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Share to Twitter Share to Linkedin 2022 has been a brutal year for investors. Presently, the S&P 500 is down over 16% Year-To-Date (YTD), the Dow is down 12% YTD, the NASDAQ is down an astounding 25% and the Russell 2000 small capitalization index is down 19%. The devastation has been widespread, with a high number of stocks down over 50%. Due to this, the Nasdaq Composite, S&P 500 Growth (SPYG) and Russell 2000 (All and Growth) segments of the market have confirmed their bear market status. The O’Neil methodology tends to use -25% from highs as the threshold for a bear market. Taking the commonly used -20% from highs, the S&P 500 and Russell 2000 Value have also reached the threshold. Only S&P 500 Value and Dow Industrials have not. In our January 28, 2022 Forbes article, we noted that after two consecutive failed Follow-Through Days (FTDs)*, triggered by an undercut of prior established lows, historically (using the S&P 500 since … [Read more...] about Bear Markets & Market Bottoms

Share to Twitter Share to Linkedin Inflation is becoming a problem. Whether it becomes a long-term structural one or dissipates after the pandemic, no one knows. As the old saw goes, economic forecasts make tarot cards appear respectable. Jack Dorsey recently predicted hyperinflation , an exponential decrease in the value of paper money akin to what happened in the Weimar Republic in the 1920s—or Zimbabwe in 2007 . For that to occur, monetary policy would have to ignore the problem, failing to raise rates as the data required. A Fed that lacks political independence could make this mistake, but it’s a low-probability outcome. Even double-digit inflation—in a throwback to the seventies—is unlikely, but possible. After all, economic conditions, like bellbottoms, go in and out of fashion. The most likely scenario is some prolonged elevation to inflation (in the mid-single digits) as labor shortages and supply-chain problems continue to pressure prices. No … [Read more...] about The Best Inflation Hedge You Already Own

A new poll shows Americans are overwhelmingly against Environment, Social, and Governance (ESG) policies in corporations. American investors want corporations to prioritize profits over political and social agendas, the latest Echelon Insights poll produced for the Daily Wire reported . Investment companies use ESG scores to judge a company’s support for climate change, gender and sexual identity, treatment of workers, and a board of directors independent of its CEO. New poll between us at @EchelonInsights w/ @realDailyWire . Only 21% of investors (1,008) believe that ESG investing (environmental, social, and corporate governance) is a politically neutral endeavor. Guess which side its considered to service? @benshapiro @VivekGRamaswamy https://t.co/GMNU1zPeeB — Stephen Kent (@Stephen_Kent89) May 26, 2022 The poll found that 46% of American investors felt that companies should not take public political positions on current national topics. Fifty-six percent of … [Read more...] about POLL: Americans Overwhelmingly Reject Woke Investing Craze Sweeping Through Corporations

Share to Twitter Share to Linkedin What will deliver higher returns over the next 12 months, I bonds or bitcoin? A year ago such a question would have been silly. Today, not so much. Bitcoin BTC has struggled in 2022, down more than 10%. In contrast, I bonds are set to deliver an estimated 9.62% annualized return starting next month. Here’s what you need to know. I Bond Basics First introduced in 1998, I bonds are issued by the U.S. government. Investors purchase I bonds directly from the government via the TreasuryDirect.gov website . Unlike most other U.S. bonds, however, I bonds are designed to protect savers from the ravages of inflation. They accomplish this by adjusting the interest rate twice a year (May and November) based on changes in the CPI. Two factors determine the interest rate on an I bond: A Fixed Rate and an Inflation Rate. Combining these two rates gives us what is known as the Composite Rate. Today the Fixed Rate is … [Read more...] about I Bonds Set To Deliver Historic 9.62% Interest Rate

Major Moves The European and U.S. equity markets rebounded today in anticipation of future central bank dovishness. The Federal Open Market Committee (FOMC) has signaled that it is potentially looking to cut interest rates as early as this month, and the European Central Bank (ECB) announced at its monetary policy meeting today that it expects key ECB interest rates to remain at their present levels at least through the first half of 2020.” Traders are buying large-cap stocks in anticipation that low rates could both stimulate the economy and make it cheaper for large corporations to continue funding their share buyback programs with more debt. They are also anticipating that low rates and economic expansion could spur demand for crude oil . Crude oil can be a great indicator for anticipated economic strength. Oil prices tend to climb when traders expect the economy to get stronger, and they tend to fall when traders expect the economy to get weaker. Crude oil bounced … [Read more...] about Dovish ECB Joins the FOMC to Rally Markets

