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orbemnews · 3 years

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Beware the Fed's asset price 'monsters' “A number of participants suggested that if the economy continued to make rapid progress toward the committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the minutes said. The gentlest of warnings from the central bank helped send stocks to a third straight day of losses. The CNN Business Fear & Greed Index is now solidly in the “fear” zone, a major shift from a month ago when greed dominated. Remember: Ultra low interest rates and massive bond purchases by the Fed have helped accelerate the recovery from the pandemic. But they have also spurred a huge stock market rally, plus spikes in real estate prices and other assets. Now, investors are worried that accelerating inflation will force the central bank to pull back stimulus sooner than anticipated. Fed officials have largely waved off these fears, saying they expect price hikes to be fleeting. “However, a couple of participants commented on the risks of inflation pressures building up to unwelcome levels before they become sufficiently evident to induce a policy reaction,” the meeting minutes stated. Kit Juckes of Societe Generale said investors would be best served for now by paying attention to the Fed’s actions rather than its words. “The [Federal Open Market Committee] members aren’t just talking instead of doing, they’re talking about when they should start talking properly about tapering their asset purchases,” he said in a research note on Thursday. Juckes pointed out that the Bank of Canada has already started tapering its stimulus, and the Reserve Bank of Australia will decide whether to extend its measures in July. China’s central bank is already pulling back. What’s different about the Fed? According to Juckes, the US central bank is treading carefully out of fear. “The Fed is terrified of the asset price monsters that its policies have given birth to,” he said. What’s next: St. Louis Fed President James Bullard said during an interview on Wednesday that it would be Fed chair Jerome Powell’s call when to open the discussion on pulling back stimulus. “I’m advocating that we get more solid evidence that the pandemic is really behind us, and is not going to have a ‘stinger tail’ to it that turns out to be a problem that extends for another six months or something or longer,” he said. “You don’t want to start down a path of changing policy and then have to go back into emergency mode because the pandemic has gone in some direction that you didn’t anticipate,” added Bullard. A painful reality check for bitcoin Bitcoin and other cryptocurrencies endured a vicious sell-off on Wednesday as China took more more steps to crack down on the digital coins. Bitcoin has recovered some lost ground. But the king of cryptocurrencies is still trading below $40,000, roughly 20% lower than where it started the week. Whether that matters depends on your perspective. Investors who bought into bitcoin six years ago are sitting on gains of more than 16,000%. If you only took the plunge six months ago, you’ve still more than doubled your money. But for anyone hoping to use bitcoin as an actual currency, Wednesday’s crash shows the currency remains extremely volatile. That’s not an attribute typically desired in a currency. It’s also a reality check for big investors. Institutional investors have had enough of cryptos for the moment, according to strategists at JPMorgan Chase. “Institutional investors appear to be shifting away from bitcoin and back into traditional gold, reversing the trend of the previous two quarters,” they said in a research note. Of course, we can’t discuss bitcoin without mentioning Elon Musk. In a tweet Wednesday, the Tesla (TSLA) CEO posted a diamond and praise hand emoji — a reference to the term “diamond hands” used by WallStreetBets traders — to indicate that the electric carmaker is holding onto its bitcoin position. Counterpoint: Investors shouldn’t be taking cues from Musk. “Do not pay attention to Elon Musk’s comments about anything in crypto. He knows virtually nothing about cryptocurrencies, that’s the worst thing,” William Quigley, managing director at crypto-focused investment fund Magnetic, said during CNN Business’ digital live show Markets Now. Lipstick sales are up more than 80% Face masks and lockdown orders have kept lips largely out of sight in the pandemic. That hurt lipstick sales last year. But makeup sellers say the fate of the cosmetics staple is starting to turn around as more people get vaccinated and the pace of social interactions picks up, my CNN Business colleague Parija Kavilanz reports. According to the latest figures from market research firm IRI, which tracks point of sale data at retailers, lipstick sales hit $34.2 million in the four weeks ending April 18, up more than 80% from the same period a year earlier. They still fell short of pre-pandemic levels of over $40 million. Walmart (WMT) told CNN Business in an email that lipstick is the top performer across all segments of cosmetics, and that lipstick sales were a standout in its latest quarter ending April 30. The retailer said shoppers were showing a strong preference for longwear and smudge-proof lipsticks that don’t rub off as easily inside of a mask. More recently, Walmart said customers are grabbing bright colors like purples or blues, as well as trendy browns, in what it called an “opportunity for customers to once again express uniqueness.” A change in mask guidance could also work in lipstick makers’ favor. The Centers for Disease Control and Prevention said last week that fully vaccinated people don’t have to wear masks or practice social distancing indoors or outdoors, except in certain settings such as schools. Up next Kohl’s (KSS), Ralph Lauren (RL), Hormel Foods (HRL) and BJ’s Wholesale (BJ) report results before US markets open. Applied Materials (AMAT) and Ross Stores (ROST) are up after the close. Also today: US jobless claims at 8:30 a.m. ET. Coming tomorrow: Earnings from Deere (DE) and Foot Locker (FL). Plus, existing home sales for April. Source link Orbem News #Asset #BEWARE #Feds #investing #Monsters #Premarketstocks:BewaretheFed'sassetprice'monsters'-CNN #price

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goldira01 · 5 years

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The worst trading day in five years, Friday saw the TSX plummet 700 points, as investors sold shares in every sector across the board. U.S. markets saw $5 trillion wiped out last week, with oil down to more than year-long lows at $45 a barrel, while the VIX index flashed a fear indicator not seen since 2011. Not one TSX stock hit a 52-week high, though 29 posted year-long lows.

Panic has entered the markets, and early trading behaviour this week will be an indicator of which way investors will migrate. With the CNN Fear and Greed Index deep in the red at the end of last week’s bloodbath, panic-selling typified North American markets while panic-buying was sweeping supermarkets around the world.

The rout could have big implications politically as well as financially: “If the coronavirus epidemic materially affects U.S. economic growth, it may increase the likelihood of Democratic victory in the 2020 election,” Goldman Sachs suggested midweek. Given the rapid spread of the virus beyond China coupled with the U.S. healthcare (another hot political topic), the writing may be on the wall.

But never mind the sell-off; for investors following a contrarian strategy, value opportunities can be found in every industry you can think of right now. Many stocks were down by around 10% by close of play Friday, with names from Brookfield Renewable Partners to Restaurant Brands and even blue-chip gold miners like Newmont all on sale.

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is another top TSX stock to consider with three great qualities: great value for money, great track record, and a great dividend. And this is all on top of a defensive play for energy production and utilities — an aspect that is taking on greater significance as the market correction — now officially underway — threatens to turn into a recession.

Cheap stocks make for higher returns, and with a combination of its 3.7% and steep share price appreciation, Algonquin Power & Utilities could net total returns of 202% by 2025. Value is almost a moot point at the moment, but even with the leveling effect of the correction, this stock is nicely priced relative to its sector, with a P/E of 14.5 and P/B of 1.5 undercutting the integrated utilities average.

Algonquin Power & Utilities goes ex-dividend at the end of the month, so investors have some time to ponder its combination of value, solidity against market forces, and a 51% diversified payout ratio. The later facet of this stock makes it a key play in the energy production and utilities space for dividend growth. The company’s strong renewables exposure also makes it a play for green economy capital gains.

The bottom line

At this stage, investors with long-term portfolio goals should know what they’re holding and have confidence to stick with their choices. While last-minute selling could be part of an investor’s plan to free up capital, the thesis for buying in the current market is strong. However, investors should be making a list of stocks to back up the truck on in the event that the selloff deepens in March.

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meraenthusiast · 4 years

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Is The Fear And Greed Index Legit?

If you’re a Warren Buffet fan like myself, then you’ve probably familiar with his recommendation regarding fear and greed:

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” – Warren Buffett

Research shows that we use the part of our brain that emotions stem from to make day to day decisions instead of using logic.

It should come as no surprise that many of us make our investment decisions based on emotions as well.

Is that the right thing to do?

What did all the “financial experts” tell you to do during the COVID-19 pandemic? Did they instill fear or calm in you?

How do fear and greed apply to investing?

Let’s take a look…

Fear and Greed Effects

Whether you realize it or not, most investors are driven by two emotions: fear and greed.

Think about the last time you made any type of investment and ask yourself if you were acting out of fear or greed. It’s safe to say that most investors that sold during the coronavirus pandemic did so based on FEAR.

Unfortunately, if they sold low then they locked in their losses.

Too much fear can drive stock prices much lower than they should be.

On the other hand, just the opposite happens when investors get greedy. They can bid up stock prices much too far.

Bottom line

Fear = Sell = More Supply of Stocks for Sale = Stock Price Decreases

Greed = Buy = More Demand for Stocks = Stock Price Increases

Fear and Greed Index

What is the Fear and Greed Index?

This index is brought to us by our good friends over at CNN Money.

At is core, the Fear & Greed Index is an attempt to measure investor sentiment (general mood among investors regarding a particular market or asset) and volatility.

This is where we get the terms “bullish” or “bearish” from. Rising prices indicate bullish market sentiment (thus a positive investor sentiment), while falling prices indicate bearish market sentiment.

In other words, the index measures investor emotions of fear and greed on a daily, weekly, monthly, and yearly basis.

These financial experts claim that this index can serve as a tool for making sound investments while Bogleheads beg to differ claiming it useless.

CNN looks at seven factors scored 0-100 and the average is scored on a speedometer-like scale.

