3. Attacking the Fed
Trump’s third war was a political one, said Stockman. And it was aimed at the Federal Reserve for its interest rate hikes.
“He's conducting a political war on the Fed that finally was getting enough courage up to normalize interest rates,” Stockman explained. “For crying out loud, 10 years, interest rates have been below the inflation rate, which means zero money market costs. It's been a boon like never before to speculators. It's done nothing for Main Street.”
After a decade of keeping rates low following the Great Recession, the Fed began to accelerate interest rates hikes, with a third one in September 2018. Chairman Jerome Powell indicated that the central bank was going to be more data-dependent in its decisions.
But Trump expressed frustration over the hike — fearing that it may stall the economy — and tweeted:
Donald J. Trump
✔ @realDonaldTrump
The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!
He even discussed firing Powell, according to a report by Bloomberg.
But last week’s Fed minutes indicate that the Fed would be more patient in evaluating financial conditions — which means that it is pausing interest rate hikes – given “risks and uncertainties in the outlook.”
4. War on the nation’s solvency
Stockman’s final gripe with Trump is over the national debt.
As the number soars past $22 trillion — which is 22 times higher than when Reagan and Stockman were in office — Trump remains mum on the issue.
“He's conducting a war on the nation's solvency with a fiscal policy that is more out to lunch than anything I've seen since 1970 when I started on Capitol Hill,” Stockman fumed.
The big challenge was that even though the economy has been expanding at a rapid pace, “we're in the last months… you don't raise the deficit to $1.2 trillion at the very tippy top of a business cycle and expect anything but bad results,” said Stockman.
Hence, Stockman said: "Everything he's doing is wrong. The trade war is wrong. The massive deficits are wrong. Beating up on the Fed when it's trying to go in the right direction is wrong.”
He added that the combined effect would be that “when the recession finally comes, and it will come in the next year or two years… the deficit is going to soar to $2 trillion a year as revenue collapses, like it always does.”
And as there are considerable tailwinds coming at the economy — both domestically and overseas — Stockman argued that “we're going to go into the 2020s with a massive retirement wave from the baby boom, a deficit that is beyond belief in size, and a national debt that's out of control.
It will be a nonstop crisis for the entire decade, unless we do something big and quick. And I think it's too late.”
https://finance.yahoo.com/news/trump-economy-budget-economy-160431196.html
A former U.S. government official believes President Donald Trump is severely hurting the American economy in various ways.
“We have a delusional, unhinged madman in the Oval Office, and anything is possible,” David Stockman, the former director of the Office of Management and Budget (OMB) under President Ronald Reagan, told Yahoo Finance’s The Ticker (video above). “He's conducting four wars on the American economy, and it's not going to make it great again.”
Stockman, who just published Peak Trump: The Undrainable Swamp And The Fantasy Of MAGA, argued that Trump is waging a trade war, a border war, a political war against the Fed, and a war on the nation’s solvency.
1. Trade war
In March 2018, Trump slapped a 10% tariff on $200 billion worth of Chinese goods. He accused the country of unfair trade practices that were hurting Americans and the U.S. economy.
China quickly responded with retaliatory tariffs on roughly $50 billion worth of U.S. goods. Tensions escalated for months with both sides refusing to budge on the issue, kicking up tariffs even further.
“The trade war is a war on consumers,” Stockman said. “If it goes from 10% — which is already costing $30 billion a year just on Chinese imports — to higher, that is only going to be that much worse.”
Negotiations are underway on a trade deal that would address issues including forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.
“It looks like perhaps this new version of the Titanic will avoid the iceberg,” American Apparel & Footwear Association’s president and CEO Rick Helfenbein told Yahoo Finance’s On The Move. “Clearly, that makes all of us very happy because we have serious concerns if these tariffs come in… it's already hitting us a bit. It's already baking some inflation into our system.”
2. Border war
Stockman then referred to Trump’s hardline stance against illegal immigrants as a “border war on immigrant labor.”
