Tag Archive: Fed

How About 55% Declines for Stocks?

Love him or hate him, President Trump has accomplished a great deal in his first two years in office. Stocks are near record highs, unemployment is near a 50-year low and the economy is seeing real growth. Trump, who has never been one to shy away from voicing his opinions, and he recently tweeted: ‘Had the opposition party (no, not the Media) won the election, the Stock Market would be down at least 10,000 points by now. We are heading up, up, up!’ – President... Continue Reading

Don’t Say You Weren’t Warned

The last several weeks have seen developments on multiple fronts that could potentially shape the next major market meltdown. The Fed’s reluctance to continue shrinking its balance sheet must be at the top of the list. The writing on the wall has never been clearer: Stock markets cannot maintain current levels and wouldn’t have gotten here in the first place without the massive stimulus efforts of the Fed. In other words, stocks are currently trading at “artificial” levels. Stock valuations have not reached current levels... Continue Reading

Does the Fed Have Any Credibility Left?

The Federal Reserve has demonstrated that it is incapable of weaning the stock market off Fed-stimulus. This begs the question of whether the central bank has any credibility left as an inflation fighter and independent institution. The central bank began “treating” the market years ago. The Federal Reserve began with an initial round of QE, and when that didn’t work, it proceeded to provide additional injections in the form of QE2 and later QE3. Even that wasn’t enough, and the Fed was also forced to... Continue Reading

Another Week Another Fed Meeting

Another Week Another Fed Meeting After finally breaking through key resistance around the $1,300 area last week, the gold market is taking a bit of a breather in early action today. The market appears poised for further upside, and a solid close above resistance or several consecutive closes above could add credibility to the recent breakout. The market will have numerous issues to contend with this week, including the end of the government shutdown, corporate earnings and the Fed meeting on Wednesday. Gold may see... Continue Reading

Fed Chief Jerome Powell Acknowledges Debt Problem

The U.S. is running massive deficits as the nation’s indebtedness continues to grow. Speaking at the Economic Club of Washington D.D., Fed Chairman Jerome Powell recently acknowledged the issue. In a piece by cnbc.com, Powell was quoted as saying “I’m very worried about it. From the Fed’s standpoint, we’re really looking at a business cycle length: that’s our frame of reference. The long-run fiscal, nonsustainability of the U.S. federal government isn’t really something that plays into the medium term that is relevant for our policy... Continue Reading

Risk is to the Upside

When it comes to managing investments, risk management is everything. Knowing the potential risk on any position is imperative to success. Risk is not always to the downside, however, and oftentimes markets will exhibit behavior that warrants upside risk. The gold market may currently be displaying such upside risk. After spending much of 2018 probing the recent lows, the selling pressure eventually began to run dry. Try and try as they might, the bears were simply unable to push prices to significant new lows. In... Continue Reading

Markets Sharply Higher as Trade Tensions Ease

The highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping took place over the weekend at the G20 meetings in Argentina. The two leaders had an opportunity to discuss trade and a range of issues, and reportedly came to an important agreement. The two nations effectively called a cease-fire over further tariffs that were set to be initiated on January 1st, 2019. The agreement was certainly progress considering little headway has been made in recent months. Whether the two countries can... Continue Reading

Is the Fed Starting to Backtrack?

Rising interest rates have been the topic of considerable debate in recent months. The Fed has been sticking to its plan of gradual rate hikes while the benchmark 10-year note yield is solidly above the 3% level. Higher rates have not gone unnoticed, with everyone from President Donald Trump to Mad Money host Jim Cramer weighing in. Stock investors have also made their opinion clear, with recent declines and increasing volatility being largely blamed on higher rates. So far, the Fed has stuck to its... Continue Reading

Trouble Brewing

The last several weeks have seen a very noticeable difference in risk appetite and market dynamics. Stocks have begun to show some significant signs of cracking as volatility has broken out to the upside. For stock investors, the last several weeks could simply be a small taste of more to come. Indeed, the market has covered a lot of ground over the last decade and could have a long way to fall if fundamentals continue to deteriorate. The next major potential catalyst for another leg... Continue Reading

Time to Buckle Up

The past week has seen an enormous increase in stock market volatility. In just two sessions, the Dow Jones Industrial Average shed nearly 1400 points, and the NASDAQ officially entered correction territory on Thursday. The sharp and rapid rise in interest rates has been pinned as the primary culprit for the sell-off, and things could be just getting started. Although stocks are sharply higher in early trade on Friday, the rally being seen could simply be more of a relief rally than anything else. The... Continue Reading