Seven factors of the index

The seven factors are:

Stock Price Momentum: The S&P 500 vs its 125-day moving average

Stock Price Strength: The number of stocks hitting 52-week highs and lows on the New York Stock Exchange

Stock Price Breadth: How far has share volume advanced or declined on the New York Stock Exchange (NYSE)?

Put and Call Options: The put/call ratio, which compares the trading volume of bullish call options relative to the trading volume of bearish put options

Junk Bond Demand: The spread between yields on investment grade bonds and junk bonds

Market Volatility: The VIX which measures volatility

Safe Haven Demand: The difference in returns for stocks versus Treasuries

Here’s what today looks like as of this writing:

According to the index, we’re now in FEAR mode!

Fear & Greed Over Time

How does this look over time?

My good friend Dr. Graham over at FI Physician has this to say about the fear and greed index over time:

“Now we see why the Fear & Greed Index is useless. See how it massively swings from extreme fear to extreme greed and back again. It is average investor sentiment; a retrospective score of how the stock market is doing.”

“This is not a shockable rhythm for ACLS purposes. A seizure? It’s not a brain wave or a fever curve, or a measure of respiration. No intervention is required.”

“The Fear and Greed Index is a statistic looking for a news story.”

Understanding The Fear And Greed Index

The financial experts that are Pro-Fear and Greed Index feel that by understanding and learning how the index works then we can make better investment decisions.

On the other hand, skeptics of the index dismiss it as a good investment tool. Why? Think about what it’s encouraging…for us to try and time the market rather than using a proven buy and hold strategy (commonly used by millionaires) for long-term growth.

As a long-term investor both in the markets and passive real estate investments, I understand that investors should avoid trying to time the markets to capture short term gains.

But what this index may do is help in deciding when to enter the market. Especially for those that are sitting on a load of cash and want to begin dispersing it.

By doing this, you’re emulating what Warren Buffett stated regarding when he likes to buy stocks. He doesn’t like to buy them when they’re low; he wants to buy them at their lowest.

“The best thing that happens to us is when a great company gets into temporary trouble. We want to buy them when they’re on the operating table.” – Warren Buffett

Behavioral Finance And The Index

There has been much research in the field of behavioral finance but nothing bigger than when psychologists Daniel Kahneman and Amos Tversky in 1979 developed “prospect theory,” which explains how the same person can be both risk averse and risk taking, depending on whether a decision seems more likely to lead to a gain or a loss.

This is where we’ve learned that people respond much more to fear of losing something vs making a gain. Actually, we’ll accept more risk to avoid a loss and this behavior predominates when the Fear and Greed Index leans toward fear.

Those that are for the index state that by understanding the risks associated with investments, investors have better chances of making the right decisions that are not based on emotion.

And by knowing what the fear and greed index is, investors have more real chances for success.

What About You?

What are your thoughts about the Fear and Greed index? What will you do the next time that panic strikes the airwaves? Will you sell like the masses or not?

If you don’t know then consider deciding now on either who you’re going to listen to and what you’re going to read once another crisis happens.

If you don’t have a mentor then consider searching for one now then begin developing the good habits that they recommend.

If you’re starting to realize just how VOLATILE the market is then good for you!

This is one of the handful of reasons I began diversifying into passive real estate via syndications.

If you want to learn more, join our FREE Passive Investors Circle today.

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heatherrdavis1 · 4 years

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Bitcoin Rallies Back To $6800 | Why Crypto Is Still My Top Pick For 2020