Because of shifting demographics, “the domestic labor force is shrinking,” Stockman explained. “We need immigrant labor. We shouldn't be having a, you know, silly battle over a wall in a border where there isn't a crisis.”
A promise he made while on the campaign trail, Trump now has appropriated enough funds to commence building a nearly 2,000-mile-long border wall across the U.S.-Mexico border.
The Trump administration has also inspired harsh immigration enforcement tactics carried out by the U.S. Immigrations and Customs Enforcement.
Stricter immigration policies will strengthen national security, they argued.
“We’re moving in tremendous numbers of people to get out the MS-13 gangs and others gangs that illegally come into our country,” said Trump. “And we’re getting them out by the thousands. But this is a perilous situation, and it threatens to become even more hazardous as our economy gets better and better.”
3. Attacking the Fed
Trump’s third war was a political one, said Stockman. And it was aimed at the Federal Reserve for its interest rate hikes.
“He's conducting a political war on the Fed that finally was getting enough courage up to normalize interest rates,” Stockman explained. “For crying out loud, 10 years, interest rates have been below the inflation rate, which means zero money market costs. It's been a boon like never before to speculators. It's done nothing for Main Street.”
After a decade of keeping rates low following the Great Recession, the Fed began to accelerate interest rates hikes, with a third one in September 2018. Chairman Jerome Powell indicated that the central bank was going to be more data-dependent in its decisions.
But Trump expressed frustration over the hike — fearing that it may stall the economy — and tweeted:
Donald J. Trump
✔ @realDonaldTrump
The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can’t score because he has no touch - he can’t putt!
He even discussed firing Powell, according to a report by Bloomberg.
But last week’s Fed minutes indicate that the Fed would be more patient in evaluating financial conditions — which means that it is pausing interest rate hikes – given “risks and uncertainties in the outlook.”
4. War on the nation’s solvency
Stockman’s final gripe with Trump is over the national debt.
As the number soars past $22 trillion — which is 22 times higher than when Reagan and Stockman were in office — Trump remains mum on the issue.
“He's conducting a war on the nation's solvency with a fiscal policy that is more out to lunch than anything I've seen since 1970 when I started on Capitol Hill,” Stockman fumed.
The big challenge was that even though the economy has been expanding at a rapid pace, “we're in the last months… you don't raise the deficit to $1.2 trillion at the very tippy top of a business cycle and expect anything but bad results,” said Stockman.
Hence, Stockman said: "Everything he's doing is wrong. The trade war is wrong. The massive deficits are wrong. Beating up on the Fed when it's trying to go in the right direction is wrong.”
He added that the combined effect would be that “when the recession finally comes, and it will come in the next year or two years… the deficit is going to soar to $2 trillion a year as revenue collapses, like it always does.”
And as there are considerable tailwinds coming at the economy — both domestically and overseas — Stockman argued that “we're going to go into the 2020s with a massive retirement wave from the baby boom, a deficit that is beyond belief in size, and a national debt that's out of control.
It will be a nonstop crisis for the entire decade, unless we do something big and quick. And I think it's too late.”
https://finance.yahoo.com/news/trump-economy-budget-economy-160431196.html
12
anonymous
2019 Feb 25, 3:56am
The market is headed for a $12 trillion reckoning that could accelerate the next stock crash - Global markets have a $12 trillion problem staring them in the face.
A recent report from the Congressional Budget Office warned that deficits will total $11.6 trillion — or 4.4% of gross domestic product — between 2020 and 2029. That’s far higher than the historical average of 2.9% over the past 50 years, according to data from INTL FCStone.
Of course, a deficit is only as ominous as the market’s inability to buy the excess debt that’s issued along the way. But INTL FCStone macro strategist Vincent Deluard has serious concerns about that.
