If you want a central banker to choke on his croissant, read him this quote from socio-historian Immanuel Wallerstein: “Countries (have lost the ability) to control what happens to them in the ongoing life of the modern world-system.” Stated another way, Wallerstein is asking: what do central banks no longer control? The quote is from Wallerstein’s recent meditation on China: China is Confident: How Realistic? “The question is how realistic is this self-assessment of China? There are two premises embedded in China’s self-confidence, whose validity need to be investigated. The first is that countries, or rather the...
All dividend-paying stocks are not equal. Some may be very high risk; some will putter along, while others may be the salvation for those desperate for income. Why consider them? How do you pick the right ones? Since the 2008 bank bailouts, even with the recent increases, interest rates have been at historically low levels. Many who thought they had bulletproof retirement plans learned a bitter lesson. The interest rates they anticipated from CDs and ultra-safe bonds no longer exist. Retirement plans for all generations had to be revised in light of today’s reality. I contacted good friend and former colleague Lee Campbell who is now with I...
The Canadian dollar is struggling with the tumbling price of oil. What’s next? Here is their view, courtesy of eFXnews: In our view, USD/CAD will be dominated by the trend in the ‘big dollar’ over the coming months. This is because Canadian domestic data has little impact on Canadian rates at the moment and because we do not expect much momentum in oil prices. The recent uptick in USD/CAD corrects some of the current undervaluation. We expect 2Y rate differentials to widen further by around 30bp by Q317 as the market prices in further Fed hikes. This should drive USD/CAD to 1.38, or slightly below the peak of 1.40 that we have been for...
One global stock market that has an extremely interesting trend is China’s stock market. It is no secret that InvestingHaven’s research team is bullish long term, and loyal readers have followed the trend since last year. InvestingHaven was among the lonely voice last year to fire an alert to international investors, in the first half of last year, recommending to Watch China Closely As It Was Close To Breaking Out. “Well, we have news for you, China is potentially ready for a big breakout, which would lead to a new bull market.” That was at a time when the Shanghai stock market index was trading 10 percent below today’s level. A ...
The stock market is pricing in flawless results from the GOP in terms of fiscal policy. To analogize, it’s like when the market is expecting a company to beat earnings estimates and raise guidance. If the company meets expectations, the stock falls after hours because it’s priced for perfection. I have a few charts to review which show the market is expecting too much. Next, I’ll go over the GOP’s healthcare plan. Healthcare is the lynchpin to the GOP achieving its fiscal policy objectives. It also works as a signal to tell investors whether the tax code will be overhauled. If the healthcare plan and tax code change don’t get throug...
Although he didn’t state it specifically in his November 2010 Washington Post op-ed formally justifying QE2, it was very clear that then-Fed Chairman Ben Bernanke intended it to work through lending and especially the bank channel. Though he doesn’t explain, nor has any official ever, why a second one was needed given that the first was “quantitatively” determined, Bernanke was unusually clear about what he expected to happen for it: This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent actio...
Our Stock Chart of the day is the US Oil Fund (USO) and we are going to review the stock charts using our multi period contrarian trading style. We believe that the crude oil is in a secular bear market. The bear market in crude oil is set to continue as we have now broken key technical support levels. The weekly RSI, Williams % R and Stochastics have been flashing sell signals since mid February 2017. It was only this week on a surge in the US Dollar that the price of oil collapsed bringing the US Oil Fund along with is. I will also caution that the high yield debt market is also rolling over as they are highly exposed to the US and Canadian...
The Chart of the Day belongs Mesoblast (MESO). I found the biomedical stock by using Barchart to sort today’s Top Stocks to Own list first for the most frequent number of new highs in the last month, then again for technical buy signals of 80% or better. Since the Trend Spotter signaled a buy in 2/17 the stock gained 18.72%. Mesoblast Limited is a global leader in developing innovative cell-based medicines. The Company has leveraged its proprietary technology platform, which is based on specialized cells known as mesenchymal lineage adult stem cells, to establish a broad portfolio of late-stage product candidates. Mesoblast’...
The market has rallied off the 2009 lows, and most people are convinced that the Fed powered the move. In fact, most were certain that once QE ended, the market would drop. And, they currently maintain this conviction despite the fact that the market has continued significantly higher well beyond the cessation of the QE program. Anecdotal and Other Sentiment Indications “Markets are manipulated.” “The only reason the stock market is this high is because of the Fed.” Yes, I know. We have all heard these reasons as to why the market is as high as it currently stands. Most simply have not believed in the stock market rally, so they...
It looks like the short-term trend has peaked. Actually, it probably peaked a few days ago. The market advance/declines and up/down volume are pointing lower. Junk bonds have been hinting at some weakness for a couple days. Small caps are following junk bonds lower, but so far they are just testing the bottom of their range. The bullish percent has broken down below its range, and it looks headed lower. Inflation-sensitive areas of the market are getting hit hard. It is too soon to call the top of the medium-term trend, but the indicators look toppy. For instance, the number of new highs has dried up. This indicator let me down last month. ...