Major Moves Stocks were mixed today as investors prepared for the busiest week of first quarter earnings season . By the end of the week, more than 45% of the S&P 500 will have reported their earnings and we will have a good idea for the trend of corporate performance. Risks were somewhat compounded today following news that President Trump will make another move to curtail oil exports from Iran. Currently, some oil importers like China, South Korea and Turkey have a "waiver" from the U.S. that they will not face negative consequences for doing business with Iran. President Trump plans not to renew these waivers that expire on May 2. The administration has assumed that Iran's market share can be consolidated by Saudi Arabia and other Organization of Petroleum Exporting Countries (OPEC) nations who will increase production. Clearly, the U.S. cannot dictate production levels to OPEC, but it is reasonable to assume that if Iranian exports are reduced, Saudi Arabia will want … [Read more...] about Junk Bonds Keep Dropping as Oil Spikes

Major Moves Trading was aimless during today's session as economic and earnings data came in below expectations. While there was plenty of bad news, some of the media's hand-wringing was a great example of post-hoc rationalization. This was particularly true in the energy sector. Each Wednesday, the Energy Information Administration (EIA) releases a report of oil inventories held by commercial firms in the U.S. Like most weekly reports, the data can be very "noisy," with wide swings from week to week. In a bullish oil market, we would like to see inventories fall because purchases and shipping are picking up. The weekly oil inventory report swung back hard today to show an increase of 7.1 million barrels versus a decrease of 8.6 million barrels last week. When the two data points are added together, we see a small net decrease over the past two weeks that is more likely to be an accurate reflection of the market. Most traders expected today's news after inventories were … [Read more...] about Resistance Firms Ahead of Labor Report

The stock market's robust rally and Wall Street's optimistic mood have a growing number of observers worried, including investors, strategists , and even high ranking officials of the Federal Reserve . The “market is up almost every day, and one can almost bank on a ramp higher during the last 15 minutes,” Doug Ramsey, chief investment officer (CIO) at The Leuthold Group, said in a note cited by Barron's . "' Corrections ’ are now events that last hours, not days or weeks,” he added. The growing concern is that we are witnessing a replay of the Dotcom Bubble of the late 1990s, based on several troubling parallels. The table below and the discussion that follows cover key points in Barron's detailed analysis. 7 Signs Of A New Bubble Venture capital investments in tech companies at excessive levels A rush of highly-touted tech IPOs coming to market Financial crises in emerging market countries The Fed paused interest rate hikes in 1998, as they have … [Read more...] about 7 Ways That 2019 Mirrors The Dotcom Bubble

While we have talked about the general froth in the initial public offering (IPO) market, it is time to focus on one of the major drivers – special-purpose acquisition companies (SPACs). SPAC IPOs accounted for over half of all IPOs in 2020   and are already set to make up a majority in quarter one of 2021. This is a cause for worry in the market and, more importantly, for investors who may get caught bearing the real costs of a SPAC. We'll look at the why and how of SPACs, as well as why the odds seem tilted against individual investors realizing a good return. Key Takeaways The IPO market has been frothy of late, with tech offerings seeing huge jumps in first-day trading. Within this IPO market, SPACs are making up a larger share of new offerings. This means that more and more money is hitting the market with a plan to find something to buy. SPACs give creators and sponsors structural advantages that later investors don't have, making the decision for retail … [Read more...] about SPACs Look Like a Bubble Within a Bubble

- A + A KUALA LUMPUR (May 26): Sunway Bhd’s first quarter net profit ended March 31, 2022 (1QFY22) soared 140% to RM140.11 million from RM58.45 million in the same quarter last year on the back of higher revenue due to stronger operating performance from most business segments, except trading and manufacturing. As a result, earnings per share rose to 2.39 sen from 1.01 sen previously. Revenue grew 31.48% to RM1.11 billion from RM846.11 million a year earlier, Sunway’s bourse filing on Thursday (May 26) showed. Sunway’s property development segment reported a 13.2% year-on-year (yoy) increase in profit before tax (PBT) to RM23.41 million, due to higher progressive profit recognition from its Singapore private condominium projects, which offset lower profit contribution from local development projects. The property investment segment posted PBT of RM45 million from loss before tax of RM16.96 million in 1QFY21 on higher visitorship to the theme parks and higher … [Read more...] about Strong performance from business segments lifts Sunway’s 1Q earnings by 140% to RM140 mil