Best of the Week
Most Popular
1. Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - Nadeem_Walayat
2.Gold Price Focusing on May Cycle Bottom - Jim_Curry
3.Silver, silver, and silver! There’s More Than Silver, People! - P_Radomski_CFA
4.Is the Malaysian Economy a Potemkin Village - Sam_Chee_Kong
5.Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - Troy_Bombardia
6.A Big Stock Market Shock is About to Start - Martin C
7.A Long Term Gold Very Unpopular View - Rambus_Chartology
8.Stock Market “Sell in May and go away” Study When Stocks Are Down YTD - Troy_Bombardia
9.Global Currency RESET Challenge: Ultimate Twist - Jim_Willie_CB
10.The Coming Silver Supply Crunch Is Worse Than You Know - Jeff Clark
Last 7 days
More Clarity for the Short Term for Bitcoin Price - 22nd May 18
Study: A Rising and Strong U.S. Dollar Isn’t Consistently Bearish for the Stock Market - 22nd May 18
Gold, Silver & US Dollar Updates with Review of Latest COTS - 22nd May 18
Upside DOW Stock Market Breakout May Be Just the Beginning - 22nd May 18
5 Reasons Why Forex Trading Is Becoming Such A Big Deal In SA - 22nd May 18
Fibonacci And Elliot Wave Predict Stock Market Breakout Highs - 21st May 18
Stock Market Ideal Cycle Low Near - 21st May 18
5 Effects Of Currency Fluctuations On The Economy - 21st May 18
Financial Conditions are Still too Easy for the Stocks Bull Market to End - 21st May 18
US Stock Market Elliott Wave Predictions for 2018 and Beyond - 20th May 18
Are You Still Fearful of Cryptos? - 20th May 18
US Stocks - Why I am Short-term Bearish, Medium-term Bullish - 20th May 18
Looking for a Turn in Gold Price - 20th May 18
GDX Gold Mining Stock Fundamentals 2018 - 19th May 18
Semiconductor Stock Market Canaries: Chirp, Warble… Soon a Croak and Silence? - 19th May 18
Three Drivers of Gold Price - 18th May 18
Gold Market in First Tertile of 2018 - 18th May 18
What Happens Next When Small Cap (Russell) Leads the Stock Market - 17th May 18
Negative Signs for EUR/USD? AUD/USD - Battle - 17th May 18
DOW Jones and CRUDE Oil on a Cliff Edge, Waiting for a Nudge! - 17th May 18
Gold Price No More Subtleness – It’s Show Time! - 17th May 18
VIX Cycles Point to Stock Market Correction - 17th May 18
Trump Sounds End Times Armageddon Trumpet for Jerusalem, Israel Evangelical Prophecies - 16th May 18
Our Next Stock Market Dow Fibonacci Price Targets – Get Ready! - 16th May 18
The Coming Copper Crunch - 16th May 18
Stock Futures Are on a Sell Signal - 16th May 18
What to do When the IRS Comes for Your Property - 16th May 18
IS BITCOIN ANONYMOUS? - 16th May 18

Market Oracle FREE Newsletter

Trading Lessons

Janet Yellen Just Popped the Stock Market Bubble

Stock-Markets / Stock Market 2017 Mar 17, 2017 - 05:44 PM GMT

By: Graham_Summers

Stock-Markets

The Fed hiked rates for the third time in eleven years.

In so doing it has confirmed what many have long suspected: that the only thing that matters to the Fed is stock market levels.

The Fed certainly doesn’t care about GDP growth. If it did, it would be evident that now is NOT the time to be hiking rates.


Let’s take a look.

Last quarter’s GDP growth was abysmal at 1.8%. Since that time the Fed’s own GDP model has collapsed to just 0.9%. Look at the below chart and tell me you think it warrants two rate hikes in a three month period. We’re talking about a 2.5% GDP collapse in the space of six weeks.

By the way, this is a rosy projection. If you run 1Q17 GDP numbers using actual consumption instead of projection consumption then GDP growth is non-existent or 0%.

Moreover, a historical perspective only adds evidence that the Fed isn’t looking at GDP numbers when deciding to hike rates. The 4Q15 rate hike makes sense… but 4Q16 and now again in 1Q17?!  Why would the Fed want to hike twice in three months during sub-2% GDP growth!?

The simply answer is stock prices. When you look at a chart of the S&P 500, the 4Q15 hike makes sense. So does the decision to walk back additional hikes in 2016 (since the markets collapsed).

Now that the markets are once again roaring, the Fed has decided it’s time to start hiking again. And so it’s hiked twice in three months to attempt to deflate the stock market bubble.

The only problem with this is that stock bubbles don’t deflate easily. Usually they collapse in a big way. This time will be no different. We’ve got air pockets all the way down to 2,125 on the S&P 500.

If you’re looking for active real time “buy” and “sell” alerts to help you make money from the markets I strongly urge you to take out a 98 cent trial to my Private Wealth Advisory newsletter.

Private Wealth Advisory is a weekly investment advisory that tells investors what stocks and ETFs to buy and sell… and when to do so.

Does it work?

A full 86% of our investments made money in the last 26 months. Yes, 86%, meaning we make money on more than 8 out of 10 closed positions.

Currently our portfolio is chock full of winners too, including gains of 10%, 12%, 15%, 25% even 33%.

Just yesterday we closed out two more winners of 8% and 9%.

Best of all, you can explore Private Wealth Advisory for 30 days for just $0.98.

To do so…

Click Here Now!

Graham Summers

Phoenix Capital Research

http://www.phoenixcapitalmarketing.com

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

© 2016 Copyright Graham Summers - 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.

Graham Summers Archive

© 2005-2018 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