Analysis Topic: Stock & Financial Markets
The analysis published under this topic are as follows.
Monday, July 18, 2022
Stock Market Risk-On Vs. Liquidity Squeeze / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 ended a losing streak thanks to the still fine retail sales data, and even consumer confidence edged up. In the flattening yield curve characterizing the move to a slow growth phase, it was (and will be) up to tech to outperform value. Also healthcare is likely to see brighter times ahead. If I were to pick two reasons for why I think stocks are bottoming here, it would be the risk-on turn in bonds accompanied by the 10-year yield soundly below 3.25%, and the capitulation in oil stocks (former star performer as these are likely to get pulled down among the last sectors while the key laggards such as tech are on the verge of starting to outperform) coupled with oil holding my $93 support.
Wednesday‘s very hot CPI print means that the pressure on the Fed to keep hiking aggressively, is on. Indeed no pause in inflation, and if PPI is anything to go by (it is) then there is a lot more in the pipeline – and I‘m not bringing up owners‘ equivalent rent, which would continue driving inflation ahead (it‘ll be now service driven as opposed to goods driven). With 50bp obviously not being enough to recoup some of the Fed‘s badly damaged credibility, the question is by how much they hike actually. There is chatter about a full 1%, but another 75bp one looks most probable to me. And should we see signs of inflation moderating (gasoline and heating oil topped in June, which would help the July figures, and with inflation expectations pointing lower now, odds are that we would then get 25bp in September, and that‘s it – midterms next, justifying Fed‘s wait and see posture.
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Sunday, July 17, 2022
Dow Stock Market 2022 Trend Pattern / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Dear Reader
This is brief stock market update as I seek to complete my extensive analysis of the US Housing Market which the following contents list indicates extent of -
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Sunday, July 17, 2022
What Are The Driving Forces Behind The Shift In Global Financial Markets Risks? / Stock-Markets / Financial Markets 2022
By: Chris_Vermeulen
Global market risks have shifted dramatically over the past 90+ days. It almost seems as though the global markets turned 180 degrees overnight, generally going from moderately soft monetary policies to very extreme monetary policies and conditions. This sudden shift caught many traders and investors off guard and resulted in -20% to -25% losses for many.
The driving forces behind this sudden shift are inflation and excess capital (M2) because of nearly a decade of near-zero US interest rates. Much of the excess capital created over the past decade has been deployed into global equities, infrastructure, and various speculative instruments (art, homes, cryptos, collectibles, and others). However, without a doubt, the recent burst of inflation is also a result of COVID restrictions. Such restrictions reduced supply capabilities and the resulting interruptions of manufacturing/supply have been felt throughout the post-COVID global recovery.
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Wednesday, July 13, 2022
Stocks, Pot Stocks & Bonds: 5 global Market Forecasts / Stock-Markets / Financial Crisis 2022
By: EWI
Hi reader,
Back in 1992, our friends at Elliott Wave International began offering their institutional subscribers a thin monthly brochure packed with big-picture forecasts for key markets.
Today, 30 years later, Global Market Perspective is still one of EWI's most-read publications.
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Tuesday, July 12, 2022
Gold, Stocks, Bitcoin, and Bonds Asset Price Deflation / Stock-Markets / Financial Markets 2022
By: Kelsey_Williams
Before we talk about asset price deflation, let’s review what happened before 2022.
Most financial assets benefited enormously from the Fed’s hugely gratuitous efforts to support, sustain and reinflate prices after the 2020 collapse and the ensuing forced economic shutdown.
From the article Gold Market Manipulation And The Federal Reserve…
“Long-side investors in all assets, including precious metals, ‘benefited’ from the manipulative efforts of the Federal Reserve twelve years ago and again just recently.
The recent recovery in prices for stocks, bonds, oil, gold, and silver has been almost unbelievable. It is literally jaw-dropping…” June 28, 2020
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Monday, July 11, 2022
Stocks Bear Market Rally Last Gasp Before Earnings Season / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Before I get started with my stock market analysis here is my take on the political assassination of Boris Johnson, who was stabbed in the back Thursday by so called colleagues Julius Caesar style by a Tory party that effectively committed electoral suicide. Britain demonstrates the illusion of democracy where we vote one person and his party in who soon gets replaced with a waste of spacer that the electorate did not vote for! A loss of a PM for any reason should automatically trigger a general election.
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Saturday, July 09, 2022
How to Prepare for a Hard-Hitting Stocks Bear Market (Think 1929-1932) / Stock-Markets / Stocks Bear Market
By: EWI
This metric of bullishness is higher than it was at the top of the dot-com mania
An important step in preparing for a historic bear market is to embrace cash or cash equivalents.
This may seem obvious, but even with the stock market in a downtrend, cash is shunned by many an investor -- retail and professional. Many of these investors believe the bull market will resume -- sooner rather than later.
As the May Elliott Wave Theorist, a monthly publication which analyzes financial markets and major cultural trends, noted:
The percentage of assets dedicated to equities in American Association of Individual Investors members' portfolios remains near a bullish extreme. ... They think a "correction" is in force but not a bear market.