He notes that the Federal Reserve and foreign central banks — historically the most reliable purchasers of newly issued debt — are selling right now. While the Fed has slashed Treasury holdings by $260 billion since October 2017, their foreign counterparts have sold almost $1 trillion over the past four years.
So who’s left to pick up the slack and absorb the debt still flooding the market? Deluard says that responsibility will fall on retail investors and pension funds. But there are a few key caveats — and they don’t bode particularly well for the future of stocks.
As it pertains to retail investors, Deluard says that while they’ve proven themselves capable of buying newly created debt, they’re running out of money. Cash holdings are sitting at historically low levels, so they’ll have to fund their purchases by selling out of other existing positions — like owning stocks.
“If retail investors finance budget deficits, the money will have to come from existing cash savings or equity holdings,” Deluard said in a recent client note. “Reversing to the long-term average stock allocation would free about $4 trillion in retail savings to go into the Treasury market.”
INTL FCStone / Vincent Deluard
Pension funds are in a similar situation. Like retail investors, they bought Treasuries throughout 2018, but find themselves in a situation where they’ll have to exit positions in order to enter new ones. And once again, Deluard thinks that money will have to come from stocks.
Further, the chart below shows that while overall demand for Treasuries has been robust in recent years, they’re in a secular downtrend.
INTL FCStone / Vincent Deluard
It’s poor timing for an equity landscape that’s still in recovery mode after plummeting to the brink of a bear market in December. Many of the same overhangs are still present — such as President Donald Trump’s trade war and slowing economic growth that’s stoking recession fears — so any additional negative pressure could send the market tumbling again.
Deluard sums up the whole situation in neat fashion.
“The investors which can replace the Federal Reserve and foreign central banks as the marginal buyer of Treasuries are already fully invested,” he said. “Equities will have to be sold.”
https://declarenews.com/the-market-is-headed-for-a-12-trillion-reckoning-that-could-accelerate-the-next-stock-crash/
INTL FCStone Inc. is a Fortune 500 company, providing customers across the globe with execution, clearing and advisory services in commodities, capital markets, currencies, asset management and more.
https://www.intlfcstone.com/
A recent report from the Congressional Budget Office warned that deficits will total $11.6 trillion — or 4.4% of gross domestic product — between 2020 and 2029. That’s far higher than the historical average of 2.9% over the past 50 years, according to data from INTL FCStone.
Of course, a deficit is only as ominous as the market’s inability to buy the excess debt that’s issued along the way. But INTL FCStone macro strategist Vincent Deluard has serious concerns about that.
He notes that the Federal Reserve and foreign central banks — historically the most reliable purchasers of newly issued debt — are selling right now. While the Fed has slashed Treasury holdings by $260 billion since October 2017, their foreign counterparts have sold almost $1 trillion over the past four years.
So who’s left to pick up the slack and absorb the debt still flooding the market? Deluard says that responsibility will fall on retail investors and pension funds. But there are a few key caveats — and they don’t bode particularly well for the future of stocks.
As it pertains to retail investors, Deluard says that while they’ve proven themselves capable of buying newly created debt, they’re running out of money. Cash holdings are sitting at historically low levels, so they’ll have to fund their purchases by selling out of other existing positions — like owning stocks.
“If retail investors finance budget deficits, the money will have to come from existing cash savings or equity holdings,” Deluard said in a recent client note. “Reversing to the long-term average stock allocation would free about $4 trillion in retail savings to go into the Treasury market.”
INTL FCStone / Vincent Deluard
Pension funds are in a similar situation. Like retail investors, they bought Treasuries throughout 2018, but find themselves in a situation where they’ll have to exit positions in order to enter new ones. And once again, Deluard thinks that money will have to come from stocks.
Further, the chart below shows that while overall demand for Treasuries has been robust in recent years, they’re in a secular downtrend.
INTL FCStone / Vincent Deluard
It’s poor timing for an equity landscape that’s still in recovery mode after plummeting to the brink of a bear market in December. Many of the same overhangs are still present — such as President Donald Trump’s trade war and slowing economic growth that’s stoking recession fears — so any additional negative pressure could send the market tumbling again.