VIDEO TRANSCRIPT

What’s going on everyone. My name is Nicholas Merten here a data dash and today’s March 24th of 20 20. Well folks I hope you all are having a fantastic day wherever you are and in today’s video. We’re not only gonna be talking about the really strong sense of confidence we’re seeing in cryptocurrency markets as we basically met up for all the losses from the sharpest selloff in Bitcoin’s history for the last few years but along with that as well. I want to spend some time talking about the current developments with the cove and 19 ignoring a lot of the short term noise and really just talking about what we need to watch for in the long term and why I believe even though we may be able to start getting back to work in the next couple of months and maybe start going back to a sense of normality that this is going to certainly set us into a great depression of some sort much more larger and drawn out than a normal recession. All right. So a lot of things to talk about. Let’s go ahead and dive right into it. No it’s not a really positive topic case but again it’s something that I think we need to reflect on in this case and really just talk about what really matters at the end of the day. Right. Just trying to observe from what we can understand in the world now. Take a look here across the one of the market here very few plays here beating out Bitcoin here leading up the market of 9 percent. Now most crypto currencies are obviously following in that path to the upside. But we do have a few clear winners that are leading the market here engine as well. Wren we also two of our other top plays energy and chain link with other crypto currencies like nano as well really killing it right now doing well. Vast majority of the market right now up in the green with very few players down in the red. We could see here as well if we take a look here at the fear and greed index there’s something that’s very important to take in mind and that is that even though markets have resurged a lot of the losses here from the sell off we had at around 8000 going all the way down in about a 24 hour period plus pushing it 24 48 hours if you really wanna extend it that far. It really was it was pretty much an all day. We could see here that went all the way down to thirty six hundred. We have now recovered over three thousand dollars of value per bitcoin from the absolute low. And generally speaking from the kind of close range you’re on forty five hundred are good about a price or about two thousand one hundred dollars. So it’s good to see right. Bitcoin is definitely regained a lot of these losses and I think it proves to a few key things here with first off as always guys the thing I was enforces is during those peak times of fear when people are at the verge of believing Oh my God Bitcoin is over. That’s the same kind of kind of I guess not only ironically enough the same price action that we saw back during December of 2018 when we started depressed rates three K we were 80 percent down from the highs at 20 k people were just reaping over the idea like oh my god Bitcoin is done for right. When people start talking like that and there’s not much of a fundamental reason as to why prices down risk can be assured usually that this is a time of irrational fear and that markets will soon therefore correct themselves afterwards and buyers will come in for the discount opportunity at least the smart money well right. And you could be a part of that smart money if you want. Right. I’m not saying that every dip is going to be worth buying right. But when you have significant corrections when you have some those stark corrections you’ve ever seen. That’s usually the time to get a little bit more bullish than you might have been beforehand if you were willing to buy bitcoin at ten thousand boy are you going to love it when it’s down at thirty six or thirty eight hundred. Right. I mean your risk reward profile is so much more favorable if you still have that target range of. 50 to a hundred thousand as a possibility even if it’s just a fraction of a possibility right. So anyways that’s that’s just kind of logical investing and trading one to one. But another thing that’s important to notice while here when we take a look at this is I’m looking at the scalp X index which is a really cool Web site that aggregates a lot of indexes but one I want to look at is the fear and greed index. And interestingly enough the fear and greed index which is probably one of the more interesting kind of aggregate indicators here. Similar in some ways to the fear and greed index that I think CNN Money had put together back a while ago for traditional equities. Interestingly enough is showcasing this here that the market isn’t showing any signs of greed or being overbought. In fact right now we’re at some of our lowest levels we’ve seen on record. We haven’t been back here. I mean for example just to give you some perspective. Both of the last few Decembers were always good buy points right. December of 2019 Fiorina index was only down here to about 21. And a lot of that as well back here when we were in peak fear after the sell off in November to December. Right. You’re telling around here at a point and range that’s even higher than where we are right now. All right. So again you’ve got absolute fear throughout the market right now for the most part may people aren’t bullish on crypto currencies and it tends to be that usually the contrarians went out in this case the smart money tends to win out. Who knows if that’s really where we are right now. Who knows maybe we might have another pullback but I got to tell you all. For most kind of large scale buyers. You’re right you’re at sixty six hundred right you know over the last few days. If you had the opportunity to buy bitcoin anywhere from four to five thousand you are buying it more than a 50 percent discount from those relative highs just back here in February. Right. You see Bitcoin performing this well afterwards showcases me that people are looking for a non correlated asset to hedge against inflation and quite frankly maybe Bitcoin isn’t the store of value asset that many people want or doesn’t have. They have a lack of volatility that people would want. But you’re going to see in a store of value or in a hedging asset that there’s going to be a lot of volatility during this time period because there’s probably gonna be a lot of people wanting to buy it and in some cases after very strong rallies you’re going to have people who are cashing out and going on to cash and all kinds of different things going on. Guys these are volatile times. Take a look at. You don’t believe me right. You think volatility is lacking. Yes guess I would say it for a store value believe there cannot be volatility. Take a look at one of those time tested. You know store value assets here. Gold going all the way from 17 under an ounce down to fourteen fifty nine and then going right back up to 16 under. Does that remove the value of gold as a store value. No because in the daily timeframe as much as this is volatile and you know get as is just about as significant as Bitcoin’s move we’re just focused on a very small market on the monthly chart. Gold’s still way up. Gold just like bitcoin has generally set higher lows and higher highs on a longer term timeframe. And that’s what we care about that is what defines a store value a store value is an asset that I know I can purchase and two and I can know at some kind of later date that it is most likely that I’m either going to be able to get my money back or make a profit. Those are the only two things that a store value needs generally higher lows and higher highs. And a hedge generally against things like inflation or other real world types of assets that are correlated to world economies. Things of that sort. Some suddenly some way where you can preserve your purchasing power. Go to bitcoin. Do that. And again I know we got a lot of silver bugs as well. I’m not trying to rob the city guys it sucks. I own a little bit of physical silver and gold. All right. This has been a bad week for assets across the board. All right if you want to take a look again we can always hop over here. Take a look at equities and how you pull that up or just go ahead and pull up as P 500. Right. This is my general target range here 50 percent but even just dragging it out to here in two months the entire U.S. equity market down about 35 percent. You think that’s normal. It’s not. This has been one of the most dramatic sell offs we’ve ever seen as the biggest rushes for cash that we’ve seen in history and no one is safe in this environment when it comes to financial assets. But now it seems like the worst of that kind of cash run has come out in this case. Not saying that we can’t see equities sell off worse as we’ve been looking for about a 50 percent decline in total. But along with that as well. Gold silver might still get a bit a hindrance here same with Bitcoin. But I think generally speaking now we can see people rebuilding their positions. Gold and Silver building up Bitcoin building up. These are the assets that should be performing well in a market where people are rushing in this case they’ve gotten to their cash positions right. They’re looking for something that’s going to hedge against what’s to come. And the thing that’s on a lot of people’s minds is inflation inflation. I mean we have been hearing about central bank monetary policy that’s going to be injecting massive amounts of cash in the economy. We’re hearing about mass bailouts. The government is going to be using taxpayer money or money that’s coming. From the Treasury insurance and Treasuries in this case in order to finance new debt and credit the system. And it is going to increase the monetary supply by a very very large margin. This case is going to be huge. Right. We don’t know exactly that headline figure is it. Be silly for us to say we knew what it was because quite frankly in the last week alone those numbers have been increasing quite steadily. You know people like Anthony popular auto for example who believe it’s going to be up to five trillion. You have some people who are naming anywhere from seven to 10 trillion. It’s crazy. And the biggest factor that’s going to determine all this is what’s going to happen in the sense of our response to cope at 19. This is going to become just to some simple few months that we have to deal with this or is this going to be a year year and a half issue and that’s we start to get this big spreads and the figures of what we’re going to have to supplement to the economy. All in all though. All right those questions really can’t be answered too much. And we will talk about it in just a moment from what we do know. Long story short though we’re hanging around the stock flow model guys. We’ve made a good recovery here over the last few days from the gap that have been spot after the gap not really so much a gap down but after a large sell off that we had in bitcoin one of the biggest selloffs we’ve had in past seven years of price action. We’ve finally gotten closer back to the main line here on the stock flow. So this is what we want to look for you guys. Want to get back up here at eight thousand right then after that provide Bitcoin some time to reflect through its market price the shock to the supply within the supply and demand ratio in this case. Right. And that comes with the having of it in May which the stock flows accounting for here. So we’re still on pace. Guys don’t lose sight. There’s so much noise in the world but I can tell you this just to provide some perspective I always bring up that point about how having really can’t be priced in until it happens because most people don’t understand having of it. Just think right now. Guys. Like the sheer amount of discussion around something like Kovac 19 versus the having of it if you know about having a very if you know about the bitcoin having you know the having event at any regard or even just bitcoin you are in a small minority of investors. Just imagine when people hear that bitcoin this new asset is starting to rally yet again and eventually at one point. I don’t know when this is going to be probably sometime in late 2020 we’ll be getting above its all time highs. Right. Like 20 20 early 20 21 or back above 20 k. It’s the only asset that’s up net for 2020. If Bitcoin sticks to the stock flow model that’s what it’s telling us it’s going to do. Right. So if it does get to there what do you think it’s going to go through the minds of investors. It’s the same thing that went through a lot of investors minds like myself. When I was starting to look at buying my first position in Bitcoin or I’d known about bitcoin for years. I got interested when it broke its all time highs again. Right. When we got back up here in January I was very very excited here in this case. That’s when I really started reading up building my positions in this case. I had been keeping up with the market in 2016 as it was getting closer and closer. But this is where I got really excited. And that’s what finally made me pull the trigger and actually get involved in crypto currencies more actively. The same thing will happen here for institutions. That sparked the retail wave. Now it’s time for the institutional wave and there’ll be a lot of retail investors as well. But it’s going to be the institutional capital that brings us up to a trillion dollar market cap. Multitrillion dollar market cap. So very very excited about that guys coming out here though. Wanted to talk a little bit so actually I want to go to this today I was just reading that personally what they wanted to talk about though. Is taking a look here at futures right now. Verizon take a look at CNN businesses investing dot.com some reason wasn’t pulling up the data but for right now it’s looking like futures markets are up about 4 percent and this is supposedly coming from confidence of Congress and the Senate and eventually the president passing a bill to provide relief. This is not only going to be the system that deploys paychecks for a lot of average Americans but along with that a lot of bailouts for companies a lot of short term credit lines for a lot of companies. It’s a lot of different things. And the issue right now as much as the futures are reflecting this up 4 percent which makes me curious makes me curious if someone knows something I don’t. At the end of the day nothing’s gotten past so far and we’re having the same kind of latency that we had back in 2008. Because you’ve got a few key issues here right guys. First off. What’s optimal to put in a bailout right now you put for example you and I in a room right you you the viewer myself. Well we can probably agree on a lot of things. We can also probably disagree on a few things or maybe want to prioritize certain things over one another. Right. And the good news is with a bailout. Right. You know a government can run up US and rack up as much debt as it wants right. It eventually becomes an issue. But really there’s no limit on this bailout. The issue is is that people probably don’t want a lot of funny money going out to things like it did in the last bailout. And the big issue here is that we don’t have single issue bills. Right. So we don’t have a bill that focuses on one specific thing like put giving a bailout to a specific company. Right. So you could vote for example I want to support maybe the general things you and I would support like maybe subsidizing some health care costs or for example providing relief to the CDC or maybe providing for example lines of credit to certain companies I’d be in favor a lot of those things. But you know then there’s certain starts to be things where you start giving favorable money to certain companies that don’t really need it. Corporate welfare in some shape or form and also as while there’s a lot of policies that are getting shoved in now that just seem very partisan in this case and it’s basically leading to this almost near endless negotiation during a time where a weak can mean everything for people’s pockets the global economy you know what we’re really seeing Congress and the Senate goof around here and not be able to come to a conclusion on just simply passing a bill that makes sense. But then again that’s how Congress and the Senate and the general federal body for the United States has been working for the last four years. So it comes at no surprise but long story short. Right. We have nothing past year. And at first you know again unless there’s something I don’t know. This seems like a very hopeful response here in this case of hoping to basically receive some kind of funding and the next next couple of days. But I want to go ahead here and talk a little bit about the case data here for Cove 19 and I think one of the best places we can look at right now is really ground zero in this case for Kobe 19 and that’s Italy right. Going ahead here take a look at it only on the map here. All the deaths penalty here to this dot here. Sorry not just deaths these are active cases. My apologies. So total confirmed cases. Sixty three and was pushing to sixty four thousand total of six thousand deaths which is really tragic. Luckily good news. Majority are recovering now and existing right now we have over fifty thousand four hundred eighteen cases. Now if we for example just focus simply on the confirmed cases here against the deaths here the scary thing is we’re pushing you know near 9 to 10 percent death rate here right now. Again this number will dwindle as time progresses as you have a large or dramatic case is confirmed that probably tested right in this case again we’re triple still trying to ramp up testing across the world and then I’ll give us more testing cases for people who might have it right now who may not know may not need to be hospitalized. So that’s the good news right. It means that on average not up to nine or 10 percent of people are dying. All right. Sad news here is that this is still a lot of people. And right now you know there’s some good news here in the sense that Italy over the last five days has set another consecutive low here in the sense of new cases which is really really exciting stuff. But there’s something important to take into mind here is that Italy in many countries right now already pushed to the brink. They’re not ready for the next kind of exponential jump here and the sense of cases they have that they have to hospitals it’s a little as twenty five percent that have to be hospitalized. And the thing that I want to emphasize here is that even though on the chart we’ve actually seen a little bit of a downturn now thanks to Italy taking Stark measures to quarantine individuals or just basically keep people indoors. Right. They’re basically self lockdown in this case across the entire country. They’ve been funny enough they had mayors going around just like literally shouting at people and saying like stay inside like you know. But the major thing I want to emphasize here is this chart right. We can see here that right now over the last few days I apologize to my mike a little bit. We can see the cases are declining right now which is really positive news. But this isn’t again a signal of absolute confidence here because we’ve had drops before and it became it can because of a few different things. One lack of lack of testing equipment be it could simply be in this case that we aren’t conducting as much tests as people are now quarantining for the most part or self isolating throughout their homes. And a lot of that as well it’s just simply a flaw within the chart game this case we need to see that there is a systematic sense of control across the board before we really get too eager or too confident and the major thing that I want to emphasize again is that point that Italy right now right. Is already being pushed to the brink. Other countries are going to be where Italy is in just a couple of weeks it’s going to be about a week week and a half when we really start to see I mean we’re already seeing right now in the United States for example I know this nurses are working 24 hour shifts. I know people my area close friends and family and stuff who either themselves or through their friends work as doctors and nurses and they’re working around the clock right now 24 hour shifts. This is not a laughing matter guys this is serious. And the really sad thing and the scary element of this is that if those nurses and those doctors and medical professionals. Catch Cove and 19 were working in the environment it is only going to further apply pressure on our medical systems in the United States. Bear in mind Cove at 19 is not the only thing that is hospitalized. If someone’s a cancer patient if someone. Is in a severe positions whether they have some other form of disease or disability there’s already enough demand in the system that’s been difficult for people to keep up with. You can talk to anyone in those industries and now they’ve got this. On top of it. And many of them are lacking the necessary respirators in this case the necessary gloves masks medical equipment that they need to do or basically need in order to do the proper job. So at the end of the day what really matters. It’s the logarithmic chart. The logarithmic chart for cases is picking up exponentially like it was in China. And the scary thing is is if we get anywhere near the growth factor we had back here. This is going to be extremely deadly. It’s not going to be deadly but it’s going to set us up in a position where we better start praying for some form of vaccine. We better start praying that there’s going to be some kind of solution that’s going to actually be able to save us from this because it doesn’t seem people right now are taking the proper precautions. Just to give you a little bit a sense here of how fast this is growing guys. We’re not even in April. This is back here in late January. What does the rest of 2020 unfold here. Is they’re going to be any other issues outside of Kogan at. We have to deal with. I think markets are still too confident about this. I still think people generally you know you see kind of just in the sense of the arrogance that some of us have that I don’t care about I’m going to go out and go do the same things I did in my day to day basis and no one thinks about you know who is really at stake here. It’s not just elderly people folks. People my age are at risk. Anyone in their in their 40s 30s 20s. You guys are at risk too. That’s a that’s a new revelation. I wouldn’t make that very very clear over the last couple of weeks it’s become very clear especially at Italy. There is a good number of cases that are young everyday people. Even if you make it right you don’t die from it. The pneumonia that people are getting. The struggle to breathe as you’re gasping for air. Without proper respiration technology it’s just. It’s it terrifies me personally guys. I’ve really over the last few years guys worked at being much better at just being able to spot when there’s just kind of noise and also and people are underestimating things. This is still being underestimated. By world governments by. Organizations and companies and everyday people. And anyone who’s thinking in the short term I hope feels the ramifications of not taking action earlier. By playing Eragon by kicking the can down the road. I know many of you out there who are watching this are doing your part. I’m not I’m not trying to ramble on about you guys and stuff I know you guys are definitely in tune with this. You watch these videos. There’s a lot of people who aren’t. A lot of people just don’t get it because it hasn’t hit someone they know. And until it does. They’re not going to probably care about it. But by that time when it’s hit someone we all personally know. It’s likely that not only many others have gotten it it’s a good chance you could get it. And that’s the thing it has to get to that point for people really realize it. This needs to be something that’s taught in school. We need to learn about how to deal with pandemics. I’m highly impressed by what’s happened in Japan and South Korea and Singapore. That is what it is like to flatten the curve. We’ve got to respond to these things quicker guys. Anyways I rambled on enough. I know that this has been a pretty dark theme here guys but one thing that I do want to emphasize here going back to crypto markets is really just focusing in here. On trying to again plant ourselves here to position ourselves right. The next thing not going to be really focusing on the sense of my positions is I will be building some precious metal positions. I will be looking to possibly possibly buy some equity positions as equities continue to go lower. But right now my and my number one priority still is crypto currencies and one of the things that I wanted to talk about today is our sponsor Cleo building a strategy that emulates to some degree our squeeze momentum indicator. Now Cleo in this case again is a relatively new platform the grand scheme of the overall space they’ve been around for a good I think is about a year now. I think that a year year and a half they talked with Kevin that they’ve been working on this it could be off on those dates but I wanted to spend some time to talk about a little bit of a strategy that I built. It’s actually quite successful in fact it beat out just normally hotly Bitcoin. And it’s one that emulates two different indicators here that are close to the basically the estimates indicate we’ve built it just takes into factor two indicators the momentum indicator which is a little bit different than the Lazy Bear squeezed momentum indicated that we use on Trading View and allowed as well the stochastic RSI use of the stochastic fast here in this case. Now basically what we built here for the rule is when momentum is up by 20 percent the last day and the stochastic fast is below 20 in this case so we’re coming from the lower band here the stochastic outside meeting we probably went through a sell off or pullback recently in this case we’re gonna buy Bitcoin with our full position and we’re now going to take full profit into order because that’s our long term target or Hoddle target. And then along with that as well to close the position if the RSI is down by five points in the last day and momentum is down by five and in the past. And again bear in mind this is not 100 percent aligned with this group’s measured indicator but the philosophy is still the same. We’re going off of a daily time frame versus a weekly which is what we tend to use for that as well. We’ve cut out in this case using the active. We’re just using the momentum in this to cast it fast in this case. Now I want to go ahead here and take a look real quick if we go ahead and actually take a look at the performance here back testing results you can see that this is actually performed quite nicely up two hundred seventy six percent over the back testing period. If you go back to the same time period stuff we’ve actually beaten now just hotline Bitcoin in this case. So really interesting indicator here good about trades here as well it’s not just you know again Holling it good about a trades going on here on the actual trading strategy but again I went through a few iterations in this case but coming out with a sixty three point three percent return it’s pretty cool. I think this was a pretty well performing strategy. And again. You see a chart with trade history here how the profits are looking here most of them are profitable trades right. It’s a very interesting strategy. And one thing as well again you could go here and you can type out the same exact thing guys and modify to your liking you might want to set a stop of some sort. I’ll sort of just a closed condition might even want to do different variations. One thing I was thinking about doing is where we used to have. We generally still kind of have the state of where the majority of indicators in this case we have three to five points. Basically a majority in this case a two to three majority originally from the base original indicator that I made we could have different combinations where maybe you do one where when momentum is up by 20 percent and the Mac deal is a curling curving up above maybe like the bottom baseline of the Mac D or like sorry but maybe it’s curving up against the other line things of that sort. Maybe it’s up by certain amount of points you could do that as well. So we could really fledge this out and again make it as complex as we want that looks for all the different kind of edge scenarios that can happen between the different indicator combinations. So you can really let your mind run wild with this guys. But again I recommend again test out clear if you guys want if you’re interested in doing things like algorithmic trading this is how you do it without having to learn R or Python or these different you know data science based languages it streamlines the whole process. Right. And they give you a lot of data and flexibility to work with you. You can pull from so many different data sources some that you don’t normally have access to on Trading View. Right. So again really recommend you guys check it out. It’s free to test it out. And if you guys want to try one of the pay plans you can look at what it entails and stuff during through other pricing plans. But anyways that’s it for the video guys. Thank you all so much for watching. Hope you enjoy this one if you did drop a like and I hope you all are staying safe wherever you are. Above all guys I really am thinking about you at this time. I hope you and your loved ones are doing OK. I know these are definitely dark times. Generally speaking I think we have to be frank about it. The best thing we could do is come prepared to stick through this together and make the best of what we have right now. If you’re again. Staying with family in this case. Make the best of it. Enjoy your time with them and joyous time to reflect and get away from working 24/7. Just stay safe above all guys. All right. So have a great day wherever you are and I’ll see you all in the next one. Stay tuned.

