Archive for 2016

News You Can Use From Phil’s Stock World

 

Financial Markets and Economy

No Clear Winner (Yet) In Global Oil Markets War (Forbes)

Oil market wars may seem like an unusual title for an energy article, but that’s exactly what’s been happening in global oil markets for more than two years.

Negative interest rates will have toxic side effects (Independent)

Since 2008, policymakers have sought to use low rates to boost economic growth and increase inflation in order to bring elevated debt levels under control. Low rates should encourage debt-financed consumption and investment, feeding a virtuous cycle of expansion.

Germany Won’t Bail Out Banks, Including Deutsche Bank, Financial Collapse Possible (The Coin Telegraph)

Germany does not intend to bail out any failing banks, including Deutsche Bank.

According to Hans Michelbach, a senior lawmaker in Chancellor Angela Merkel’s voting bloc, resistance is growing to the possibility of stepping in to rescue a failing financial institution. 

Three Chinese cities restrict property purchases (Reuters)

Three Chinese cities have announced new restrictions on property purchases, as second- and third-tier cities across the country to try to cool soaring home prices stoked by property speculators.

Saudi Stocks Plunge to Multi-Year Lows on Austerity (Reuters)

Saudi Arabia’s stock market plunged to its lowest close since March 2011 on Sunday because of fears the government could introduce more austerity measures to curb a big budget deficit caused by low oil prices.

Bonds are way riskier than your financial adviser says (Yahoo Finance)

Last month, I mentioned that retail investors have been seduced by a can’t-lose investing strategy that might stop working (and fail spectacularly) right at the worst possible time.

Here are the top jobs in the next decade (Visual Capitalist)

Are you a job seeker looking to play a very ambitious long game?

While the automation potential of many jobs today is undoubtedly high, we also know that technology is going to create many new positions that we never could have imagined.

Atlantic City's fiscal gamble could end in
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Meanwhile, Saudi Stocks Crash Near 7 Year Lows

Courtesy of ZeroHedge. View original post here.

Despite the Deutsche-driven bounce in Western markets on Friday, the ‘panic in The Kingdom’ that we highlighted earlier in the week is accelerating fast. Following demands from officials for banks to reschedule loans to clients affected by last week’s decision to cut salaries and bonuses for state employees, Middle-East bank stocks are collapsing and Saudi’s Tadawul Index is back near its 2009 lows

The weakness – despite crude strength – was driven by Saudi Arabia’s central bank decision to direct local lenders to reschedule the consumer loans of clients affected by last week’s decision to scrap the bonuses and allowances of many state employees. As Bloomberg reports,

The Saudi Arabian Monetary Agency, as the central bank is known, said in a statement on its website on Sunday that the step was part of efforts to “reduce pressure on borrowers” whose income was cut by the government’s Sept. 26 package of measures to further trim spending.

The agency said local banks must obtain the client’s approval before rescheduling a loan. Borrowers should present proof that their income has been affected by the recent cuts to the nearest bank branch, the regulator said. Loans taken after the cabinet decision to end the payments won’t be rescheduled.

Under Deputy Crown Prince Mohammed bin Salman, the world’s biggest oil exporter has already delayed payments owed to contractors and started cutting fuel subsidies as it tries to manage lower oil prices. The measures may help narrow the budget deficit to 13 percent of gross domestic product this year and below 10 percent in 2017, according to International Monetary Fund estimates.

The cancellation of bonuses and allowances — and a simultaneous decision to lower ministers’ salaries by 20 percent — further spread the burden of shoring up public finances to a population accustomed to years of government largesse. Yet analysts have warned the cuts risk deepening the kingdom’s economic slowdown by damaging consumer confidence.

Which collapsed Saudi banking stocks to record lows…

And trust is rapidly being lost in the Saudi interbank markets…

And this is a major problem…

No help at all as oil prices rebounce post-Algiers.

As the forward market implies dramatic devaluation is looming…

And investors are loading up on record amounts of CDS protection (red line)…

Charts: Bloomberg





French Unemployment Soars: Will Hollande Keep His Word or Will He Humiliate Himself?

Courtesy of Mish.

The unemployment rate in France surged in August (the latest report) to a 12-month high of 10.5%.  French President Francois Hollande said he will not run for reelection unless the rate drops below 10%. Will he keep his word?

france-unemployment-rate2

The Financial Times reports French Unemployment at 12-Month High.

France is bucking the trend among the major economies in the eurozone, with its closely-watched unemployment rate hitting a 12-month high in August.

Europe’s second largest economy is sticking out like un sore thumb, with almost every other country in the 28 member EU trimming or holding its jobless rate.

France’s jobless rate inched up to 10.5 per cent this month according to figures from Eurostat. That’s risen steadily from 9.9 per cent in May and defied the broader eurozone-wide trend where unemployment is hugging five-year lows at 10.1 per cent.

