Analysis Topic: Stock & Financial Markets
The analysis published under this topic are as follows.
Tuesday, June 07, 2022
The Horns of Fed‘s Inflation Dilemma / Stock-Markets / Financial Markets 2022
By: Monica_Kingsley
S&P 500 gave up Thursday‘s gains much too easily – not even the short window of opportunity gets acted upon. Medium-term trend is winning – stocks will roll over to a fresh downtrend, it‘s a question of time. Bonds aren‘t offering too much of a reprieve – the 10-year yield didn‘t even decline below 1.70% when testing below 1.50% was doable. This merely highlights the brief time window for CPI inflation to make a peak – before raising its head once again. Commodity price inflation isn‘t going to be tamed, and Friday‘s non-farm payrolls have been a last good figure before we see further deterioration. As I wrote that Q1 GDP could very well be negative, the same goes for Q2 GDP – I‘m counting with stall speed.
For now, each upcoming Fed meeting till September, has 50bp rate hike priced in. The question remains what happens after September – would the Fed pivot already? Crude oil prices could be more than easing by that time, if you know what I mean. The focus would have shifted from inflation to economic growth support – that would be the drumbeat of the day. Precious metals are to be the first to anticipate the next dovish turn (backing off tightening), and that moment could happen later in summer. The copper upswing is likely to continue, and factors beyond China and supply with stockpiles, continue to speak against a deeper downswing. It‘s a bit similar to the realization that not even the OPEC+ production increase would be enough to satisfy world demand.
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Saturday, June 04, 2022
Stock Market Rally on Borrowed Time / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 was indeed building a bull flag, which „must“ now continue with a fresh upleg so that the formation is validated. Odds are that in spite of the tech-led upswing, the rally would continue. All that‘s required for today, is a not too disappointing non-farm payrolls figure, which would (in the market‘s mind) give the Fed some leevay in taking on inflation while not choking off economic growth (however decelerating). Optimal outcome would be a figure somewhat below expectations as that would enable speculation as to how far the Fed would move towards focus on growth (the Brainard view of things) and away from Powell‘s resolute (verbally resolute, to be precise – big difference) inflation fighter pose. Yesterday‘s Yellen admission on getting it wrong, is a preview of more hawkish monetary policies still ahead.
That‘s why I‘ve said that this rally wasn‘t sustainable, but it still has further to go. Treasuries aren‘t relenting in the pressure on the Fed to act, and the central bank would have to catch up. It‘s a question of time when this risk-on reprieve runs its course. Yesterday‘s turn in precious metals and copper is a preview of what such a Fed turn would imemdiately cause – helping the open positions mightily. And I‘m not even talking the sizable open profits in crude oil...
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Friday, June 03, 2022
What to Make of the Stock Market’s Bounce / Stock-Markets / Stock Market 2022
By: EWI
"“For certain, there will be countertrend rallies"
The stock market selloff from March into the May low was comprised of eight straight weeks of decline in the Dow Industrials.
This was historic. The Dow Industrials have been around for 126 years and this was only the second time that the senior index suffered a decline for eight consecutive weeks. The other time was in 1923 -- also March into May.
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Thursday, June 02, 2022
Stocks Bear Market Bubble Trouble / Stock-Markets / Stocks Bear Market
By: The_Gold_Report
As month five of this bear market comes to an end, expert Michael Ballanger goes over some bear market stories that left him with battle scars and provides some insight on what to expect in the months ahead.
Month five of the Great 2022-202? Bear Market is almost complete so I thought you all might wish to hear a few “war stories” from past bear markets, some of which I endured while none of which I even vaguely enjoyed. First, I offer the MJB “primer”…
“The key to long-term profits on Wall Street is not making big killings; it’s not getting killed.”
—Daniel Turov
At the bottom of bear markets (or at the start of bull markets), stocks are like moored boats at low tide, resting on the sand desperately in need of the resurgent surf.
As markets turn, it is analogous to the tide roaring in and when it does, it lifts all boats, big and small, and it doesn’t care whether a vessel is leaking or whether it is tight. Warren Buffett coined a phrase that perfectly describes how bear markets expose flawed business models in heavily-pumped companies when he said, “Bear markets are like the tide going out; you soon learn who is swimming without trunks.”
