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Bank Of America Reveals Nine “Reasons To Worry” About A Big Market Drop
Over the weekend, we were surprised to read that none other than recent market cheerleader Goldman Sachs had come up with six reasons why its chief equity strategist believes the market is poised for a material draw down (read “big drop”) in the coming weeks. Among these were the following: Valuation is a necessary starting point of any drawdown risk analysis. At 16.7x the forward P/E multiple of the S&P 500 index ranks in the 86th percentile relative to the last 40 years. Most other metrics paint a similar picture of extended valuation. The median stock in the index trades at the 99th percentile of historical valuation on ... -
Finance 0
Aussie Climbs On Weak Growth Report, US Dollar Slips
The dollar slipped slightly in Asian trading on Tuesday, while the Australian dollar soared after RBA minutes lessened expectations of an interest rate cut. The Aussie had already strengthened after yesterday’s rebound in crude oil futures. Minutes of the Reserve Bank of Australia’s May policy meeting showed weak price growth and the quarter point rate cut to a record low of 1.75 percent by the policymakers didn’t satisfy investors. The RBA pointed to the recent dip into deflationary territory and signaled that there would be further interest rate cuts this year. The Aussie was up 0.8 percent at $0.7349 after rising as high as $0.73... -
Finance 0
Six Major Risks Ahead – Still An ‘Uneasy Calm’ For Markets – RBS
A lack of volatility at the moment does not imply that all is well with markets. The team at RBS lists the risks ahead: Here is their view, courtesy of eFXnews: A few weeks ago we wrote of an Uneasy Calm in markets. Fed Chair Janet Yellen had just delivered her remarkably dovish speech in which she effectively pronounced the end of policy divergence. More divergence was intolerable because it strengthens the dollar, raises global volatility and weakens equities. That brings debt deleveraging to EM, hurting EM growth and hence global growth, all of which hurts the US. In parallel, policy makers globally seemed to throttle back on competitive d... -
Finance 0
Dividend Investing In A ‘Mad Men’ World
Face it, advertising is all around us. Whether we’re zoned in on a screen, large or small, hit the road or even inside a public bathroom advertising messages are constantly bombarding us. With so many companies and organizations trying desperately to get their message across it’s no wonder that the advertising space is huge. But have you ever considered the advertising agencies that are responsible for creating these ads and other public relations and marketing services? While a relatively large market exists for these communication entities, from a dividend perspective there are very few companies that are public let along pay a dividend... -
Finance 0
As Insurance Losses Mount So Do Refusals: “Sorry, We Don’t Take Obamacare”
A McKinsey study shows Obamacare insurers lost money in 2014 and the losses doubled in 2015. Amazingly, the study concludes there’s nothing to worry about because “30 percent of insurers nationwide were profitable.” Meanwhile, outright refusals to accept Obamacare mount. “Sorry, We Don’t Take Obamacare” is now a frequent response. Losses Pile Up The Hill reports Study Shows ObamaCare Insurers’ Losses Grew in 2015. The study from McKinsey & Company finds that in 2014, insurers had a margin of minus-4.8 percent, translating to an overall loss of $2.7 billion on the individual health insurance market, which includes ObamaCare... -
Finance 0
EU Bullet Report – Oil At 6 Month Highs, Drives Markets
Today’s focus turns to US and UK CPI inflation as well as US Industrial production figures for the US. Overnight, we saw a quiet session with oil’s recovery being the main theme. Stocks: Asian stocks have recovered from 2 month lows on Tuesday after a rebound in US where stock markets gained around 1% on news that Warren Buffet is investing close to 1 bln in Apple stocks. The price of Oil stabilizing has also helped risk sentiment and stock markets worldwide. Currencies: GBPUSD was a mover overnight in Asian, gaining nearly 100 points, helped by a report that the “remain” camp holds a 15 point lead over the “leave” rivals in UK’... -
Finance 0
EURUSD: Evening Target 1.1285
Yesterday’s Trading: As I expected, the euro/dollar was in a correction phase throughout Monday. The euro regained against its US counterpart to 1.1342 after a reduction in New York manufacturing activity of -9.02 against a +6.50 expected rise. By trade close, the pair had returned to 1.1315. The movement fully coincided with forecasts. Market Expectations: Today trader attention is on UK and US inflation data. Three US Fed representatives will speak later. The day won’t be easy for the euro since the pound and Aussie are significantly up against all pairs in Asia. The Aussie dollar strengthened 80 points following the publication of the ... -
Finance 0
Goldman Cites Unexpected Oil Deficit, Prices Jump
Are oil prices heading back up? After months of hitting record lows, the black gold seems to be making a comeback. According to Goldman Sachs Group, the expected deficit in oil seems to have been reached earlier than expected flipping oil prices and sending them skyward. Analysts at Goldman bank reported that after almost two years of oversupply, the oil market had hit a shortfall. The announcement sent International Brent crude futures to $48.50 per barrel up 67 cents, or 1.4 percent, from their last settlement; U.S. West Texas Intermediate crude futures were up 68 cents, or 1.5 percent, at $46.89 a barrel. Goldman raised its U.S. crude pric... -
Finance 0
Ron Paul: The Federal Reserve Is King Of The Price Fixers
In a recent episode of his video broadcast Myth Busters, Ron Paul and Chris Rosinni talked about how government destroys markets by tampering with prices. After discussing the ways government intervention has destroyed the market for health care and education in America, and looking at the negative impacts of tariffs and price supports in agriculture, they dove into the most destructive price manipulation there is – central bank manipulation of interest rates. Paul called the Fed the “king of price fixers” and said its policy of setting interest rates is ultimately responsible for most of the economic problems we face today. St. Louis ... -
Finance 0
Analyst Warns Deutsche Bank’s Problems May Now Be “Insurmountable”
Call it some no holds barred German bank on German bank action. After a tumultous start to a year that Germany’s largest, and judging by the tens of billions in legal settlements and charges also its most criminal bank, Deutsche Bank (DB), would love to forget, things got worse over the weekend when a note issued by another German bank said that either Deutsche will have to massively dilute its shareholders as a result of “insurmountable” debt, or a fate far worse could await the Frankfurt-based lender. Berenberg analyst James Chappell pulled no punches and spoke in uncharacteristically frank terms, traditionally reserves fo...
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