French unemployment has become a lightning rod in the country’s political debate after incumbent president, Francois Hollande, has vowed to only stand for re-election next year if the rate falls into single figures.

The International Monetary Fund has warned France’s “structural unemployment” is set to remain elevated as the country is hampered by burdensome regulations and high tax levels.

Currently led by a former French finance minister, Christine Lagarde, the IMF has called on France to reform its minimum wage structure and boost private sector job creation through ambitious labour market reforms.

Rare Occasions

On rare occasions, make that extremely rare occasions, Christine Lagarde actually says something that makes sense. This is one of those times.

France’s wage structure, hiring and firing rules, tax structure, work hour riles, etc., etc. are all horrendous.

But at the first hint of badly needed reforms in France, What typically happens is the unions, the socialists, and the farmers dump “merde” all over the place, shutting the country down.

Then the reformers back down, and the only thing remaining is merde.


Continue reading here…





Here’s Why You May Want To Tiptoe Out Before The Party Ends

Courtesy of ZeroHedge. View original post here.

Submitted by The Wall Street Examiner’s Lee Adler, via Contra Corner blog,

Private spending on capital goods is a measure of business confidence in the economy. If business people believe the economy will grow, they invest more in plant and equipment. If they are not optimistic, they pull in their horns. This week’s Commerce Department report on Durable Goods orders contains a nugget or two that help us to see how business people are behaving in that regard.

The picture isn’t good. Apparently business people have been growing less confident in the growth potential of the US economy for the past 16 years. That belief, and the reduction in investment that follows from that belief, runs the risk of being a self fulfilling prophecy. This isn’t just a long term phenomenon. Business investment in capital goods has been flat since 2011, and has been declining for the past 2 years. Meanwhile, over the 5 years that growth in business capital spending has stalled, stock prices went to the moon. The disconnect matters.

Real Nondefense Capital Goods and Stock Prices - Click to enlarge

Capital goods have a limited life. Most need replacement within 10 years. If such replacement is delayed, as was the case during the 2008-09 crash and depression, a strong rebound is inevitable.   Replacement can only be delayed for so long, until pent up demand reaches the point where it begins to actualize.

This is inherent in the natural business cycle. Such rebounds do not require 0% interest rates to occur. Economists and central bankers may argue that ZIRP was needed to trigger such a turn in 2009, but the turn would have come whether rates were 0% or 5%. They always did so in the past, and would have done so again in 2009. The recovery that began in 2002 was a case in point.

Real Nondefense Capital Goods and Fed Funds 1999-2006 - Click to enlarge

Even assuming ZIRP was needed as a trigger, after a few months it would no longer have been. In fact, 0% interest rates have had no effect since that initial rebound. The growth phase slowed in 2012, settled into a trend of replacement only, with zero growth, and then began to steadily contract in late 2014, a trend that remains in force today.

Real Nondefense Capital Goods and Fed Funds - Click to enlarge

It appears that since 2011 we have gone through an entire business cycle with rates pinned at zero for no reason. The Fed has put


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Weekly Market Recap Oct 2, 2016

Courtesy of Blain.

The week that was…

Indexes spent much of the week following news about German banking giant Deutsche Bank (DB) – more on that below.   Worries about fines and the need for a potential bailout dogged the European banking giant Monday which hurt the broader market.  U.S. indexes then rebounded Tuesday on a post debate bounce.  Again it is not so much the market likes Hillary but she is a known commodity.

“Investors have a better idea about policies of Hillary Clinton, so any sign she is closer to the presidency is a boost for markets,” said Diane Jaffee, senior portfolio manager at TCW.

Wednesday there was some happiness about a potential agreement by OPEC to reduce oil production a tiny amount.  Then Thursday more worries about Deutsche Bank as some hedge funds reduced collateral at the bank.  Friday, news reports were floated that the potential fine by U.S. regulators of the bank would be much smaller than originally thought helped lift the stock – and the entire market by extension.

In the end the S&P 500 – after a lot of volatility – ended up nearly where it began!  For the quarter The S&P 500 gained 3.3%, while the NASDAQ surged 9.7%! BREXIT aftermath!

On the economic front orders for durable or long-lasting goods flattened out in August after a sizable gain in the prior month.  Gross domestic product in the 2nd quarter was revised up slightly to 1.4%.   Consumers spending was barely changed in August, while personal income inched and savings rate inched higher.

Here is a 5 day “intraday” chart of the S&P 500 via Doug Short.

spx-five-day

Remember when CNBC guaranteed you that if you dared support”Brexit” it would lead to the zombie apocalypse?  It actually led to the best quarter in British stocks in 3 years.