So, AAII members have been holding more stocks than cash.
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Thursday, June 30, 2022
Stock Market Turning the Screws / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 duly paused yesterday but the (beyond very short-term) outlook remains as bearish as before. Bonds agree, but in the interests of real assets, I would have preferred to see stronger performance by miners and oil stocks. This suggests the next downleg in the stock market would affect precious metals and commodities as well. Some relative resilience (especially in gold) is there but won‘t be enough to change the neutral to bearish outlook in the least. As always in this tightening period (Treasuries keep the pressure and USD is rising), copper (with silver) are to suffer the most. Cryptos – that‘s the same story. It‘s only in oil where I expect the bulls to put up a good fight – the spike didn‘t happen yet, and once oil stocks decouple again from the general stock market, it would be easier. For today, I look for a strong day in the red across the board – good for open profits in stocks and cryptos.
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Thursday, June 30, 2022
How to Ignore Stocks (and why you should) / Stock-Markets / Investing 2022
By: Stephen_McBride
I know it’s hard to take your eyes off the market…
It’s like watching a slow-motion car crash.
Everyone, not just finance folks, is chatting about the declining stock market. My wife called me, joking she was returning some items to save money.
If you’re like most investors, you’ve probably been fixated on stock prices lately.
Today, I’ll show you why that’s a mistake.
Instead, you should focus on the single biggest driver of stock market returns, which I’ll share in a moment.
Tuesday, June 28, 2022
This “Bizarre” Chart is Wrecking the Stock Market / Stock-Markets / Stock Market 2022
By: Stephen_McBride
nflation just keeps getting worse…
The cost of heating your home has doubled over the past year.
Want to take a summer vacation? That airfare will cost you 50% more than last year.
Whose fault is this?
It’s easy—and partially correct—to blame the US Government and the Fed. After all, they showered Americans with big stimulus checks and generous unemployment benefits, then held interest rates at zero.
But as I’ll show you in this essay… that’s an incomplete explanation.
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Monday, June 27, 2022
Stock Market Watching Out / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 squeeze aka overdue relief rally in the end developed, on sharply improving daily momentum and quite supportive bonds. Would that change the medium-term picture though? It would serve only to suck in bulls, thinking the bottom is in – while the Fed doesn‘t have the stock market‘s back, and the reprieve in market-requested tightening, would pass. The recent decline in oil prices coupled with Fed acknowledgement of some real economy difficulties, isn‘t enough for taming inflation. While prices would moderate their pace of increases, the appreciation in essentials would be unstoppable and to a large degree immune to the real economy staring at a very late 2022 / early 2023 recession (if one wouldn‘t be declared soon because of all the tightening).
Whether Powell goes 50bp or 75bp in July, will be quite indicative – I‘m not excluding hawkish (75bp) September either. The gas and energy measures are of stopgap nature, yet buying a little time for the Fed. Should the central bank not take the opportunity to tighten more, the decision would backfire down the road – just as the transitory talking point did. For now, less tight conditions (driving sentiment) would help stocks make it to the 4,000s probably – but the sell, the ambush is hanging in the air, and would take us to 3,500-3,600 target in my view (the bottom). Both value and tech kicked in on Friday but the dollar isn‘t retreating, money is still sitting on the sidelines.
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Thursday, June 23, 2022
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Everyone and their grandma has been eagerly awaiting a big bear market bounce since at least the start of May that has repeatedly failed to materialise, why? It's because everyone and their grandma has been expecting a big market rally that's why! Here's another update on the state of the AI stocks portfolio in advance of finalising my 3 YEAR US house prices trend forecast.
My bear market expectations remain for the Dow to target a trend to 29,600 due to be achieved during August / Early September for an approx 20% top to bottom bear market target.
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Thursday, June 23, 2022
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks / Stock-Markets / Stock Market 2022
By: P_Radomski_CFA
By raising interest rates, the Fed poured cold water on the red-hot markets and finally chilled investors' enthusiasm. What's next for asset prices?
Work in Progress
With the Fed’s hawkish hammer pounding the financial markets, the selling pressure coincided with events unseen since 2008. Moreover, with the work in progress to reduce inflation poised to push asset prices even lower, I’ve long warned that we’re likely far from a medium-term bottom. For example, I wrote on May 31:
With recession fears decelerating and optimism returning to Wall Street, the bulls are brimming with confidence.
Thursday, June 23, 2022
No Dodging the Stock Market Bullet / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 recovered from the intraday reversal to the downside, thanks to tech. Value‘s poor showing can be chalked down to the riskier junk bonds losing early gains, meaning the daily stock market move didn‘t surprise much when bonds closing values are considered. What‘s though flying under the radar, is the turn in Treasury yields – a couple of days after FOMC, bonds are having second thoughs, and aren‘t pushing the Fed to raise too steeply. Anyway, I wouldn‘t be surprised to see 75bp hike in July, to be continued with a few more 50bp hikes then. Coupled with the balance sheet that‘s about to shrink, that would finally start denting inflation – at the cost of real economy growth.