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Thursday, June 02, 2022
Stock Market Hits Stall Speed Before Running / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 could still be building a bull flag on the daily chart, followed by an upswing tomorrow on non-farm payrolls. Who knows what kinds of adjustments would show that the real economy isn‘t decelerating all that badly? Markets might even conclude the contraction bullet would be avoided, and that the Fed won‘t need to go all in against inflation consequences be damned. Wrong, because if you look at Treasuries, the pressure on the Fed to raise (and dramatically so), is on – the dollar is turning up already on the prospect of higher yields. CPI inflation might have (temporarily) peaked, but inflation expectations (as measured by both the bond market and the respective ETF) haven‘t yet.
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Wednesday, June 01, 2022
Stock Market Risk-on Run / Stock-Markets / Stock Market 2022
By: P_Radomski_CFA
S&P 500 didn‘t waver much even though credit markets did – the risk-on sentiment in stocks goes on even when faced with a dollar upswing (which was sold into). The defensive slant to the S&P 500 gains is evident as tech did better than value – and even energy stocks got hurt. This is short-term concerning for the oil bulls, but it would be premature to close the profitable longs just yet (even if short-term challenges would remain).
Precious metals are acting weak – the daily rise in yields and the dollar hurts. Second half of the year would be the best time for gold and silver as the focus shifts from (temporarily peaking) inflation to the inevitability of backing off tightening (turning accommodative again even) – till then, I‘m looking for lean weeks ahead, and that goes for copper as well. Crude oil remains supported by geopolitics, CRB Index continues trending nicely higher, and the threat of recession isn‘t breaking them.Notably, the market pressure on the Fed to raise, has slowed to a standstill in May – and that would support real assets going forward in the mid-term increasingly more.
Let‘s move right into the charts (all courtesy of www.stockcharts.com).
Tuesday, May 31, 2022
Stock Market Game Plan Ahead / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 did fine on Friday as well, and the long streak of weeks in red, is over (for now). The rally would continue for quite a while longer – after all, we indeed got the sign inflation made its peak with the May data. Also right on schedule, the top in yields came – coupled with some retail earnings, personal income and PCE data, the stock market rally could proceed. And it has further to go, quite further to go – before peaking and rolling over to fresh lows. Yes, I don‘t think we‘re looking at a fresh uptrend, there is still much stress (to be reflected in stock prices) in the consumer arena.
For now, the key question is the degree to which VIX calms down – would it be able to keep below 23-24 to extend the shelf life of this rally? And for how long would the lull in volatility last? I think the answer is a few short weeks, before it becomes obvious that the fundamentals haven‘t changed. The consumer remains in poor shape, inflation would remain stubbornly high (even as it had indeed peaked), and the credit default swaps for quite a few (consumer sensitive) companies are rising relentlessly, which isn‘t yet reflected in underlying stock prices. I‘m talking financials too – this broad stock market rally has more than a couple of percent higher to go before the weight pulls it back down, and earnings estimates get downgraded again.
In short, this is a false dawn, but it would feel like a fresh dawn. Counterintuitively, it would be accompanied by retreating yields – regardless of the persistent inflation. Remember also my words that the Fed won‘t be able to engineer a soft landing this time, I‘m not counting on that – the conditions are so much different macroeconomically now than they were in the mid-1990s, which was the last time they could pull it off. Just ask yourself how much slack in the job market is there, what about the peace dividend now and prospects for the brighter aspects of globalization. No, I‘m not buying that – this reprieve would give way to a fresh stock market downleg, manufacturing growth would crawl to a standstill, and that‘s when the central bank would be forced to back off tightening.
Sunday, May 29, 2022
Stock and Bond Markets Relief Rally / Stock-Markets / Financial Markets 2022
By: Gary_Tanashian
As inflation signals cool, various markets get relief
Whether a bounce or something more extended, a bear market rally was bound to get off the ground sooner or later. It was a matter of time, with stock market sentiment this over-bearish.
Here is how the US Stock Market segment led off last weekend in NFTRH 706:
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Sunday, May 29, 2022
Global Financial Elite in Davos Lust for New Powers / Stock-Markets / Financial Markets 2022
By: MoneyMetals
As global elites met in Davos this week to discuss their latest plans for a Great Reset, ordinary investors are hoping for a great rebound in their portfolios.
The stock market did finally bounce after suffering several consecutive weeks of losses. Whether it’s a just a short-lived relief rally or the start of something bigger remains to be seen.
The U.S. Dollar Index may also be gearing up for a run, but to the downside. After moving higher against foreign currencies for most the year, the dollar is now declining for a second consecutive week.
Dollar weakness helped support a modest rise in gold and silver prices.
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Sunday, May 29, 2022
Why the Timing of the Next Economic Slump May Surprise Big Time / Stock-Markets / Stock Market 2022
By: EWI
"The stock market leads GDP," not the other way around
Do you recall how many government officials, economists or bankers anticipated the severity of the "Great Recession" before late 2007 into 2009?