The FTSE 100 index  has banged out a 6.1% gain for the period, marking its best three-month climb since March 2013.   The pound has slumped more than 10% against other major currencies following the June 23 vote, giving U.K. companies that make a large chunk of their earnings


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WSJ Reports “No Settlement Deal” Between Deutsche, DOJ As German Econ Minister Slams Deutsche Bank

Courtesy of ZeroHedge. View original post here.

As we predicted on Friday, and as we reported earlier today, the AFP “story” of a $5.4 billion revised settlement between DB and DOJ was indeed “sources” on Twitter, and had no basis in reality. The reason: not only has John Cryan barely started the negotiations with the DOJ, and is set to arrive in the US this week to beg for mercy, but as the WSJ, which broke the original settlement story more than two weeks ago just reported, Deutsche Bank’s settlement talks with the DOJ are continuing, “with no deal yet presented to senior decision makers for approval on either side.

The talks are moving forward, but they have “not progressed to a degree that a proposed deal has reached senior-level review at the Justice Department or with Deutsche Bank’s supervisory board, people familiar with the matter said.”

While there is much more information one could hope for in what is now the most important litigation in capital markets, we will gladly take what the WSJ reports over the market-manipulating garbage spewed by AFP with the sole intent of getting both DB and the market to close higher.

Some more details from the WSJ:

“People familiar with the continuing settlement talks say details remain in flux. Justice Department lawyers have floated the possibility of also reaching accords with other European banks who have yet to resolve similar investigations and announce them at once, but no such move is certain, the people say.”

The WSJ also adds that CEO John Cryan plans to be in Washington, D.C. this week for meetings of the International Monetary Fund and World Bank. The visit has stoked speculation that he could delve in person into ongoing talks with the Justice Department. The Deutsche Bank spokesman declined to comment on any matters related to talks with Justice Department.

Meanwhile, as Deutsche ponders what rumors it will have to unleash tomorrow to provide another much needed boost to the stock, especially if the market sells off on today’s denial of the settlement speculation, German Economy Minister Sigmar Gabriel accused Deutsche Bank on Sunday of blaming speculators for last week’s plunge in its share price when the bank had itself made speculation its business.

Cited by Reuters, he said


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Breaking News And Best Of The Web

Courtesy of John Rubino.

Best Of The Web

This is why US gov. deficit numbers are a BIG lie – Wolf Street

Michael Belkin interview – King World News

Weekly commentary: A take on Deutsche Bank – Credit Bubble Bulletin

IMF’s ‘substitution fund’ to kick-start SDR as new global currency? – CDFund

The banquet of consequences is being served – Peak Prosperity

Financial repression and a chronic unemployment problem – FRA

Structural growth and dope dealers on speed-dial – Hussman

26 incredible facts about the economy every American should know – Economic Collapse

How to suffocate your economy: Drown it in massive private debt – Evonomics

3 things: The Fed’s missed window & failed realization – Real Investment Advice

Hell to pay – Peak Prosperity

Like old times: Q2 2016 flow of funds – Credit Bubble Bulletin

How bond yields got this low – Wall Street Journal

—————————————————————–

Breaking News

The Economy

10/03  It’s not just Deutsche. European banking is utterly broken  – Telegraph

10/03  Systemic risk: Deutsche Bank #1 at $100 billion – Mish

10/03  Manufacturing in US expanded at modest pace in September – Bloomberg

10/03  US construction spending crashes into contraction – Zero Hedge

10/03  How arrogant Deutsche Bank fell from grace – MarketWatch

10/03  Deutsche Bank received US bailout twice as big as Lehmans – Wall St. On Parade

10/03  Deutsche Bank shares slip again in race to reach U.S. settlement – Reuters

10/03  Kuroda ruined chance of second term, Abe aide Nakahara says – Bloomberg

10/03  Jail Wells Fargo CEO and chariman John Stumpf! – Moyers & Company

10/03  Here’s how the government is turning the entire US into a debt prison – Anti Media

10/03  WSJ reports “no settlement deal” between Detusche, DOJ – Zero Hedge

10/03  Christine Lagarde, scourge of tax evaders, pays no tax – Guardian

10/03  Meanwhile, Saudi stocks crash near 7 year lows – Zero


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David Stockman: America Now Lives Under A “Perverted Regime”

Courtesy of ZeroHedge. View original post here.

Submitted by Adam Taggart via PeakProsperity.com,

The rise of Trump – and Bernie Sanders too – vastly transcends ordinary politics. In fact, it reaches deep into a ruined national economy that has morphed into rank casino capitalism under the misguided policies and faithless rule of the Washington and Wall Street elites.
 
This epic deformation has delivered historically unprecedented set-backs to the bottom 90% of American households. They have seen their real wealth and living standards steadily deteriorate for several decades now, even as vast financial windfalls have accrued to the elite few at the very top.
 