Deluard sums up the whole situation in neat fashion.
“The investors which can replace the Federal Reserve and foreign central banks as the marginal buyer of Treasuries are already fully invested,” he said. “Equities will have to be sold.”
https://declarenews.com/the-market-is-headed-for-a-12-trillion-reckoning-that-could-accelerate-the-next-stock-crash/
INTL FCStone Inc. is a Fortune 500 company, providing customers across the globe with execution, clearing and advisory services in commodities, capital markets, currencies, asset management and more.
https://www.intlfcstone.com/
13
marcus
2019 Feb 25, 5:57am
marcus
2019 Feb 25, 5:57am
Patrick says
Almost, but not quite undoing a 3 week drop in December.
Dow's 9-week winning streak is the longest in nearly 24 years, it's all Trump's fault!
Almost, but not quite undoing a 3 week drop in December.
14
MrMagic
2019 Feb 25, 9:04am
MrMagic
2019 Feb 25, 9:04am
Kakistocracy says
This just has to be Trump's fault, right?
Global markets have a $12 trillion problem staring them in the face.
This just has to be Trump's fault, right?
15
anonymous
2019 Feb 28, 6:29pm
Here’s what hedge-fund manager Doug Kass foresees triggering a one-day stock plunge of 5%
The month of February is winding down with no lunch and no deal in Hanoi for President Trump and his North Korean counterpart, but plenty of green for investors.
Investors are waking up to news that talks between POTUS and North Korea’s leader fell apart in the wee hours of Thursday as the two couldn’t agree over sanctions. So far, it looks like that set of geopolitical news may not do any lasting damage, as investors are focused on better-than-expected GDP data that rolled out ahead of the open.
“The combination of the lack of progress with North Korea and China will drag on equities and we might have to wait for a new catalyst to renew the bullish start to the year,” said Neil Wilson, chief market analyst at Markets.com.
Bullish start indeed. February is set to deliver gains of 3% or more for new indexes, with some pointing out it’s the best two-month start to any year of the year since 1987.
But our call of the day, from Doug Kass, president of Seabreeze Partners Management, warns that we’ve swung from a market opportunity in December to “market vulnerability” as the month winds down, with risk of “an abrupt change in market complexion and momentum” on the rise.
He explains his view in a recent email to clients: “A weakening global economic recovery, a faltering corporate profit picture, untenable debt loads, political turmoil (and the risk of an increasingly untethered President) provide an unsound foundation to markets that have had such a spirited rally.”
With that, Kass, laid out a top 10 list of events that could cause U.S. stocks to drop by at least 5% in a single session. Here we go:
1) Further bad news on U.S. growth, a stumble for China’s economy and a deeper recession for Europe. (Factory orders out of China Thursday were not great at all).
2) No U.S.-China deal on trade, and no “big deliverables” over IP theft and or technology exchange. No deal out of Hanoi could also be a trigger.
3) POTUS “lashes out in a series of policy mistakes” rattling market confidence as he faces failures in getting China, North Korea agreements. For example, hitting Europe with auto tariffs.
4) A move under 2.5% in the 10-year U.S. Treasury yield TMUBMUSD10Y, +0.14% — as the asset continues to fail to validate improvement in U.S. growth.
5) Machines and computer based trading, whose strategies are “all on the same side of the boat” push the sell button as big upside momentum we’ve seen in January and February makes a sudden U-turn.
6) More warnings over first-quarter results, adding to fears of a negative year for S&P 500 earnings.
7) Domestic pressures heat up for POTUS, such as damaging testimony by former lawyer Michael Cohen or a Mueller report.
8) A hard, problematic Brexit.
9) Crude-oil supplies spike and prices collapse.
10) A dovish ECB President Mario Draghi gets replaced by a hawk.
