Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stocks Bull Market - We Have Some Bad News

Stock-Markets / Stock Markets 2015 Oct 02, 2015 - 07:00 PM GMT

By: Casey_Research

Stock-Markets

By Justin Spittler

The stock market just finished a brutal third quarter…

The S&P 500 fell 8%...and so did the Dow and the NASDAQ. It was the worst quarter for U.S. stocks since 2011.


Stocks around the world dropped too. The MSCI All-Country World Index, which tracks 85% of global stocks, also had its worst quarter since 2011. The STOXX Europe 600 Index, which tracks 600 of Europe’s largest companies, fell 10%. It was the worst quarter for European stocks since 2011 as well.

China’s Shanghai Composite fell 28% last quarter, its largest quarterly decline in seven years. The MSCI Emerging Markets Index fell 19%. It was the worst quarterly decline for emerging market stocks in four years.

In total, last quarter’s selloff erased nearly $11 trillion in value from stocks around the world.

•  Casey Report readers know this is part of our “script”…

In the latest issue of The Casey Report, E.B. Tucker called the end of the six-year bull market in U.S. stocks that began in 2009:

We believe the era of asset prices soaring on a wave of easy credit is over. Last month’s major stock market decline is the start of a very tough time for stocks and the economy…

Regular readers know the Federal Reserve’s response to the last financial crisis was extraordinary. The Fed cut its key interest rate to effectively zero in December 2008…and it’s left it there ever since.

The Fed made it ridiculously cheap to borrow money. Consumers borrowed to buy homes they would never be able to afford in a “normal” economy. Property developers borrowed to build new houses. And investors borrowed to buy stocks.

Easy money allowed a buying binge that sent prices soaring. Many asset prices have completely lost touch with reality. We recently explained how U.S stocks are roughly 50% more expensive than their long-term average, according to a popular valuation metric called CAPE.

•  Many currencies also had a horrible quarter…

As a group, Asian currencies had their worst quarter since the 1998 financial crisis. The Malaysian ringgit fell 14% against the dollar. And the Indonesian rupiah fell 9%.

On top of that, emerging market currencies as a group hit their lowest level since 2002. The Brazilian real lost 23% during the third quarter…the Russian ruble lost 16%.

Regular readers know commodities have not been spared from the bloodbath

The Bloomberg Commodity Index, which tracks 22 different commodities, had its worst quarter since 2008. It fell 15% and is now at its lowest level since 1999. Wheat, lumber, and oats each fell more than 17%.

Oil was hit the hardest. It had its worst quarter since 2009. A barrel of oil now costs 26% less than it did three months ago…and 50% less than it did a year ago.

•  Regular readers know China’s slowing economy is a big reason for the commodities selloff…

China is the second largest economy in the world. It’s also the largest commodity consumer. China consumes half of the world’s aluminum, nickel, copper, steel, and coal.

China also consumes 60% of the world’s concrete. Last December, Microsoft founder Bill Gates pointed out that China poured more concrete between 2011 and 2013 than the United States did during the entire 20th century.

But now, China is growing at its slowest pace in 25 years. That means it’s building fewer buildings, roads, and bridges. So China doesn’t need as much steel, aluminum, concrete or other “building block” commodities.

This is hurting countries that rely heavily on commodity exports to keep their economies going…like Australia, New Zealand, and Canada. The Australian dollar, the New Zealand dollar, and the Canadian dollar have each lost more than 16% against the U.S. dollar since last September.

•  With financial markets around the world looking extremely fragile, “Dr. Doom” says the “U.S. could be on the verge of an economic collapse”…

Marc Faber is one of the world’s most respected contrarian investors. He predicted 1987’s Black Monday, when the Dow lost an incredible 23%. It was the worst day in the history of the U.S. stock market. Faber also predicted the Asian financial crisis of 1997-1998.

Faber’s knack for calling huge crashes has earned him the nickname “Dr. Doom.” Now he thinks the recent selloff in U.S. stocks could be the start of something very dangerous. He’s been warning investors about a coming crash for months.

During a July interview with CNBC’s Trading Nation, Faber said the market was beginning to crack. It was a bold call…at the time, U.S. stocks were still near all-time highs. But Faber predicted U.S. stocks were going to plunge: “In the U.S., the market could easily drop 20 to 40%, easily.”

The next month, the S&P 500 lost 11% in six days. And, for the first time in four years, the U.S stock market entered a correction. (A correction is when an index falls 10% from a previous high.)

Faber also said the U.S stock market was in “a stealth bear market.” And he listed a few reasons stocks could keep falling:

….the valuations, as you know, are relatively high. And we have numerous other problems in the world: [including] excessive debt loads in the most advanced economies; slowing down Chinese economy that, in my opinion, will go into recession; and collapsing commodity prices, especially on the industrial side.

•  Faber had simple advice for investors...

He said it’s time to get defensive. And he urged every investor to have “some money outside the financial market and outside the financial sector.”

Like us, Faber thinks gold is the best defense during a market collapse…the ultimate form of financial wealth insurance.

Later this month, Faber will join us at the 2015 Casey Research Summit. At the Saturday night banquet dinner, attendees will have a chance to eat dinner with Dr. Doom himself. If you sit at Faber’s table, you can pick his brain about where the economy and stock market are headed while sharing a meal and a glass of wine.

And if you don’t sit at Faber’s table, you can sit with one of the other investing legends who will be there…including multi-millionaire entrepreneur James Altucher, famous trend forecaster Gerald Celente, and of course, Doug Casey himself. Not to mention senior Casey Research editors like Louis James, Bud Conrad, and E.B. Tucker.

The Summit is only two weeks away…on October 16-18 at the five-star Loews Ventana Canyon Resort in Tucson, Arizona. We hope you can join us, but you have to act soon…Click here for more information on the 2015 Casey Research Summit.

The article We Have Some Bad News was originally published at caseyresearch.com.
Casey Research Archive

© 2005-2019 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