Do you recall even one?
If a name doesn't come to mind, that's because hardly anyone of prominence provided a warning. Indeed, just the opposite.
Here's a March 29, 2007 NBC News headline:
U.S. economic growth revised up
Granted, this view by a group of economists was early in 2007, but still -- a historic stock market top was then only six months away and the start of the Great Recession was only eight months down the road.
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Saturday, May 28, 2022
Sell the Stocks Bear Market Bounce / Stock-Markets / Stock Market 2022
By: Michael_Pento
Bear market bounces are violent yet short-lived. The latest excuse for an oversold rally was provided by JP Morgan's Jamie Dimon. The bank's CEO stated at Morgan's Investor Day Conference on Monday, May 23rd, that the US economy remains strong despite gathering storm clouds. He said, "I'm calling it storm clouds because they're storm clouds. They may dissipate." This was indicative of the typical vapid speech of the optimistic bank CEO. While he was at it, he also raised the bank's outlook for Net Interest Margin at the bank's conference, causing the usual parade of Dimon groupies to celebrate with orgasmic delight about his confidence in the economy.Perhaps Dimon is compelled to do his impression of PT Barnum because shares of JPM have lost 30% of their value so far this year. But before you believe Dimon is some economic oracle, listen to what he predicted about US economic growth on Jan. 11th when he publicly proclaimed his 2022 outlook, "We're going to have the best growth year we've ever had this year, I think, since maybe sometime after the Great Depression." He said this during a quarter that would later show to have shrunk at a 1.4% annualized rate. And that bad economic data didn't cease at the end of Q1. S&P Global US Composite PMI Output, which tracks the manufacturing and services sectors, fell to a reading of 53.8 in May, from a 56.0 reading in April, which means the economy is fast approaching contraction territory in Q2. A slew of manufacturing PMIs also supports the view that the US and, indeed the entire global economy is faltering. The plunging numbers on home purchases and refinancing activity indicate danger is ahead. Nevertheless, despite a parade of sharply declining economic data, the financial media is promoting the view of Wall Street analysts that earnings growth is actually going to be robust this year and next.
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Friday, May 27, 2022
Stocks: Is the Really Scary Part Just Ahead? / Stock-Markets / Stock Market 2022
By: EWI
Here's one of the actions which investors take when they get "rattled"
Big daily selloffs have occurred since the stock market's downtrend began in January.
For instance, on May 18, the Dow Industrials closed lower by 1,161 points -- a 3.6% drop. The S&P 500 shed 4% on the same day.
Yet, most investors aren't exactly shaking in their boots. Panic is absent.
After the market close on May 18, the U.S. Short Term Update, a thrice weekly Elliott Wave International publication which analyzes near-term trends for major U.S. financial markets, showed this chart and said:
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Saturday, May 21, 2022
Why APPLE Could CRASH the Stock Market! / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Dear Reader
The earnings bloodbath materialised, that started on Tuesday with Google trading down to $2265, and ended on Friday with Amazon plunging down to a new low of $2425. With the two 'cheap' stocks Qualcom and Facebook rallying strongly post earnings. Virtually everything went according to the script of my last article i.e. "we could see Amazon trade to well under $2500, probably into the $2450 to $2300 support zone". The only odd one out was Apple that refused to budge much from $160, where my expectations remain is headed to below $142.
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Tuesday, May 17, 2022
What Should We Do If There Is No Fed Monetary Policy Pivot? / Stock-Markets / US Federal Reserve Bank
By: The_Gold_Report
While investors may have been betting on a Fed pivot, expert Michael Ballanger analyzes where we may find ourselves if they don't.
As a young and very brash “stock salesman” in the early 1980s (Note: Back then, they did not call us “wealth managers” or “investment professionals” or “advisors.”), I discovered a newsletter writer that was the best storyteller I have ever read, and his name was Richard Russell. The author and founder of the 1958 “Dow Theory Letters,” he rose to fame after calling the bottom of the horrendous 1973-1974 bear market in December of the terminal year resulting in a bombardment of catcalls and peer-pressure ridicule. Nobody—and I mean NOBODY—expected that stock prices were going to do anything but continue to crater and that was what made him such a beast.
As we do our collective best to weather this storm of selling pressure in what started as tech stocks but which has now migrated to literally everything, I am reminded of one of the more poignant “Russell-isms.” He said, “In a bear market, he who loses the least, wins.”
