Posts Tagged ‘market outlook’

Monday Morosity – “Hard Times Ahead” says Rajoy

Hard times ahead!

Mariano Rajoy won the biggest majority in a Spanish election in almost 30 years, and told Spaniards to brace for hard times as the nation fights to avoid being overwhelmed by the debt crisis. Bonds continued to drop.  Rajoy’s People’s Party swept the ruling Socialists from power after eight years, winning 186 of the 350 seats in Parliament, compared with 110 for the Socialists’ candidate Alfredo Perez Rubalcaba.

Hard times lie ahead,” Rajoy, 56, told supporters outside the PP’s headquarters in Madrid, giving no new details of his plans. “We are going to govern in the most delicate situation Spain has faced in 30 years.”

Spanish borrowing costs continued rising toward euro-era records (6.6% this morning) even as the PP won a mandate to slash the budget deficit, overhaul the stagnant economy and reduce the 23 percent jobless rate.  Rajoy, who hasn’t given details of his proposals, won’t take over for a month, prompting him to say on Nov 18th he hoped Spain wouldn’t need a bailout before he’s sworn in.  Miguel Arias Canete, head of the PP’s electoral committee and a former minister, said today markets need to give the party time, as ministers won’t be appointed until Dec. 21 and Spanish law doesn’t allow Parliament to resume any sooner than Dec. 13.

So NO QUICK FIX IN SPAIN IS POSSIBLE – let’s face that fact now so we’re not endlessly surprised by it as the rumor-mongers can now have a field day attacking the lame-duck outgoing Government ahead of the transition.  Meanwhile, our own do-nothing Congress looks to be heading towards certain disaster as we have what appears to be a TOTAL FAILURE of the US Deficit Reduction Committee to do anything to actually reduce our deficit.  

Now I don’t want to point fingers (cough, Republicans, cough, cough) ahead of our National Holiday that celebrates unity and goodwill and crap like that.  Let’s just say "they" couldn’t agree, so now it’s going to be Hard Times for America as we, in theory, will kick in $1.2Tn of automatic cuts including (gasp!) over 5% of our nation’s Trillion-Dollar annual Defense budget.  Oh, not until 2013, of course because our Government doesn’t really have the balls to cut anything under any circumstances.  

EXCEPT, of course, aid to the poor.  THAT they can cut and cut and cut and cut.  Payroll tax cuts –…
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GURU OUTLOOK: PAOLO PELLEGRINI

GURU OUTLOOK: PAOLO PELLEGRINI

Courtesy of The Pragmatic Capitalist 

This week’s Guru Outlook brings you Paolo Pellegrini.  Although he is not the most well known of investment gurus Pellegrini has built quite a name for himself in recent years.  Before founding his own hedge fund PSQR (a play on PP Squared) Pellegrini was John Paulson’s right hand man at Paulson and Co (see Paulson’s guru outlook here & most recent strategy comments here).  Of course, Paulson and Co. made waves during the sub-prime crisis when they made billions shorting the market during the crisis.  Pellegrini was instrumental in devising the strategy.  Like Paulson, however, Pellegrini wasn’t a one trick, short the market, pony.  In 2009 he crushed the market with a 61.6% return in his fund after he made big bets on a rising oil market and a tanking treasury market.

So where does Pellegrini see the market going now?  In a recent letter to shareholders he said:

“the structural problems that precipitated the Great Recession around the globe remain unresolved”

He says we are essentially papering over the problems with more debt.  We are simply adding more debt to a debt-laden world while China adds more exports to a saturated market.  He says the problems in Europe are a harbinger of these continuing issues.   Thus far the massive stimulus has been successful in jumpstarting the global economy, but is nothing more than a temporary respite from the longer-term structural problems that remain.

Pellegrini’s favorite trades in 2010 are the following four:

  • Short US fixed income
  • Short US equities
  • Short US dollar
  • Long commodities

The short trade on fixed income is a reflection of the likelihood for higher yields as investors grow increasingly fearful of the U.S. as a steward of its debt.  Pellegrini believes demand for treasuries will decrease in the coming years.

In terms of equities Pellegrini says valuations are becoming stretched as organic growth fails to match expectations. He also believes higher taxes could ultimately be a net negative for equities.

Pellegrini is short the dollar based on the expectation of more stimulus.  He predicts that policymakers will come back to the taxpayer asking for another handout as they explain their first stimulus plan was not a failure, but simply too small.  He says the dollar will “plunge” if this occurs.

The one sector of the market Pellegrini likes is commodities.  He says they…
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Karl Denninger’s 2010 Outlook

Interview with Karl Denninger, courtesy of Miss Trade – Ilene

Karl Denninger’s 2010 Outlook

Karl Denninger recently made his annual Where Are We, Where We’re Heading Post. We invited him on MissTrade TV to give us his input on the year ahead.

 


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Steve Meyers: Market Outlook and Analysis for 2010

Steve Meyers: Market Outlook and Analysis for 2010

Courtesy of Jesse’s Café Américain


 


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PRUDENTIAL’S 2010 MARKET OUTLOOK

PRUDENTIAL’S 2010 MARKET OUTLOOK

Courtesy of The Pragmatic Capitalist

Businessman gazing into crystal ball

Strategists at Prudential are among the most bullish on Wall Street (for more very bullish outlooks please see RBC’s outlook, Merrill’s outlook & JP Morgan’s outlook).   They see further government stimulus, low interest rates and the inventory rebuild driving the S&P up to 1,350 by the end of 2010 for a full 23% rally from current prices.

They believe inflation is likely to remain low as slack in the economy, high unemployment and low capacity utilization keep prices under wraps.

