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Will Credit Cause A Slowdown

Saxo Bank thinks a slowdown in credit growth is bad news

IF THERE is a consensus at the moment, it is that the global economy is finally managing a synchronised recovery. The purchasing managers' index for global manufacturing is at its highest level for six years; copper, the metal often seen as the most sensitive to global conditions, is up by a quarter since May

But Steen Jakobsen of Saxo Bank thinks…

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Admin

Market Complexity Could Trigger the Next Crash

Complex systems are all around us.

By one definition, a complex system is any system that features a large number of interacting components (agents, processes, etc.) whose aggregate activity is nonlinear (not derivable from the summations of the activity of individual components) and typically exhibits hierarchical self-organization under selective pressures.

In today’s infographic from Meraglim we use accumulating snow and an impending avalanche as an example of a complex system – but really, such systems can be found everywhere. Weather is another complex system, and ebb and flow of populations is another example.

Markets are Complex Systems

Just like in the avalanche example, where various factors at the top of a mountain (accumulating volumes of snow, weather, temperature, geology, gravity, etc.) make up a complex system that is difficult to predict, markets are similarly…

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Admin

China Plans To Ban Sales Of Fossil Fuel Cars Entirely

China’s big electric vehicle push is about to get even bigger: The country is planning to end the sale of fossil fuel-powered vehicles entirely, with regulators working currently on a timetable of when the ban will ultimately take effect, according to Bloomberg.

China is the world’s largest auto market, with 28.03 million vehicles sold last year, a boost in demand of 13.7 percent vs. 2015 sales numbers. The nation has already done a lot to incentivize manufacturers to develop and sell new EVs, including allowing foreign automakers to create a third joint venture with local automakers (a standard requirement for doing business in the country for auto OEMs) so long as it’s dedicated to the creation of EVs exclusively.

The government has also created a number of incentive programs for…

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Admin

Well, here it comes—September. It’s widely considered the worst month of the year for equities for good reason since it has historically seen the worst performance. Per Ryan Detrick, Senior Market Strategist, “September is the banana peel month, as some of the largest dips tend to take place during this month. Although the economy is still quite strong, this doesn’t mean some usual September volatility is out of the question—in fact, we’d be surprised it volatility didn’t pick up given how calm things have been this year.”

With the Federal Reserve, Bank of Japan, and the European Central Bank all set to announce interest rate decisions this month, and the S&P 500 Index up on a total return basis nine consecutive months as of the end of July, the stage is set for some fireworks in September.

Here’s some data to consider as September approaches:

• Since 1928, no month sports a lower average return than September, with the S&P 500 down 1.0% on…

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Admin

Watch The Potential Double Tops

Doubles Tops are forming in two key ETFs, the Semiconductor SPDR (XSD) and the Consumer Discretionary SPDR (XLY), and chartists should watch these important groups for clues on broad market direction in the coming week or two. First, let's talk about the Double Top. These patterns form with two peaks near the same level and an intermittent trough that marks support. A break below support confirms the pattern and targets a move based on the height of the pattern. 

Achtung! A Double Top is just a POTENTIAL Double Top until confirmed with a break below the intermittent low. In other words, the trend is still up as long as support holds. Furthermore, Double Tops are bearish reversal patterns and trend continuations are more likely that trend reversals. 

The chart above shows a potential Double Top…

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Admin

How Big Oil Will Die

It’s 2025, and 800,000 tons of used high strength steel is coming up for auction.

The steel made up the Keystone XL pipeline, finally completed in 2019, two years after the project launched with great fanfare after approval by the Trump administration. The pipeline was built at a cost of about $7 billion, bringing oil from the Canadian tar sands to the US, with a pit stop in the town of Baker, Montana, to pick up US crude from the Bakken formation. At its peak, it carried over 500,000 barrels a day for processing at refineries in Texas and Louisiana.

But in 2025, no one wants the oil.…

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Admin

It's All About Advertising

When people think of Facebook as a company, they mostly think of it synonymously with Facebook the social network. However, Facebook Inc. is much more than that, as today’s chart nicely illustrates. With WhatsApp, Instagram and of course the namesake Facebook and Messenger, the company owns four of the world’s largest social media / messaging services. Facebook alone reaches more than 2 billion people per month and both WhatsApp and Messenger also passed the billion-user milestone recently. Tencent, the Chinese company behind WeChat and Qzone might also boast a billion users in total, but still doesn’t come close to Facebook’s global footprint.

What all of the services mentioned below have in common, is their immense attractiveness to advertisers. Not only do they all boast hundreds of millions of users, but they also have the ability to target specific groups…

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Admin

Are Investors Getting Too Bulled Up?

Ran across this post and found it interesting although anything that's only been around 7-1/2 years is truly untested but only time will tell.  All eyes are on Congress for a break in taxes for the wealthy, as well as 'stumbles' from our leader and chief, Mr. Trump.  Between the Russia investigation and foreign relations (yikes!) the tension is building, or at least being applied by the left.  Will they reach the proportions where firms hit the 'sell' button? I have to say that September is coming -  the worst month for the market thanks to Mutual Fund profit taking at end of fiscal year.  Anything is possible.  Enjoy the ride.  From LyonsShare:

Sentiment indicators can be useful tools for investors, mainly on a contrarian basis. That is, generally when readings get overly bullish, it may signal a lack of remaining buyers in the…

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Admin

A Timeline Of Future Technology

A Timeline of Future Technology

Making predictions about future technology is both fun and notoriously difficult.