The post Bitcoin Rallies Back To $6,800 | Why Crypto Is Still My Top Pick For 2020 appeared first on Cryptosharks.net.

Via https://www.cryptosharks.net/why-crypto-is-still-my-top-pick-for-2020/?utm_source=rss&utm_medium=rss&utm_campaign=bitcoin-rallies-back-to-6800-why-crypto-is-still-my-top-pick-for-2020

source https://cryptosharks.weebly.com/blog/bitcoin-rallies-back-to-6800-why-crypto-is-still-my-top-pick-for-2020

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jeffrmayhugh · 4 years

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Bitcoin Rallies Back To $6,800 | Why Crypto Is Still My Top Pick For 2020

VIDEO TRANSCRIPT

The post Bitcoin Rallies Back To $6,800 | Why Crypto Is Still My Top Pick For 2020 appeared first on Cryptosharks.net.

source https://www.cryptosharks.net/why-crypto-is-still-my-top-pick-for-2020/?utm_source=rss&utm_medium=rss&utm_campaign=bitcoin-rallies-back-to-6800-why-crypto-is-still-my-top-pick-for-2020 source https://cryptosharks1.tumblr.com/post/613625933726908416

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scottmapess · 4 years

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Bitcoin Rallies Back To $6,800 | Why Crypto Is Still My Top Pick For 2020

VIDEO TRANSCRIPT

The post Bitcoin Rallies Back To $6,800 | Why Crypto Is Still My Top Pick For 2020 appeared first on Cryptosharks.net.

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cryptosharks1 · 4 years

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Bitcoin Rallies Back To $6,800 | Why Crypto Is Still My Top Pick For 2020

VIDEO TRANSCRIPT

The post Bitcoin Rallies Back To $6,800 | Why Crypto Is Still My Top Pick For 2020 appeared first on Cryptosharks.net.

source https://www.cryptosharks.net/why-crypto-is-still-my-top-pick-for-2020/?utm_source=rss&utm_medium=rss&utm_campaign=bitcoin-rallies-back-to-6800-why-crypto-is-still-my-top-pick-for-2020

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preciousmetals0 · 5 years

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Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC.