“My losses have taught me that I must not begin to advance until I am sure I shall not have to retreat.” — Edwin Lefevre
That phrase is the major portion of the reason that I advised subscribers on January 7th of this year, with the S&P 500 clipping above 4,800, that capital preservation was our primary focus and that volatility would dominate the investment landscape in 2022.
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Monday, May 16, 2022
NASDAQ 100 Stock Market LOWER LOWS & LOWER HIGH / Stock-Markets / Tech Stocks
By: Chris_Vermeulen
Following and trading on price can be compared to the reading of a good book. As we read each page, we acquire additional information that may give us a better understanding of the unfolding story.
The same is true of the market, as each day is like the reading of another page. The pages of a book make up chapters. These chapters in trading represent bull markets, bear markets, distribution and accumulation, and time frames of high and low volatility.
Unfortunately, in trading, we cannot skip to the end of the book to learn how everything turns out. However, as traders, we have learned that studying and remembering the past can pay great dividends.
Trading price in its rawest form is simply plotting and studying price without the use of moving averages, stochastics, RSI, or other technical indicators. This simplified but often overlooked methodology can offer everything a trader needs to be successful.
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Friday, May 13, 2022
What Happens When the Stock Market Dip Keeps Dipping? / Stock-Markets / Stock Market 2022
By: EWI
These can "work tirelessly to keep investors trapped on the wrong side of a bearish trend"
It's been a rocky road for the Dow and the S&P 500 index since the start of the year. And, even longer for the NASDAQ, which topped back in November.
Indeed, speaking of technology stocks, some of the most popular names took a big beating in April alone. As the Wall Street Journal noted (April 29):
The FAANG stocks, consisting of the popular quintet of Facebook parent Meta Platforms, Apple, Amazon.com, Netflix and Google parent Alphabet, have collectively lost more than $1 trillion in market value [in April], the most since Facebook started trading in May 2012.
So, you might think that this bumpy ride in the stock market would have many investors at least considering moving to the sidelines, especially those with a sizeable nest egg to protect.
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Thursday, May 12, 2022
Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
The earnings bloodbath materialised, that started on Tuesday with Google trading down to $2265, and ended on Friday with Amazon plunging down to a new low of $2425. With the two 'cheap' stocks Qualcom and Facebook rallying strongly post earnings. Virtually everything went according to the script of my last article i.e. "we could see Amazon trade to well under $2500, probably into the $2450 to $2300 support zone". The only odd one out was Apple that refused to budge much from $160, where my expectations remain is headed to below $142.
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Tuesday, May 10, 2022
Take Advantage When Markets Succumb to Fear / Stock-Markets / Financial Markets 2022
By: MoneyMetals
Last Wednesday’s rate hike by the Federal Reserve failed to convince investors that the central bank can tame inflation without wrecking the economy.
Subsequent remarks by Jerome Powell insisting that the economy isn’t vulnerable to recession were also unconvincing – especially given the Fed chairman’s lousy forecasting track record (“transitory” inflation has proven to be more like intractable inflation).
The good news for gold holders is that the safe-haven metal is holding up better than conventional financial assets. Stocks are breaking down at the same time as purportedly “risk-free” Treasury bonds are collapsing in value at a rate never before seen.
Sentiment gauges are showing extreme pessimism among the public. Most say the country is headed in the wrong direction and give President Joe Biden terrible marks for his handling of the economy.
Monday, May 09, 2022
The Stocks Stealth BEAR Market / Stock-Markets / Stocks Bear Market
By: Nadeem_Walayat
Dear Reader
The stock market continues to trend in line with my expectations for an mid April higher low that I am sure will be accompanied by maximum fears of a CRASH to NEW bear market lows, which without any road map would be ones natural instincts to expect, i.e. most market commentators tend to be bullish AFTER stocks have gone up and BEARISH AFTER stocks have fallen. Instead with a road map, I am not seeing any reason to not continue to expect stocks to bottom and then rally strongly into May and thus I wll continue accumulating target stocks as and when opportunities arise over the coming week whilst most will kick the can down the road out of fear of new lows.
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Saturday, May 07, 2022
Global Market Perspective Test-Drive - Dial In Your View of 50+ Global Markets / Stock-Markets / Financial Markets 2022
By: EWI
Hi,
You might agree that so far, not much about this year has been "normal."
- Normally, commodity prices don't leap to the moon
- Stocks don't sell off this hard in April
- And European countries don't engage in brutal wars
All of that to say: It's time to stop thinking "normal," and start thinking "new."
For that, you can't do better than Elliott waves. Just look at these 8 "before/after" charts from Global Market Perspective, a monthly publication by our friends at Elliott Wave International.
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