Note that Kass has been a bear on stocks for a while, as he turned negative in January 2018.
https://www.marketwatch.com/story/what-could-trigger-a-stock-plunge-of-5-in-one-session-hedge-fund-manager-doug-kass-2019-02-28
The month of February is winding down with no lunch and no deal in Hanoi for President Trump and his North Korean counterpart, but plenty of green for investors.
Investors are waking up to news that talks between POTUS and North Korea’s leader fell apart in the wee hours of Thursday as the two couldn’t agree over sanctions. So far, it looks like that set of geopolitical news may not do any lasting damage, as investors are focused on better-than-expected GDP data that rolled out ahead of the open.
“The combination of the lack of progress with North Korea and China will drag on equities and we might have to wait for a new catalyst to renew the bullish start to the year,” said Neil Wilson, chief market analyst at Markets.com.
Bullish start indeed. February is set to deliver gains of 3% or more for new indexes, with some pointing out it’s the best two-month start to any year of the year since 1987.
But our call of the day, from Doug Kass, president of Seabreeze Partners Management, warns that we’ve swung from a market opportunity in December to “market vulnerability” as the month winds down, with risk of “an abrupt change in market complexion and momentum” on the rise.
He explains his view in a recent email to clients: “A weakening global economic recovery, a faltering corporate profit picture, untenable debt loads, political turmoil (and the risk of an increasingly untethered President) provide an unsound foundation to markets that have had such a spirited rally.”
With that, Kass, laid out a top 10 list of events that could cause U.S. stocks to drop by at least 5% in a single session. Here we go:
1) Further bad news on U.S. growth, a stumble for China’s economy and a deeper recession for Europe. (Factory orders out of China Thursday were not great at all).
2) No U.S.-China deal on trade, and no “big deliverables” over IP theft and or technology exchange. No deal out of Hanoi could also be a trigger.
3) POTUS “lashes out in a series of policy mistakes” rattling market confidence as he faces failures in getting China, North Korea agreements. For example, hitting Europe with auto tariffs.
4) A move under 2.5% in the 10-year U.S. Treasury yield TMUBMUSD10Y, +0.14% — as the asset continues to fail to validate improvement in U.S. growth.
5) Machines and computer based trading, whose strategies are “all on the same side of the boat” push the sell button as big upside momentum we’ve seen in January and February makes a sudden U-turn.
6) More warnings over first-quarter results, adding to fears of a negative year for S&P 500 earnings.
7) Domestic pressures heat up for POTUS, such as damaging testimony by former lawyer Michael Cohen or a Mueller report.
8) A hard, problematic Brexit.
9) Crude-oil supplies spike and prices collapse.
10) A dovish ECB President Mario Draghi gets replaced by a hawk.
Note that Kass has been a bear on stocks for a while, as he turned negative in January 2018.
https://www.marketwatch.com/story/what-could-trigger-a-stock-plunge-of-5-in-one-session-hedge-fund-manager-doug-kass-2019-02-28
18
MrMagic
2019 Feb 28, 9:50pm
MrMagic
2019 Feb 28, 9:50pm
Kakistocracy says
Kakistocracy says
A guy who's a bear, giving a list why stocks will drop...
The quality of reporting today......
Does this guy suffer from TDS too?
With that, Kass, laid out a top 10 list of events that could cause U.S. stocks to drop by at least 5% in a single session.
Kakistocracy says
Note that Kass has been a bear on stocks for a while, as he turned negative in January 2018.
A guy who's a bear, giving a list why stocks will drop...
The quality of reporting today......
Does this guy suffer from TDS too?
19
anonymous
2019 Mar 8, 12:30pm
Insiders Who Nailed the Market Bottom Are Now Rushing to Sell Stocks. Buy-sell ratio falls to a two-year low after December’s spike, similar reading in early 2018 coincided with an equity peak.
A category of investors who correctly picked the market’s bottom in December is retreating from U.S. stocks.