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orbemnews · 4 years

Link

Tech earnings could supercharge a greedy stock market What’s happening: Investors who think soaring valuations are grounded in reality point to future profits from the likes of Apple (AAPL) and Facebook (FB), which report results from last quarter after US markets close on Wednesday. Solid numbers could bolster the sentiment that stocks are the place to be, especially compared to low-yielding bonds. Microsoft (MSFT) set the tone when it shared earnings after the market closed on Tuesday. The company exceeded Wall Street analysts’ expectations for quarterly revenue by nearly $3 billion and hit a three-month sales record. Shares are up 2% in premarket trading. Breaking it down: The pandemic continues to buoy Microsoft’s business, which — as my CNN Business colleague Clare Duffy reports — has been bolstered by sales of computers and gaming systems, as well as the cloud computing tools helping companies facilitate remote work. “These were blowout numbers that will be another feather in the cap for the tech sector,” Wedbush Securities analyst Daniel Ives told clients. “The cloud growth party is just getting started.” Apple is also expected to show strong demand for electronic devices, especially given that it rolled out its new iPhone 12 last quarter. “Despite the later launch of iPhones, demand for the higher-end models remains robust,” Bank of America analyst Wamsi Mohan said in a research note this week. Facebook, for its part, is poised to get a boost from new shopping and video capabilities, which are expected to have brought in significant revenue thanks to the sheer number of people glued to their phones and computers at home. On the radar: We can’t forget Tesla (TSLA), of course, whose results also arrive after the bell on Wednesday. With shares up 1,122% from their March low, the stock has become a symbol of current market excess. The company has been profitable for five straight quarters, a first in its 17-year history. But now that it’s part of the closely-watched S&P 500, there’s new pressure to deliver. Guidance on 2021 deliveries will be crucial. Big picture: Greed has returned to markets, according to the Fear & Greed Index from CNN Business. Two of the metrics for determining market sentiment — stock price strength and market momentum — indicate “extreme greed.” But strong results from internet giants will only feed the pro-stock narrative, pushing the tech-heavy Nasdaq Composite to new heights. Talk of a bubble is only due to increase. “We don’t think that we are yet in the late stage of a bubble in the overall stock market,” John Higgins, the chief market economist at Capital Economics, said in a note to clients Tuesday. “Nonetheless, we acknowledge that the surge in the Nasdaq Composite suggests we may at least be in the early stage of a bubble again, even if the climb in the index is partly justified by the boost to earnings of companies in the technology sector from the pandemic.” The ‘unnatural, insane’ GameStop rally keeps going The Reddit-fueled rally of GameStop (GME) shares shows no signs of abating, as individual traders continue pumping up stock in the struggling video retailer. The latest: GameStop’s stock exploded 93% on Tuesday, finishing the day at $147.98. Gains are also being fed by traders who bet against GameStop, who are rushing to buy stock to limit their exposure in what’s known as a “short squeeze.” The struggling company now has a record market value of more than $10.3 billion. Its stock is up another 64% to $242 per share in premarket trading after Tesla CEO Elon Musk tweeted about the frenzy. Remember: Shares of GameStop, which is expected to lose money for the next two years, closed out 2020 at $18.84 per share. It’s clear that demand has completely decoupled from expectations about future earnings and inherent value. Instead, online commentators are relishing what they see as a David vs. Goliath triumph against hedge funds and short sellers, cheering the democratization of investing through no-fee trading platforms like Robinhood. But the dramatic run-up in GameStop’s stock is generating growing concern in the investment community — even among those who had previously been bullish. Michael Burry, the fund manager made famous by “The Big Short,” unveiled a stake in the company in 2019, helping to fuel interest. Now, as Bloomberg reports, he’s sounding the alarm. “If I put [GameStop] on your radar, and you did well, I’m genuinely happy for you. However, what is going on now — there should be legal and regulatory repercussions,” he tweeted Tuesday. “This is unnatural, insane, and dangerous.” American companies are still grappling with the Capitol riots Despite vocal pledges from some companies to take bold action following the deadly Jan. 6 siege on the US Capitol, many of America’s corporate giants are taking a wait-and-see approach about their future political giving, a new analysis from my CNN colleagues shows. CNN surveyed the roughly 280 companies in the Fortune 500 that supported the 147 Republican lawmakers who objected to certifying President Joe Biden’s win. About 150 responded, representing $14 million in donations to the politicians in question during the 2020 cycle. Among the findings: Many of the firms that have chosen to suspend campaign donations have taken a broad-brush approach — freezing contributions across the board, rather than targeting the Republican objectors. While 120 of the companies said they had decided to pause or end political giving in some form, 73 said they would halt donations to all federal candidates. Just 31 companies had specific timetables for how long they would suspend political activity. Sheila Krumholz, executive director of the nonpartisan Center for Responsive Politics, said that how long the corporate revolt will last is an open question, particularly since campaign fundraising usually slows in the months after an election. “Right now, it’s quite easy for them to sit back,” Krumholz said. “It’s hard to imagine this would last through the primaries and general election in 2022.” You can find a breakdown of how each company responded here. Up next AT&T (T), Anthem and Boeing (BA) report results before US markets open. Apple (AAPL), Facebook (FB), Levi Strauss (LEVI) and Tesla (TSLA) follow after the close. Also today: The Federal Reserve announces its latest policy decision at 2 p.m. ET, followed by a press conference led by Chair Jerome Powell. Any remarks on when the Fed will look at tapering bond purchases or raising interest rates will be under the microscope. Coming tomorrow: How did the US economy fare during the last three months of 2020? Investors will find out when GDP numbers post. Source link Orbem News #earnings #greedy #investing #market #Premarketstocks:Techearningscouldsuperchargeagreedymarket-CNN #stock #supercharge #Tech

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soundincomestrategies · 6 years

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July Monthly Newsletter

What’s in Store for the Rocky Financial Markets in the Second Half of 2018?

We are now past the halfway point of 2018, and, as far as the financial markets go, the contrast between what we experienced last year and what’s happened so far this year could not be more extreme. What do the next six months hold in store? No one can say for sure, of course, but if you have money in the markets, it’s certainly important to consider the different possibilities.

A year ago, the stock market was ruled by hope, with Wall Street laser-focused on the economic promise of Donald Trump’s corporate tax cuts. In fact, the VIX Index, which measures market volatility, was historically low in 2017, never once spiking above its long-term average of 19.4.1 Since early February, the exact opposite has been true. By mid-April, the S&P 500 had already moved up or down at least 1 percent 28 times, compared to just eight such swings for all of last year. The Dow and Nasdaq have been equally volatile.2

What’s been driving all the uncertainty? Well, several things, but most recently and consistently, it has been the increasing threat (and actual impacts) of a trade war, as Donald Trump seeks to balance unfair tariff schedules with China, the European Union, and other countries. Those worries ramped up as June came to a close, with the Dow tumbling 328 points on June 25 after posting a 2 percent decline the week earlier. That was its biggest weekly decline since late March. The S&P 500 also fell 1.4 percent, while the Nasdaq dropped 2.1 percent.3

The pullback came after a relatively long stretch of gains, continuing the cycle of dramatic ups and downs that began in February. Back then, Wall Street’s main worries were the overhyped prospects of inflation and rising interest rates. Starting in April, however, the bigger concern became Trump’s verbal sparring over tariffs with several world leaders.

Threats Becoming Realities

Even before any new tariffs were actually imposed, the markets dipped because—as I’ve often explained—the financial markets are forward-looking and driven largely by emotion, namely optimism and pessimism or greed and fear. Three months later, however, the impacts Wall Street most feared from Trump’s tough stance on trade are now showing signs of becoming realities. In the midst of the volatility in late June, for example, Harley-Davidson announced it would move production of its motorcycles shipped to the EU overseas based on the fact that new EU tariffs would cost the company $90 to $100 million a year.

Naturally, the announcement fueled worries that new tariffs could lead to similar moves by other U.S. companies. That could further undercut the prospect of all the economic growth that’s supposed to result from Trump’s tax cuts, which Wall Street was very optimistic about a year ago.

While it’s still possible that equitable trade agreements will be reached and help improve the U.S. economy in the long-run, that won’t matter if there is enough short-term pain to spook investors into a major sustained sell-off. And let’s not forget, as I’ve discussed in previous newsletters, there are many other deeply concerning details about this market and the current state of the economy that go well beyond the trade-war issue.

As you may know, the Federal Reserve approved its second short-term interest rate hike of the year in June, bringing the current Fed funds rate up to 2 percent. They did this despite the fact that inflation is still below their 2 percent target and long-term rates are still stuck below three percent. Increasingly, they are flattening the yield curve, which could potentially hinder one of the most vital components of a strong economy: lending and borrowing.

Resistance Level

I’ve explained before that I believe long-term rates are going to continue hitting a strong resistance level at just below or above three percent for a variety of reasons. At the same time, I also believe inflation is going to remain low and possibly even lead to deflation—largely because the people who make up the country’s largest consumer demographic, Baby Boomers, are beyond their spending years and are now focused on saving.

As for the economy, itself, in the first half of the year, certain indicators did continue to look decent. According to the Labor Department, the unemployment rate hit 3.9 percent in April, its lowest level since 2000. As for GDP growth, it came in at 2 percent for the first quarter and is expected to hit or top 3 percent for the second quarter.4 While that’s still a long way from the 4 percent Trump originally promised, keep in mind his tax cuts are only starting to have an effect. Once their full impact is felt, we could see growth increase further in the next six months.

But that’s only one possibility. Another possibility is that the impact of the tax cuts is greatly diminished by the effects of a trade war, or by a flattened yield curve, or by creeping deflation, or any of the other factors I’ve discussed. Oh, and let’s not forget our massive federal debt, which—according to the latest figures from the Congressional Budget Office—is projected to reach 78 percent of the GDP by the end of this year, the highest level since 1950.5

The point is, I believe there are enough concerning details present in the economy and financial markets right now to assume—at the very least—that the extreme volatility we’ve experienced in the first half of the year isn’t going to lessen any in the second half. And remember, we saw similar patterns of volatility leading up to the major market drops that began in 2000 and 2007—so similar that, to me, it feels a lot like 2007 all over again.