In fact, during the last 30 years, the real net worth of the bottom 90% has not increased at all. At the same time, the top 1% has experienced a 300% gain while the real wealth of the Forbes 400 has risen by 1,000%.
 
That’s not old-fashioned capitalism at work; it’s the fruit of a perverted regime of printing press money and debt-fueled faux prosperity that has been foisted on the nation by the bipartisan ruling elites.
 
To be sure, the proximate cause of this year’s election upheaval is similar to that in Reagan’s time. Back then, an era of drastic bipartisan mis-governance generated an electoral impulse to sweep out the Washington stables.
 
Now, however, it is not just the Beltway political class that is under attack. The very foundations of American economic life are imperiled. What remained of healthy market capitalism in Reagan’s time is no more.
 
It has been battered by 30 years of madcap money printing at the Fed. It labors under the $50 trillion of new public and private debt generated by that monetary eruption. And it staggers from the destructive blows of serial financial bubbles.
 
These bubbles have self-evidently resulted in a destructive boom-and-bust cycle in the financial system, but also much more. Bubble Finance has drained productivity and efficiency from the Main Street economy and has channeled vast resources to speculators and wasteful malinvestments.
 
~ “Trumped!” by David Stockman

David Stockman, former director of the OMB under President Reagan, former US Representative, and veteran financier is an insider’s insider. Few people understand the ways in which both Washington DC and Wall Street work and intersect better than he does.

In


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Top Ten Videos – October 3

Courtesy of John Rubino.

Why the entire banking system — not just Deutsche Bank — is toast. Silver is about to soar. The making of Donald Trump.

  

Visit John’s Dollar Collapse blog here





Podcast: European Banks In The Eye Of The Storm

Courtesy of John Rubino.

Deutsche Bank, Commerzbank, the Italian banks…it’s getting ugly across the pond, and the worst is yet to come. Here’s a brief look at the reasons why, including derivatives, ridiculous capital rules, dumb lending practices and, of course, negative interest rates. If you’re looking for short sale candidates, Europe’s banks should be on the list.

db-price-oct-16

Podcast: Play in new window | Download

Visit John’s Dollar Collapse blog here





 
 
 

Zero Hedge

Enemy Of The People?

Courtesy of ZeroHedge. View original post here.

Via The Zman blog,

There has never been a time when normal people did not know the media was biased and biased in a predictable direction. For every non-liberal in the media, there were at least ten liberals. The ratio was probably higher, but then, as now, some lefties liked to pretend they were independents or some third option.

The media used to invest a lot of time denying they had a bias and an agenda, but the only people who believed them were on the Left, which had the odd effect of confirming they had a bias and an agenda.

...



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Phil's Favorites

A 2019 Earnings Recession?

 

A 2019 Earnings Recession?

Courtesy of 

Shout to Leigh!

On the new Talk Your Book – Josh Brown is joined by Leigh Drogen of Estimize, one of the leading providers of crowdsourced financial and economic data to talk about the trend in corporate profits that could potentially lead to an earnings recession later this year.

What is the thing that Leigh is seeing in the data that Wall Street isn’t yet picking up on? What segment of the stock market is most at risk? Why is the crowd smarter than the narrow consensus of Wall Street analysts?

Check out Estimize ...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Kimble Charting Solutions

Gold & Silver Testing Important Breakout Levels!

Courtesy of Chris Kimble.

Gold and Silver from a long-term perspective have created a series of lower highs over the past 8-years. Will 2019 bring a change to this trend? A big test is in play!

Gold since the lows in 2016 has created a series of higher lows, while Silver may have created a double bottom.

Gold & Silver are currently facing break attempts a (1) and (2). These falling resistance lines have disappointed metals bulls for the past few years.

The direction of Gold and Silver weeks and months from now should be highly influenced by what each does as they are attempting to break above important resistance levels.

To become a member of Kimbl...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

http://www.insidercow.com/ more from Insider

Digital Currencies

Russia Prepares To Buy Up To $10 Billion In Bitcoin To Evade US Sanctions

Courtesy of Zero Hedge

While the market has been increasingly focused on the rising headwinds in the global economy in general, and China's economic slowdown in particular, while the media is obsessing over daily revelations that Trump may or may not have colluded with Russia to get elected, a far more critical, if underreported, shift has been taking place over the past year.

As we reported in June, whether due to concerns over draconian western sanctions and asset confiscations following the poisoning of former Russian military officer Sergei Skripal, or simply because it wanted to diversify away from the dollar, Russia liquidated virtually all of its Treasury holdings in the late spri...



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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's failure based on his personality, which was evident years ago. This article, written in 2017, references a prescient article Bill wrote before Trump became president, in July, 2016, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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