They remain very bullish on equity markets for 5 primary reasons:

1) GDP rebound sustaining in Q4 and into 2010, and growth expectations being revised higher.

2) Q3 earnings surprising on the upside outlook and earnings recovering further in Q4 and 2010 with solid GDP growth, widening margins and improved pricing power.

3) Inflation moving from disinflation to low inflation with excess capacity and high unemployment.

4) Global central banks holding interest rates at crisis lows levels, long-term rates remaining low, and plenty of liquidity.

5) Continued stabilization in financial market conditions and risk appetite improving further.

How to play it?  They want to be overweight stocks and underweight bonds.  More specifically, they prefer emerging market and UK equities with a modest overweight in the Eurozone while being underweight Japan and the U.S.

In terms of sectors they prefer energy, info. tech, and materials with a modest overweight in financials and industrials.  They are neutral consumer discretionary with modest underweights in consumers staples and healthcare.  They underweight utilities and telecomm.

In the bond market they like emerging markets and Japanese debt with a modest overweight in UK debt.  They are neutral on the Eurozone and underweight US debt.

The tend is much the same in terms of forex.  They like the Euro and emerging market currencies, remain neutral on sterling & Yen with an underweight on the dollar.

Source: Prudential

 


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Kimble Charting Solutions

Financial Crisis Deja Vu: Home Construction Index Double Top?

Courtesy of Chris Kimble

Most of us remember the 2007-2009 financial crisis because of the collapse in home prices and its effect on the economy.

One key sector that tipped off that crisis was the home builders.

The home builders are an integral piece to our economy and often signal “all clears” or “short-term warnings” to investors based on their economic health and how the index trades.

In today’s chart, we highlight the Dow Jones Home Construction Index. It has climbed all the way back to its pre-crisis highs… BUT it immediately reversed lower from there.

This raises concerns about a double top.

This pr...



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Insider Scoop

A Peek Into The Markets: US Stock Futures Plunge Amid Coronavirus Fears

Courtesy of Benzinga

Pre-open movers

U.S. stock futures traded lower in early pre-market trade. South Korea confirmed 256 new coronavirus cases on Thursday, while China reported an additional 327 new cases. Data on U.S. international trade in goods for January, wholesale inventories for January and consumer spending for January will be released at 8:30 a.m. ET. The Chicago PMI for February is scheduled for release at 9:45 a.m. ET, while the University of Michigan's consumer sentime...



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Zero Hedge

Coronavirus Paralyzes Global Credit Market As New Issuance Crashes To Zero

Courtesy of ZeroHedge View original post here.

In the early days, when virtually nobody paid attention to the coronavirus pandemic which China was doing everything in its power to cover up, markets were not only predictably ignoring the potential global plague - after all central banks can always print more money, or is that antibodies - but until last week, were hitting all time highs. All that changed when it became apparent that for all its data manipulation, China was simply unable to reboot its economy as hundreds of millions of workers refused to believe the government had the viral plague under control, starting...



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Phil's Favorites

The PhilStockWorld.com Weekly Webinar - 02-26-2020

 

For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here.

Major Topics:

00:02:13 - Indices | S&P 500
00:10:09 - COVID-19 & The Market
00:12:30 - John Hopkins Virus Chart
00:17:00 - DJIA
00:18:22 - INQ | Futures
00:19:23 - STP
00:20:06 - LTP
00:24:46 - GOLD
00:25:45 - Money Talk Portfolio | Butterfly Portfolio
00:27:20 - IMAX
00:30:01 - Checking on the Markets
00:30:54 - Money Talk Portfolio
00:31:00 - Butterfly Portfolio
00:31:08 - Future is Now Portfolio
00:31:12 - Dividend Portfolio...



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Biotech & Health

Could coronavirus really trigger a recession?

 

Could coronavirus really trigger a recession?

Coronavirus seems to be on a collision course with the US economy and its 12-year bull market. AP Photo/Ng Han Guan

Courtesy of Michael Walden, North Carolina State University

Fears are growing that the new coronavirus will infect the U.S. economy.

A major U.S. stock market index posted its biggest two-day drop on record, erasing all the gains from the previous two months; ...



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The Technical Traders

SPY Breaks Below Fibonacci Bearish Trigger Level

Courtesy of Technical Traders

Our research team wanted to share this chart with our friends and followers.  This dramatic breakdown in price over the past 4+ days has resulted in a very clear bearish trigger which was confirmed by our Adaptive Fibonacci Price Modeling system.  We believe this downside move will target the $251 level on the SPY over the next few weeks and months.

Some recent headline articles worth reading:

On January 23, 2020, we ...



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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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Chart School

Oil cycle leads the stock cycle

Courtesy of Read the Ticker

Sure correlation is not causation, but this chart should be known by you.

We all know the world economy was waiting for a pin to prick the 'everything bubble', but no one had any idea of what the pin would look like.

Hence this is why the story of the black swan is so relevant.






There is massive debt behind the record high stock markets, there so much debt the political will required to allow central banks to print trillions to cover losses will likely effect elections. The point is printing money to cover billions is unlikely to upset anyone, however printing trillions will. In 2007 it was billions, in 202X it ...

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Members' Corner

Threats to democracy: oligarchy, feudalism, dictatorship

 

Threats to democracy: oligarchy, feudalism, dictatorship

Courtesy of David Brin, Contrary Brin Blog 

Fascinating and important to consider, since it is probably one of the reasons why the world aristocracy is pulling its all-out putsch right now… “Trillions will be inherited over the coming decades, further widening the wealth gap,” reports the Los Angeles Times. The beneficiaries aren’t all that young themselves. From 1989 to 2016, U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. More ...



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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.