In my 2018 market forecast, you may recall, I said I believe this will ultimately be another double-digit year, with the stock market either rising or falling by 10 percent or more from where it finished last year. Either could still happen, of course, but as the second half of the year begins, I think one possibility is definitely looking more likely than the other.

Preeti Varathan, “2017 Was the Least Volatile Year in Decades,” Quartz.com, last modified on Dec. 22, 2017, https://qz.com/1154499/the-vix-2017-was-the-least-volatile-year-in-decades/

Paul R. La Monica, “Stop the Market! I Want to Get Off! Volatility is Back,” CNN Money, last modified on April 16, 2018, http://money.cnn.com/2018/04/16/investing/stock-market-volatility/index.html

Anora M. Gaudiano and Ryan Vlastelica, “Stocks Suffer Worst Day in Weeks as Trump’s Trade Threats Rattle; Dow Ends Below Key Level,” MarketWatch, last modified on June 25, 2018, https://www.marketwatch.com/story/dow-futures-drop-more-than-150-points-as-trump-makes-more-trade-threats-2018-06-25

“U.S. First Quarter GDP Growth Revised Down to 2 Percent,” Reuters, last modified on June 28, 2018, https://www.reuters.com/article/us-usa-economy-gdp/u-s-first-quarter-gdp-growth-revised-down-to-2-percent-idUSKBN1JO1QQ

Jeff Stein, “The Federal Debt is Headed for the Highest Levels Since WWII,” Washington Post, last modified on June 26, 2018, https://www.washingtonpost.com/news/wonk/wp/2018/06/26/the-federal-debt-is-headed-for-the-highest-levels-since-world-war-ii-cbo-says/?noredirect=on&utm_term=.f51ca8be0b71

Disclaimer:

Sound Income Strategies, LLC is an SEC Registered Investment Advisory firm. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor or tax professional about your specific financial situation before implementing any strategy discussed herein.

The post July Monthly Newsletter appeared first on Sound Income Strategies.

from Sound Income Strategies https://soundincomestrategies.com/newsletters/july-monthly-newsletter/

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awesomecolorfulcollectorwombat · 6 years

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Why The Market Is 'Crashing' And What You Need To Do About It

New Post has been published on http://indolargeprints.com/why-the-market-is-crashing-and-what-you-need-to-do-about-it/

Why The Market Is 'Crashing' And What You Need To Do About It

(Source: imgflip)

The stock market just had its worst week since the correction began, with the S&P 500 (SPY), Dow Jones Industrial Average (DIA), and Nasdaq (QQQ), falling 5.6%, 5.9%, and 7.3%, respectively.

SPY Price data by YCharts

This means that the market has now retraced to its previous low, something I warned was historically likely to happen.

SPY data by YCharts

But still investors are understandably worried about the return of such volatility, after 2017’s freakishly calm and bullish year. In fact, according to CNN’s Fear & Greed Index, a meta analysis of seven different market indicators, investors are not just afraid but are petrified right now.

(Source: CNN)

But since the root cause of fear is uncertainty and doubt, let’s take a look at what caused the stock market’s latest freakout. More importantly discover why these fears are likely overblown, and why the you shouldn’t be racing for the exits.

What The Market Is Freaking Out Over Now

On Thursday, President Trump announced that he would be imposing 25% tariffs on $50 billion to $60 billion worth of Chinese imports covering 1,300 products including: aerospace, information and communication technology, and machinery. This was in retaliation for years of Chinese intellectual property theft against foreign companies, including US firms.

The Chinese responded with calls for America to “cease and desist” and the Chinese embassy said:

“If a trade war were initiated by the US, China would fight to the end to defend its own legitimate interests with all necessary measures.” -Chinese Embassy

Thus far, Chinese retaliation has been modest, just $3 billion against 128 US imports including: pork, aluminum pipes, steel and wine. However, according to Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, those $3 billion in tariffs appear to be in response to Trump’s earlier steel and aluminum tariffs.

Those only affected $29 billion in US imports, before Trump began exempting most US allies.

The Wall Street Journal is reporting that China will now ratchet up its own counter tariffs, specifically against, “U.S. agricultural exports from Farm Belt states.” Specifically, this means tariffs on U.S. exports of soybeans, sorghum and live hogs, most of which come from states that voted for Trump.

Apparently, the Chinese began planning for a potential US trade dispute last month when the Chinese Commerce Ministry met with major Chinese food importers to discuss lining up alternatives sources of major US agricultural products. For example, China is considering switching its soy imports to Brazil, Argentina and Poland.

The concern that many people have is that during the announcement on the Chinese tariffs, which cover just 10% of all US imports from that country, Trump stated that this was just the first in a series of upcoming tariffs against China.

So many are worried that if the President truly believes that “trade wars are good and easy to win”, then he could potentially escalate this trade tiff into a full blown trade war. Something that history shows is never a good thing, and sometimes has disastrous consequences.

How Bad Would A Full Blown US/China Trade War Be?

The White House has stated that it wants to reduce the US/China trade deficit by $100 billion a year, or about 20%. Theoretically, that could mean that Trump might impose tariffs on all Chinese goods, in order to make them more expensive and less competitive with either US goods or those from non-tariffed countries.

So what effects would this have on the US? Well, first of all prices will increase initially, since companies like Walmart (WMT) have complex supply chains with contracts for sourcing for its stores. So in the likely case a 25% tariff on $50 billion to $60 billion in Chinese imports represents a $12.5 billion to $15 billion increase in US input costs.

Or to put another way Trump’s China tariffs are likely to boost inflation by 0.08%, and drive core PCE from 1.5% to 1.6%. Now that isn’t the total negative affect to the US economy. After all, China has already retaliated in response to steel tariffs, and is likely to now ratchet up its own counter tariffs.

How bad could that be for American exporters? Well, China supplies just 2% of US steel, meaning that the steel tariffs represent a $580 million loss of export revenue. In response, they slapped tariffs on US goods (with apparent plans to completely replace them with foreign alternatives) of $3 billion. That’s a retaliation tariff ratio of 5.2, meaning for every $1 in export revenue threatened by US tariffs, China appears to be willing to cut its US imports by as much as $5.20.

However, in 2017, Chinese imports of US goods totaled $130 billion, so there is no way this retaliatory ratio could hold. However, theoretically, if the US and China were to get into a full blown trade war, China could cease importing up to $130 billion of US products.

That worst case scenario would likely require Trump imposing similar (25%) tariffs on all Chinese imports to the US, which totaled $506 billion last year. In the worst case scenario, that could temporarily raise US prices by $127 billion.

Worst Case US/China Trade War Costs

Impact

Cost To US Economy

% Decrease In Real GDP Growth

Increase In Inflation

Core PCE

Higher US Prices

$127 billion

0.7%

Lost US Exports

$130 billion

0.7%

Total

$257 billion

0.7%

2.2%

Sources: thebalance.com, CNN, Marketplace, Bureau of Economic Analysis

Nominal US GDP would not fall due to rising prices; in fact, it would increase. However, GDP is reported as inflation adjusted, meaning that price increases would not have an measured affect on economic growth since they are by definition excluded.

However, they do represent a true cost to the economy, since it means consumer pay more and have less money to spend on other things. The effect on GDP would potentially be seen via China’s replacement of potentially $130 billion in US exports with those from other nations. That would knock off 0.7% from US economic growth. Currently, the Federal Reserve is projecting 2.7% growth in 2018, so in our worst case scenario that would fall to 2.0%.

Meanwhile, the higher US prices would represent about 0.7% increase in inflation, pushing the core, (ex-food & fuel), personal consumption expenditure index to 2.2%. Core PCE is the Fed’s preferred inflation metric because it’s a survey of what people actually buy, taking into account rising prices, (switching to cheaper alternatives).

The bottom line is that a full blown US/China trade war has the potential to do significant damage to America. It could potentially lower economic growth 25% over a year, and raise inflation by nearly 50%. But just above the Fed’s stated 2.0% target. Fortunately, this worst case scenario is unlikely to actually happen.

Trade Wars Are Terrible But This “Tariff” Isn’t Likely To Become One

First understand these tariffs are not immediate. US Trade Representative Robert Lighthizer’s office will have 15 days to publish a list of the goods, which will be followed by a 30-day comment period before they go into effect. Tariffs and retaliatory tariffs are not a light switch, but a slow moving regulatory process.

This means that it will likely be six weeks (early May) before any US tariffs on Chinese imports begin. Chinese retaliation in terms of decreased exports would likely start by late June/early July at the earliest. Or to put another way, half of the impact of the worst case scenario would be eliminated by timing.

And time is our friend here because most trade disputes, even threatened tariffs, are merely negotiating tactics. Most of the time tariffs get called off relatively quickly as both sides seek some kind of resolution.

After all, China potentially could take a 3.8% hit to GDP if it lost its US export market, cutting its economic growth in half. That’s something it has no interest in. Meanwhile, the sharp hit to Trump’s constituency (states that helped elect him), plus slower US economic growth, would certainly not help the President’s re-election efforts in 2020.

We’ve already seen that the President’s threatened tariffs can get walked back. For example, the steel and aluminum tariffs that freaked out the market a few weeks ago. Trump has since “temporarily” exempted: The European Union, Canada, Mexico, Brazil, Australia, New Zealand and South Korea. These countries actually are responsible for 2/3 of all US steel imports while China represents just 2%.

