Posts On Market Update

Selling Stampede

Stock market volatility has returned and in grand fashion. As of this post, the broad market SP500 is down over 42 points, or 2.12 percent. The markets opened sharply lower this morning following the shortest trading day in Chinese equities in history. Chinese stocks opened last night and dropped significantly right off the bat. For not the first but the second time this week, circuit breakers were triggered to halt trading… In fact, trading lasted for only about 30 minutes before being halted. The slide... Continue Reading

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What will happen when the Fed finally raises interest rates?

On December 16th, it is expected that the Fed will begin raising interest rates. That move, we believe, will have a far greater impact than what may seem logical from a small .25% hike. And simply looking at the size of the rate hike may be misleading. What should be considered instead is the length of time that interest rates were kept at 0%, and the tremendous distortions and imbalances that have been created as a result. Have we become addicted to the medication? Will... Continue Reading

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The Possible Effects of a Weaker Dollar

The mighty dollar is not as mighty as it once was. Going back to the mid-1980s, the dollar index has lost about half of its value. HALF… Not only does the chart of the dollar index over the past three decades paint a bearish picture for the currency, but recent moves by other nations to move away from the greenback are also adding to bearish sentiment. While the dollar has enjoyed a long run as king of currencies and the reserve currency of choice; that... Continue Reading

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Is It All About the Fed Now?

After a crazy week of trading in global equity markets, things seem to have calmed down significantly-at least for now. Of course, if Chinese stocks fall several percent Sunday night, then U.S. markets could potentially be in for another difficult Monday. Aside from recent equity market volatility, markets may once again focus on interest rate expectations. The next FOMC meeting is now less than three weeks away. While the Fed had previously indicated that any changes in rates would likely be a game-time decision, expectations... Continue Reading

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Market Volatility and the Real Culprit

Markets have been on a roller coaster ride in recent days. Following a massive sell-off in Chinese equities on Monday, U.S. markets opened the week to what can only be described as financial bloodshed. The Dow Jones, for example, saw its biggest single day decline ever and was down nearly 1100 points at one point in the session. Much of the financial media has been focused on economic weakness in China and the volatility that has been seen in Chinese equities. And rightly so. As... Continue Reading

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Ouch

The U.S. stock market witnessed massive selling for the second day in a row as investors continue to run for the exit signs in droves. The broad market SP 500 index saw losses today to the tune of over 3 % and closed 64 points lower, while the Dow Jones Industrial Average was hammered for a loss of over 530 points. Concerns over a global economic slowdown and plunging emerging market currencies have been cited by some media outlets as the cause of the selling,... Continue Reading

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Is Gold Attractive At Current Levels?

Much has been said about the elevated levels of the US stock markets in recent months. Stocks have glided effortlessly to new all time highs even as economic troubles persist and the global economy shows signs of weakness. The Fed’s loose monetary policy combined with other central bank stimulus measures have clearly been the key drivers of lofty equity prices. This makes perfect sense. After all, the Fed has held interest rates at zero for 6 plus years while pumping billions of dollars into the... Continue Reading

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Monetary Policy Matters Not

  A lot has been discussed in recent months concerning the Fed and its potential plans to begin hiking interest rates. One week the Fed is seemingly on hold, the next week the central bank is getting ready to hike. During this see-saw discussion of the beginning of the tightening cycle, the Fed has consistently stated that any decision with regards to interest rates would be “data dependent.” The equity markets are now in an absurd state of uncertainty. A bad piece of economic data... Continue Reading

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IS GOLD ON THE VERGE OF A BREAKOUT?

As we have stated regularly for some time now, the global financial landscape appears to be headed for some significant changes. These changes may affect how investors look at various financial markets and may be the catalyst for a large shift in both investor allocation and sentiment. What are some of the issues we are referring to? There are several noteworthy issues in play right now that may significantly impact financial markets. Here we will briefly outline just a few, and discuss why these issues... Continue Reading

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Are Stocks Ready to Tumble?

Stocks are under some pressure recently as the risk of a Greek default and the notion of higher interest rates take their toll on investor sentiment. The question is: Is recent weakness seen in equities simply another pullback or is it indicative of more volatility and lower prices to come? Like anything else in life, different investors will have different opinions on this. We do believe, however, that the stock bears do have a case. Stocks are now in the seventh year of the rally... Continue Reading

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