I say growth while I was looking for a Q1 GDP print to come in negative, and Q2 GDP would turn lackluster as well. Still, a full-fledged recession in the usual sense of the word (the consequences), won‘t hit until very late 2022 even though NBER might declare one (based also on unrelenting inflation data) earlier. All the typical signs are in – we had yield curve inversion, oil prices doubled in a relatively short amount of time, and inflation is entrenched above 5%. Whatever the Fed does – and it‘ll do a lot – inflation in essentials won‘t be dented all that much. There‘s no dodging the bullet in my view, and the markets would gradually go from living the soft landing fantasy to readjusting to the hard landing reality to come.
Tuesday, June 21, 2022
The Fed is Incompetent - Beware the Dancing Market Puppet / Stock-Markets / Financial Markets 2022
By: The_Gold_Report
Expert Michael Ballanger reviews this week's market updates from Wednesday's FOMC meeting to his outlook on Getchell Gold Corp., which he maintains is a "pound-the-table Buy."
Firstly, if Wednesday’s FOMC meeting featuring Chairman Jerome (I have tools!) Powell did nothing else, it did accentuate just how incompetent they are. Powell stood in front of the cameras and told the world that the American economy was “strong” while one of his own branches, the Atlanta Fed, reported just a day earlier that growth had slowed to 0.00%, which is anything but “strong.”
“Stocks are super-unattractive when the Fed is loosening tightening and interest rates are falling rising. Don’t fight the Fed.”
— Legendary Fund Manager Marty Zweig
As the afternoon wore on, stocks moved higher thinking that the .75% rate hike to be followed by more .75% rate hikes throughout the year (targeting Fed Funds at 3.5%) should be seen as a bullish signal. Reductions in the Fed balance sheet assets and sharply rising rates are about as far from a bullish signal as one can get, so in the last hour, a 600-point Dow rally became a 300-point uptick setting the stage for today’s wake-up call, and 741-point slide.
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Monday, June 20, 2022
AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? / Stock-Markets / Tech Stocks
By: Nadeem_Walayat
Dear Reader
The stocks bear market continues with most AI tech stocks putting in new bear market lows during the past week, with key exceptions being Facebook and AVGO. Whilst Apple, Microsoft and Nvidia were the weakest stocks of the week, though all stocks rallied strongly Friday led by AMD which ended the week up 10% followed by Micron at +6% which are definitely two stocks to aim to accumulate during any further market weakness.
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Sunday, June 19, 2022
Will Global Markets Be Pushed Deeper Into Crisis Event By The US Fed? / Stock-Markets / Stock Market 2022
By: Chris_Vermeulen
US and Global markets recoiled from the higher inflation/CPI data last week. The US Fed raised interest rates by 75pb on June 15. The Fed also warned that other, more aggressive rate increases might be necessary later this year. Before the Fed decision, global markets opened on Sunday, June 12, and quickly started selling downward. US Indexes sold off on Monday, June 13, by more than 2.5% almost across the board. A brief rally after the Fed decision seems to have evaporated in early trading on Thursday, June 16.
It is clear that global markets expected inflation to stay elevated but were hoping for some moderately lower data showing the recent Fed moves had already dented some inflation concerns. Now, it appears the US Fed has its backs against a wall and moved rates aggressively higher to stall inflation (and possibly destroy global asset values). From my perspective, this is unknown territory for the US Fed and Global Central banks. That means traders should expect increased volatility and the possibility of a very determined reversion of price over time.
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Wednesday, June 15, 2022
State of the Stocks Bear Market / Stock-Markets / Stocks Bear Market
By: Nadeem_Walayat
Stocks put in a bottom of sorts Friday, but this is NOT THE Bottom where my existing view is to expect a Dow bottom during August at an approx level at 29,600, which is pending my next in-depth analysis. So 32,200 puts the Dow about 9% away from a probable bottom that would result in a 25% peak to trough bear market so we are about 2/3rds the way through this bear market in terms of price.
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Wednesday, June 15, 2022
The Dow Industrials’ Big 8-Wave Cycle is Incomplete / Stock-Markets / Stock Market 2022
By: EWI
"We finally understand our full Elliott wave position"
The Wave Principle's basic pattern includes five waves in the direction of the larger trend, followed by three corrective waves, as illustrated in both bull and bear markets below:
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Monday, June 13, 2022
Dow Stocks Bear Market Forecast Trend Trajectory / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Following a false break lower on 20th of May the stock market has managed to unwind some of what was an extremely oversold state, In fact that is 2 false breaks in a row on the Dow chart (red circles). Still the rally is galvanising many to start fantasising that the bottom is in when at the end of the day it is what it is a bounce from a very over sold state and thus a bear market rally that faces a lot of head winds when one considers all those who were buying stocks for a good month between Dow 34,250 and 35,250, who will now be eager for a chance to lighten their load on a rally back into their break even price zone which suggests that this bear market rally will terminate long before the Dow gets anywhere near 34,250 so I don't see much upside both in terms of price and time for this rally.
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