The number of corporate executives and officers selling shares of their own companies has doubled since December while buying dwindled. Last month, insider sellers outpaced buyers by a ratio of 5-to-1, the most in two years, data compiled by the Washington Service showed.
The pickup in selling comes after stocks rebounded from the fourth-quarter sell-off, lifting the S&P 500 as much as 19 percent from its December low. While analysts have warned about reading too much into insider selling because factors other than valuations can influence the action, a similar spike in January 2018 coincided with the market’s peak.
“At a price that’s much higher, people are taking the opportunity to diversify their holdings,” said Andrew Hopkins, head of equity research at Wilmington Trust Co. “Typically in the C suite, people get allocated stocks as part of their compensation” at the start of a year, he added. “It would seem to me that you’d see some of automatic selling going on.”
Company executives were one of the few groups daring enough to go bargain hunting during the market rout in late 2018. In December, they scooped up shares at the fastest pace in eight years as stocks dropped to the brink of a bear market.
Now, they’re backing away. More than 2,600 insiders dumped shares last month, up from 1,360 in December. At the same time, only about 540 executives bought, less than half the number seen two months ago.
The retreat is occurring against a backdrop of market weakness. Stocks have fallen in all but one session since Feb. 25 as concern over the global economy resurfaced. The S&P 500 slipped 0.6 percent as of 11:15 a.m. in New York, as data showed U.S. hiring was the weakest in more than a year while wage gains were the fastest of the expansion.
Selling by insiders also whipped up in early 2018. The S&P 500 peaked at a record on Jan. 26 of last year to what was then a record, before plunging into a correction the following month.
https://www.bloomberg.com/news/articles/2019-03-08/insiders-who-nailed-the-market-bottom-are-rushing-to-sell-stocks?srnd=premium
A category of investors who correctly picked the market’s bottom in December is retreating from U.S. stocks.
The number of corporate executives and officers selling shares of their own companies has doubled since December while buying dwindled. Last month, insider sellers outpaced buyers by a ratio of 5-to-1, the most in two years, data compiled by the Washington Service showed.
The pickup in selling comes after stocks rebounded from the fourth-quarter sell-off, lifting the S&P 500 as much as 19 percent from its December low. While analysts have warned about reading too much into insider selling because factors other than valuations can influence the action, a similar spike in January 2018 coincided with the market’s peak.
“At a price that’s much higher, people are taking the opportunity to diversify their holdings,” said Andrew Hopkins, head of equity research at Wilmington Trust Co. “Typically in the C suite, people get allocated stocks as part of their compensation” at the start of a year, he added. “It would seem to me that you’d see some of automatic selling going on.”
Company executives were one of the few groups daring enough to go bargain hunting during the market rout in late 2018. In December, they scooped up shares at the fastest pace in eight years as stocks dropped to the brink of a bear market.
Now, they’re backing away. More than 2,600 insiders dumped shares last month, up from 1,360 in December. At the same time, only about 540 executives bought, less than half the number seen two months ago.
The retreat is occurring against a backdrop of market weakness. Stocks have fallen in all but one session since Feb. 25 as concern over the global economy resurfaced. The S&P 500 slipped 0.6 percent as of 11:15 a.m. in New York, as data showed U.S. hiring was the weakest in more than a year while wage gains were the fastest of the expansion.
Selling by insiders also whipped up in early 2018. The S&P 500 peaked at a record on Jan. 26 of last year to what was then a record, before plunging into a correction the following month.
https://www.bloomberg.com/news/articles/2019-03-08/insiders-who-nailed-the-market-bottom-are-rushing-to-sell-stocks?srnd=premium
20
anonymous
2019 Mar 11, 2:02am
‘Obscenely overvalued’: Stocks are far more fragile than most people realize — and one expert says traders are making the same mistake they did before the last 2 crashes.