In early March, China’s Supreme Court vowed to strengthen China’s protection of intellectual property rights, something that Chinese tech firms have been calling for. This means that the trigger for these tariffs might already be fading. It also means that both China and the US have a relatively easy way out, in which no one loses face, because each side can claim some kind of victory.

What The Fed Did To Potentially Spook The Markets

The other potential partial factor for this week’s sharp drop is the Federal Reserve’s March meeting in which it hiked the Federal Funds rate by 25 basis points to 1.5% to 1.75%. This was already priced in by the bond market and was a surprise to no one. The Fed said that, “The economic outlook has strengthened in recent months” and boosted its economic growth forecasts:

2018: 2.7% (from 2.5%)

2019: 2.4% (from 2.1%)

2020: 2.0% (from 1.8%)

Long-Term: 1.8% – unchanged

The Fed also updated its core PCE projections:

2018: 1.9%

2019: 2.1%

2020: 2.1%

Meanwhile the Fed’s new unemployment forecast is:

2018: 3.8%

2019: 3.6%

2020: 3.6%

Now none of these upgraded projections are significant, since they basically mean the Fed is just more bullish on the economy. But what potentially concerned the market is the Fed’s slightly more hawkish stance on interest rates.

(Source: CME Group)

Basically, this revised plan from the Fed calls for:

2018: two more hikes (same as before)

2019: three hikes (same as before)

2020: two hikes (one more than before)

The Fed basically expects to raise its Fed Fund rate, which is the overnight interbank lending rate, to 3.5% by the end of 2020. Of course, that’s assuming the US economy keeps growing as quickly as predicted.

3.5% is still far below the historical norm (4% to 6%), so why should that have concerned investors? Simply put because it indicates that the Fed might end up triggering a recession.

Yes You Should Fear An Inverted Yield Curve…

While the Fed Funds rate has no direct link to the bond markets that actually control US corporate borrowing costs, most US banks do benchmark their prime rate off it. The prime rate is how much they charge their most creditworthy and favored clients.

The prime rate has now been raised to 4.75%. The prime lending rate is what most non mortgage consumer loans are benchmarked off. So this means that US consumer borrowing costs are rising, and could rise another 1.75% by the end of 2020. That could certainly slow the pace of consumer borrowing, and potentially increase the US savings rate. While a good thing in the long term, it would potentially cause consumer spending to slow. Since 65% to 70% of US GDP is driven by consumer spending that might in turn slow US economic growth and, more importantly to Wall Street, corporate profit growth.

But here is the real reason that investors should worry about the Fed Funds rate potentially rising another 1.75%. Because under current economic conditions, it would almost certainly cause a recession. That’s based on the single best recession predictor we have, the yield curve. This is the difference between short-term and long-term treasury rates.

The yield curve is 5/5 in predicting the last five recessions. If the curve gets inverted, meaning short-term rates rise above long-term rates, a recession follows relatively soon (usually within one to two years).

Why is this? Two reasons. First, if short-term rates are equal to or above long-term rates, the bond market is signaling that it expects little economic growth and inflation ahead.

More fundamentally, it’s because financial institutions borrow short term to lend long term, at a higher interest. This net margin spread is what creates lending profits and is why loans get made in the first place. So if short-term borrowing rates rise higher than long-term rates, it can decrease the profitability of lending, and result in fewer loans. Thus, consumer spending can fall, businesses invest less, and the economy slides into a recession.

And while the Fed Funds Rate has no direct link to the interest rates that companies care about (long-term rates that benchmark corporate bond rates), studies show that the short-term treasury bonds track closely with the Fed Funds Rate. But long-term rates, such as the 10-year Treasury yield, do not, as they are set by the bond market based mostly on long-term inflation expectations.

This is why the market freaked out over January’s labor report that showed wages rising 2.9%. The fear is that if the labor market is too hot, then rising wages trigger faster inflation which forces the Fed to hike rates high enough to trigger a yield curve inversion. This is what occurred before the last three recessions.

Basically, this means that if the Fed were to proceed with its revised rate hike schedule, then short-term rates would likely rise by 1.75% or so. Long-term rates, on the other hand, are set by inflation expectations and the 10-year yield of 2.83% is currently pricing in 2.1% inflation.

(Source: Bureau Of Economic Analysis)

However, inflation has been stuck at 1.5% for the last four months, and so far shows no signs of rising to those long-term expectations. Which means that 10-year yields are not likely to rise 1.75% by 2020, in line with rising short-term rates.

That in effect indicates that seven rate hikes would almost certainly invert the yield curve, heralding the next recession. The good news? The Fed isn’t likely to keep hiking if inflation remains low and threatens to invert the yield curve.

…But The Fed Isn’t Likely To Invert The Curve

So if the Fed’s current forecast calls for low inflation, but enough rate hikes to likely trigger a yield curve inversion and possible recession, why am I not freaking out? Two main reasons. First, Jerome Powell, the new Fed Chairman, is not an economist, but a veteran of Wall Street. Over his career, he’s been:

Managing director for Bankers Trust – a US bank

Partner at The Carlyle Group – a private equity firm

Founded Severn Capital – a private equity fund specializing in industrial investments

Managing partner for the Global Environment Fund – a private equity fund specializing in renewable power

Here is why this matters. Economists are big fans of economic models, such as the Phillips Curve. This says that as unemployment falls below a certain, (full employment), wages and thus inflation, must rise.

Powell has indicated that he’s willing to go where the data takes him, and not just assume the models are correct. In other words, Powell doesn’t buy into the fears of the Fed’s more hawkish members.

In fact, take a look at what he said during the last Fed post meeting press conference:

“There is no sense in the data that we are on the cusp of an acceleration of inflation. We have seen moderate increases in wages and price inflation, and we seem to be seeing more of that… The theory would be if you get below the sustainable rate of unemployment for a sustained period, you would see an acceleration of inflation. We are very alert to it. But it’s not something we observe at the present… We will know that the labor market is getting tight when we see a more meaningful upward move in wages… Wages should reflect inflation plus productivity increases … so these low wage increases do make sense in a certain sense… That is a sign of improvement (rising labor participation rate), given that the aging of our population is putting downward pressure on the participation rate… It’s true that yield curves have tended to predict recessions … a lot of that was when inflation was allowed to get out of control.” -Jerome Powell

What we see in these quotes is a man who understands finance and understands that the world is more complex than simplified models would indicate. He seems to realize that we are NOT at full employment. So until wages start rising there is no reason to assume we are and that inflation is about to accelerate to dangerous levels.

Powell has also indicated that he expects tax cuts to fuel more investment, boosting productivity, which would allow wages to rise without triggering higher inflation. This is something that I expect as well and the key reason that I’m personally so bullish on the economy, and expect the current expansion to continue for many years.

The bottom line is that Powell seems to be a man who will, for the sake of expectations, make a forecast. But he seems more than willing to ultimately alter monetary policy as the economic data indicates is necessary, not raising rates just because the Phillips Curve says to.

And as a former Wall Street banker who is well aware of the yield curve and its importance, I don’t consider it likely that he’ll blindly keep hiking rates based on a plan from a few years ago. When the facts change, Jerome Powell changes his mind.

Which brings me to the biggest reason to shake off and ignore this last terrible week in the stock market.

US Economic Fundamentals Remain Strong And That’s All That Matters

The stock market may be a forward looking instrument, but it’s also prone to fits of violent pessimism whenever anything bad happens. The market often takes a worst case scenario like “sell first, ask questions later” approach.

Trump announces tariffs? It MUST mean we’re headed for a full blown global trade war that will trigger massive inflation, a shrinking economy, and a bear market! Sell everything!

The truth is that while sometimes the worst case scenario happens (such as the Financial Crisis), 99% of the time negative effects of anything are not as bad as people fear. Or to put another way very seldom is it true that “this time is different.”

So let’s take a page of out Jerome Powell’s playbook and look at the data. I’ve already covered why the last jobs report was darn near perfect.

Meanwhile, the risk of a recession is the lowest I’ve seen since I discovered Jeff Miller’s excellent weekly economic report 18 months ago.

(Source: Jeff Miller)

Specifically, according to a collection of meta analyses of leading indicators and economic reports, the four- and nine-month recession risk is 0.39% and 15%, respectively. Of course, these can and do change over time as new data comes in. But the point is that based on the most recent evidence there is no reason to fear a recession.

Finally, the New York Fed’s Nowcast (real time GDP growth estimator) is saying that Q1 and Q2 GDP growth is likely to come in at 2.9%, and 3.0%, respectively.

Now that also changes with economic reports as they come in, but if true then this is how US economic growth is trending:

2016: 1.5%

2017: 2.3%

Q1 2018: 2.9%

Q2 2018: 3.0%

Does this portend doom and gloom for the economy, labor market, or corporate earnings growth? No it does not.

I’m not saying stick your head in the sand and ignore all risks. But rather than freak out over POTENTIAL worst case scenarios to the economy we focus on the facts as best we know them. Right now those facts are:

low and stable inflation

strong job market but not at full employment (otherwise wages would be rising)

accelerating economic growth

strong and accelerating corporate profits

stock market trading sideways = valuation multiples falling = less risk of a bubble and crash

Bottom Line: Markets Are Driven By Short-Term Emotions, Your Portfolio Decisions Shouldn’t Be

Don’t get me wrong a full blown trade war with China would be a terrible thing. It would undoubtedly significantly increase inflation, slow the economy, and potentially force the Fed to raise rates to dangerous levels. These are things that could certainly trigger a bear market or even a recession.