If you’re sitting back and enjoying the stock market‘s scorching rebound from its near-catastrophe in December, you may be falling into a trap that’s doomed investors throughout history.
That’s according to the latest research from John Hussman, the former economics professor and current president of the Hussman Investment Trust.
Hussman argues that the ongoing equity rebound is just the latest in a storied history of head-fakes that have kept traders invested in the market prior to major downturns. And if investors keep buying into these rallies — which Hussman expects to keep occurring as long as they remain overly exuberant — he argues the market is increasingly setting itself up for disaster.
“The next couple of years are likely to include several breathtaking waterfall declines, and several more ‘fast, furious, prone-to-failure’ clearing rallies,” Hussman said in a recent blog post.
He continued: “Investors who study market history will find the progression familiar. Investors who instead dismiss the fact that extreme valuations have always been followed by collapse to run-of-the-mill valuation norms (which would currently require a roughly -60% loss in the S&P 500) are in for a difficult history lesson.”
Such a 60% plunge would take the S&P 500 back down around the 1,100 level — one not seen since the first half of 2010, when stocks were one year into their post-financial crisis recovery.
What’s more, Hussman says the sharp rebound in stocks right now reminds him of the periods before the last two market crashes.
It’s “important to observe the similarity of the recent advance to the short-lived clearing rallies of early-2001 and early-2008, both which restored borderline market internals before failing,” he said. “The recent advance most likely represents an aging bear market rally, with steep full-cycle market losses being inevitable.”
The Fed’s role
So how did we end up in this situation yet again? Hussman places much of the blame on the Federal Reserve, whose historically easy monetary conditions helped drag the US economy out of its worst modern recession. While their actions did have their intended effect, Hussman says they also created an unsustainable bubble of investor speculation.
“What the Fed did through its policy of quantitative easing was simply to encourage yield-seeking,” Hussman said.
He continued: “It purchased interest-bearing government securities, and paid for them by creating $4 trillion in zero-interest bank reserves, which someone had to hold at every point in time. The effort by each successive holder to get rid of that zero-interest money created a game of ‘hot potato,’ by which other securities were bid up until their long-term expected returns were also driven toward zero. And here we are.”
With all of that established, you may be surprised to learn that Hussman is actually neutral on the market in the near-term. He’s admittedly learned the hard way that eye-bleeding valuations won’t dissuade investors until market internals flip into negative territory. And while they’re edging in that direction, they remain positive.
But don’t get it twisted: Hussman is still a roaring bear in the longer term.
“Despite a fairly neutral near-term view, my full-cycle outlook remains very pointed,” Hussman said. “This is an obscenely overvalued market.”
Hussman’s track record
For the uninitiated, Hussman has repeatedly made headlines by predicting a stock-market decline exceeding 60% and forecasting a full decade of negative equity returns. And as the stock market has continued to grind mostly higher, he’s persisted with his calls, undeterred.
But before you dismiss Hussman as a wonky perma-bear, consider his track record, which he breaks down in his latest blog post. Here are the arguments he lays out:
Predicted in March 2000 that tech stocks would plunge 83%, then the tech-heavy Nasdaq 100 index lost an “improbably precise” 83% during a period from 2000 to 2002
Predicted in 2000 that the S&P 500 would likely see negative total returns over the following decade, which it did
Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009
In the end, the more evidence Hussman unearths around the stock market’s unsustainable conditions, the more worried investors should get. Sure, there may still be returns to be realized in this market cycle, but at what point does the mounting risk of a crash become too unbearable?
That’s a question investors will have to answer themselves. And one that Hussman will clearly keep exploring in the interim.
https://trendynewsupdate.com/obscenely-overvalued-stocks-are-far-more-fragile-than-most-people-realize-and-one-expert-says-traders-are-making-the-same-mistake-they-did-before-the-last-2-crashes/
If you’re sitting back and enjoying the stock market‘s scorching rebound from its near-catastrophe in December, you may be falling into a trap that’s doomed investors throughout history.
That’s according to the latest research from John Hussman, the former economics professor and current president of the Hussman Investment Trust.
Hussman argues that the ongoing equity rebound is just the latest in a storied history of head-fakes that have kept traders invested in the market prior to major downturns. And if investors keep buying into these rallies — which Hussman expects to keep occurring as long as they remain overly exuberant — he argues the market is increasingly setting itself up for disaster.
“The next couple of years are likely to include several breathtaking waterfall declines, and several more ‘fast, furious, prone-to-failure’ clearing rallies,” Hussman said in a recent blog post.
He continued: “Investors who study market history will find the progression familiar. Investors who instead dismiss the fact that extreme valuations have always been followed by collapse to run-of-the-mill valuation norms (which would currently require a roughly -60% loss in the S&P 500) are in for a difficult history lesson.”
Such a 60% plunge would take the S&P 500 back down around the 1,100 level — one not seen since the first half of 2010, when stocks were one year into their post-financial crisis recovery.
What’s more, Hussman says the sharp rebound in stocks right now reminds him of the periods before the last two market crashes.
It’s “important to observe the similarity of the recent advance to the short-lived clearing rallies of early-2001 and early-2008, both which restored borderline market internals before failing,” he said. “The recent advance most likely represents an aging bear market rally, with steep full-cycle market losses being inevitable.”
The Fed’s role
So how did we end up in this situation yet again? Hussman places much of the blame on the Federal Reserve, whose historically easy monetary conditions helped drag the US economy out of its worst modern recession. While their actions did have their intended effect, Hussman says they also created an unsustainable bubble of investor speculation.
“What the Fed did through its policy of quantitative easing was simply to encourage yield-seeking,” Hussman said.
He continued: “It purchased interest-bearing government securities, and paid for them by creating $4 trillion in zero-interest bank reserves, which someone had to hold at every point in time. The effort by each successive holder to get rid of that zero-interest money created a game of ‘hot potato,’ by which other securities were bid up until their long-term expected returns were also driven toward zero. And here we are.”
With all of that established, you may be surprised to learn that Hussman is actually neutral on the market in the near-term. He’s admittedly learned the hard way that eye-bleeding valuations won’t dissuade investors until market internals flip into negative territory. And while they’re edging in that direction, they remain positive.
But don’t get it twisted: Hussman is still a roaring bear in the longer term.
“Despite a fairly neutral near-term view, my full-cycle outlook remains very pointed,” Hussman said. “This is an obscenely overvalued market.”
Hussman’s track record
For the uninitiated, Hussman has repeatedly made headlines by predicting a stock-market decline exceeding 60% and forecasting a full decade of negative equity returns. And as the stock market has continued to grind mostly higher, he’s persisted with his calls, undeterred.
But before you dismiss Hussman as a wonky perma-bear, consider his track record, which he breaks down in his latest blog post. Here are the arguments he lays out:
Predicted in March 2000 that tech stocks would plunge 83%, then the tech-heavy Nasdaq 100 index lost an “improbably precise” 83% during a period from 2000 to 2002
Predicted in 2000 that the S&P 500 would likely see negative total returns over the following decade, which it did
Predicted in April 2007 that the S&P 500 could lose 40%, then it lost 55% in the subsequent collapse from 2007 to 2009
In the end, the more evidence Hussman unearths around the stock market’s unsustainable conditions, the more worried investors should get. Sure, there may still be returns to be realized in this market cycle, but at what point does the mounting risk of a crash become too unbearable?
That’s a question investors will have to answer themselves. And one that Hussman will clearly keep exploring in the interim.
https://trendynewsupdate.com/obscenely-overvalued-stocks-are-far-more-fragile-than-most-people-realize-and-one-expert-says-traders-are-making-the-same-mistake-they-did-before-the-last-2-crashes/
https://finance.yahoo.com/news/stock-market-news-february-22-2019-132420891.html