However while all those risks are real, the probability of such a worst case scenario remains remote and speculative. What we do know for sure is what the economic data shows. Which is that the fundamentals underpinning the current economic expansion and bull market remain strong. More importantly, in an economy this large, it would take a large and protracted negative shock to derail those fundamentals and trigger the kind of market crash that many now fear is imminent.

That doesn’t mean that you shouldn’t protect yourself. I myself am continuing to de-risk my high-yield retirement portfolio with a strong focus on quality, undervalued, low volatility, and defensive stocks. But my point is that I’ve been doing that for several months now, back when the market was still roaring higher, and before fears of a trade war surfaced. That’s because I believe in building a bunker while the sun is shining so you never have to fear any market storm.

My recommendation to investors remains the same. Stay calm, focus on your long-term strategy, and don’t let the market’s knee-jerk reactions to likely overblown speculative fears cause you to make costly short-term mistakes.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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johnmauldin · 7 years

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MAULDIN: Investors Ignore What May Be The Biggest Policy Error In History

My good friend Peter Boockvar recently shared a chart with me.

The University of Michigan’s Surveys of Consumers have been tracking consumers and their expectations about the direction of the stock market over the next year.

We are now at an all-time high in the expectation that the stock market will go up.

The Market Ignores Monetary Uncertainty

It is simply mind-boggling to couple that chart with the chart of the VIX shorts (I wrote about the VIX craze in this this issue of Thoughts from the Frontline).

Peter writes:

Bullish stock market sentiment has gotten extreme again, according to Investors Intelligence. Bulls rose 2.9 pts to 60.4 after being below 50 one month ago. Bears sunk to just 15.1 from 17 last week. That’s the least amount since May 2015. The spread between the two is the most since March, and II said, “The bull count reenters the ‘danger zone’ at 60% and higher. That calls for defensive measures.” What we’ve seen this year the last few times bulls got to 60+ was a period of stall and consolidation. When the bull/bear spread last peaked in March, stocks chopped around for 2 months. Stocks then resumed its rally when bulls got back around 50. Expect another repeat.

Only a few weeks ago the CNN Fear & Greed Index topped out at 98. It has since retreated from such extreme greed levels to merely high measures of greed. Understand, the CNN index is not a sentiment index; it uses seven market indicators that show how investors are actually investing. I actually find it quite useful to look at every now and then.

The chart below, which Doug Kass found on Zero Hedge, pretty much says it all. Economic policy uncertainty is at an all-time high, yet uncertainty about the future of the markets is at an all-time low.

Why This Is Happening Now

At the end of his email blitz, which had loaded me up on data, Dougie sent me this summary:

At the root of my concern is that the Bull Market in Complacency has been stimulated by:

* the excess liquidity provided by the world’s central bankers,

* serving up a virtuous cycle of fund inflows into ever more popular ETFs (passive investors) that buy not when stocks are cheap but when inflows are readily flowing,

* the dominance of risk parity and volatility trending, who worship at the altar of price momentum brought on by those ETFs (and are also agnostic to “value,” balance sheets,” income statements),

* the reduced role of active investors like hedge funds – the slack is picked up by ETFs and Quant strategies,

* creating an almost systemic "buy the dip" mentality and conditioning.

when coupled with precarious positioning by speculators and market participants:

* who have profited from shorting volatility and have gotten so one-sided (by shorting VIX and VXX futures) that any quick market sell off will likely be exacerbated, much like portfolio insurance’s role in a previous large drawdown,

* which in turn will force leveraged risk parity portfolios to de-risk (and reducing the chance of fast turn back up in the markets),

* and could lead to an end of the virtuous cycle – if ETFs start to sell, who is left to buy?

On the Brink of the Largest Policy Error

The chart above, which shows the growing uncertainty over the future direction of monetary policy, is both terrifying and enlightening. The Federal Reserve, and indeed the ECB and the Bank of Japan, went to great lengths to assure us that the massive amounts of QE that they pushed into the market would help turn the markets and the economy around.

Now they are telling us that as they take that money back off the table, they will have no effect on the markets. And all the data that I just presented above tells us that investors are simply shrugging their shoulders at what is roughly called “quantitative tightening,” or QT.

I simply don't buy the notion that QE could have had such an effect on the markets and housing prices while QT will have no impact at all.

In the 1930s, the Federal Reserve grew its balance sheet significantly. Then they simply left it alone, the economy grew, and the balance sheet became a nonfactor in the following decades.

I don’t know why today’s Fed couldn’t do the same thing.

There really is no inflation to speak of, except asset price inflation, and nobody really worries about that. We all want our stocks and home prices to go up, so there’s no real reason for the central bank to lean against inflationary fears; and raising rates and doing QT at the same time seems to me to be taking a little more risk than necessary.

And they’re doing it in the midst of the greatest bull market in complacency to emerge in my lifetime.

Do they think that taking literally trillions of dollars off their balance sheet over the next few years is not going to have a reverse effect on asset prices? Or at least some effect? Is it really worth the risk?

Remember the TV show Hill Street Blues? Sergeant Phil Esterhaus would end his daily briefing, as he sent the policemen out on their patrols, with the words, “Let’s be careful out there.”

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#investing #stocks #economy #The Federal Reserve

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omcik-blog · 7 years

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New Post has been published on OmCik

New Post has been published on http://omcik.com/stocks-had-a-great-first-half-despite-d-c-drama/

Stocks had a great first half despite D.C. drama

The first half of the year has come to a close. And despite all the drama in Washington, and lack of any significant progress from the White House and Congress to get anything major done to help the economy, Wall Street is still in rally mode.

The Dow and S&P 500 have gained more than 8%. The Nasdaq has soared 14%. These are good returns for a full year, let alone six months. The rally has been broad too. 23 of the Dow 30 stocks are higher and 70% of the companies in the S&P 500 are up.

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But what can we expect from the market over the next six months?

The Dow finished Friday with a more than 60 point gain, but that snapped a three day streak of triple-digit moves.

Still, volatility has recently returned — with a vengeance. Markets have alternated between gains and losses. Stocks plunged Tuesday and Thursday but surged Wednesday.

CNNMoney’s Fear & Greed Index, which looks at seven indicators of market sentiment, hit both “fear” and “greed” levels this week. The VIX (VIX), a volatility gauge that is one of the components of our index, spiked as much as 40% Thursday before pulling back.

So investors may need to brace for more big swings — up and down — in the months ahead.

Wall Street will be focused on whether or not corporate earnings can continue to rise at a healthy clip in spite of what’s going on in D.C. and around the globe. Many experts are still bullish.

“Global stock markets continue to grind higher, shrugging off political turmoil in Washington & Rio, Middle East tensions and increased Brexit uncertainty,” said John Praveen, managing director of Prudential International Investments Advisors. He added that “stocks remain supported by strong earnings growth.”

Philip Orlando, chief equity strategist at Federated Investors, also thinks the market will drown out the political noise. He’s sticking with his year-end target of 2,500 for the S&P 500. That’s a more than 3% gain from current levels.

Related: Market madness returns as techs plunge

Orlando says the recent rebound in oil and bank stocks — two areas that have lagged the broader rally — will continue. He believes crude prices have bottomed and interest rates will continue to go up, and this should boost bank’s lending profits.

Orlando is bullish on banks even though he does not believe Trump and Congress will be able to succeed in efforts to pare back the Dodd-Frank financial reform law anytime soon.

Amar Reganti, a strategist at money management firm GMO, also isn’t expecting the president and lawmakers to give the markets or economy a boost.

He thinks Federal Reserve Chair Janet Yellen will continue to stress that the Fed will not raise rates too quickly and that Treasury Secretary Steven Mnuchin will be able to convince Congress to raise the debt ceiling by September, before the government could breach its legal debt limit.

“I don’t think Yellen is likely to make a policy misstep with rates,” Reganti said. “And Mnuchin is saying all the right things. The U.S. Treasury bond market is still the envy of the developed world. Why damage that with a self-inflicted wound?”

But even though many think the broader market may continue to climb, the big debate is about what’s next for high-flying tech stocks.

Related: Apple vs. Google: Which is the better stock?

Orlando said technology stocks — which have taken a bit of a beating lately — should bounce back as investors realize that earnings will remain strong. He thinks businesses will still need to spend a lot on tech to upgrade aging equipment.

But others warn that tech stocks could tread water for the foreseeable future.

“Our research suggests that popular, pricey stocks have low odds of outperforming in the long run, even if they are shares of large, growing, and profitable companies,” said John West and Amie Ko of investment firm Research Affiliates in a report.

The title of that report? “Are You Underweight FANMAG? Chillax!” It’s a reference to six techs that have been market darlings — Facebook (FB, Tech30), Amazon (AMZN, Tech30), Netflix (NFLX, Tech30), Microsoft (MSFT, Tech30), Apple (AAPL, Tech30) and Google (GOOGL, Tech30) owner Alphabet.

West and Ko urged investors to broaden their horizons and look for cheaper stocks that may be better bargains.

It will be interesting to see if Wall Street heeds that advice or if investors flock back to big techs after the Fourth of July. But after a crazy first half of the year, we all should probably chillax.

CNNMoney (New York) First published June 30, 2017: 12:16 PM ET

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