However, such predictions also serve a very practical purpose for investors and business leaders, since failing to adapt to changing industry paradigms can completely decimate a business venture, turning it into the next Blockbuster, Kodak, or Sears.

Today’s infographic from Futurism rounds up some of the most interesting predictions about the future, from trusted sources such as Scientific American and The National Academy of Sciences.

Machines,Big and Small

The confluence of robotics, artificial intelligence, and increasing levels of automation is a prevailing trend throughout the…

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Admin

Growth in the global electric-vehicle market

With the recent announcement from Volvo that all vehicles will have electric engines in 2019 and phase out combustion engines, it becomes shockingly clear that electric is growing.................and faster than we have previously believed. Clearly Tesla (TSLA) has more competition than ever before so I bring you this piece from McKinsey to give you the breakdown. By the way, what does this mean for crude oil?  Just tossng it out there.

New research on electric mobility reveals Chinese OEMs produced 43 percent of EVs worldwide in 2016 and highlights other trends in supply and demand.

China has increased its lead in electric-vehicle (EV) production,…

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Admin

It’s hard to predict when a stock market crash will occur, so the best defense is to be prepared.

Today’s infographic comes to us from StocksToTrade.com, and it explains what happens when a large enough drop in the market triggers a “circuit breaker”, or a temporary halt in trading.

What Happens To Trading in a Market Crash?

These temporary halts in trading, or “circuit breakers”, are measures approved by the SEC to calm down markets in the event of extreme volatility. The rules apply to NYSE, Nasdaq, and OTC markets, and were put in place following the events of Black Monday in 1987.

Circuit Breaker Rules

Previously, the Dow Jones Industrial Average (DJIA) was the bellwether for such market interventions.

However, the most recent rules apply to the whole market when a precipitous drop in the S&P 500 occurs:…

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Admin

The FANG Fantasy

With the “FANG” trade getting long in the tooth, so to speak, Wall Street analysts are now scrambling to formulate new acronyms to accommodate the most robust names in Big Tech today. FAANG, FAAA, FAAMG and now FANTASY have been brought forward adding companies like Microsoft, Tesla and Nvidia to the original FANG Fab-Four of Facebook, Amazon, Netflix and Google.

As market warning signs so, they don’t get better than this. Widely…

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Admin

Y Combinator, one of best-known Silicon Valley accelerators, has an impressive track record of success. With well-timed investments in Dropbox, Stripe, and Airbnb, the startups in the company’s portfolio are now worth an aggregate of $600 billion in market capitalization.

While Y Combinator has made a clear impact on the tech sector, the company also launched an internal side project in 2007 that would end up becoming highly influential in a different and surprising way.

Its user-powered news aggregator called Hacker News, which is now visited by 20 million people per month, has become a mainstay for entrepreneurs, tech professionals, and venture capitalists around the world. Using a Reddit-like interface, users can upvote and downvote articles that they think have the most relevance to trends and issues affecting the tech sector.

Data Mining For Trends

Today’s charts come to us from…

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Admin

The Growth Of Data Breaches Worldwide

Courtesy of: Visual Capitalist

The graphic above shows a timeline of some of the biggest data breaches on record. Each bubble represents the number of records lost in any given breach, with the most sensitive data clustered toward the right side.

This data visualization comes to us from Information is Beautiful. Go to their site to see the highly-recommended interactive format that visualizes the same data, while providing additional details on each specific hack.

Before 2009, the majority of data breaches were the fault of human errors like misplaced hard drives and stolen laptops, or the efforts of “inside men” looking to make a profit by selling data to the highest bidder.…

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Admin

Finding High Quality Companies 'Today'

We are having a hard time finding high-quality companies at attractive valuations.

For us, this is not an academic frustration. We are constantly looking for new stocks by running stock screens, endlessly reading (blogs, research, magazines, newspapers), looking at holdings of investors we respect, talking to our large network of professional investors, attending conferences, scouring through ideas published on value investor networks, and finally, looking with frustration at our large (and growing) watch list of companies we’d like to buy at a significant margin of safety. The median stock on our watch list has to decline by about 35-40% to be an attractive buy.

But maybe we’re too subjective. Instead of just asking you to take our word for it, in this letter we’ll show you a few charts that not only demonstrate our point but also show the magnitude of the stock market’s overvaluation and, more importantly, put it into historical context.

Each chart examines…

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Admin

A Big Move Lies Ahead

Past tense; that is.  A big move is coming in the S&P 500 and it will take everyone’s breath away. Simply put: The S&P 500 has traded in a multi-year consolidation range with a high of 2134 and a low of 1810. A breakout or breakdown out of this range could result in a measured technical move of the height of the range, i.e. 2134 – 1810 = 324 handles. Consequently a break toward the upside would target 2458 (15% above all time highs) and conversely a breakdown would target 1486 and represent a 30.4% correction off of all time highs.

I’ve outlined the bear arguments in detail in Feeding the Monster, so I won’t bother rehashing them here. However, in analyzing the larger market structures an interesting duality is emerging: A fight for control…

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Admin

Earnings Growth Likely Peaked In Q1

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actuals and estimates for the current and following periods, please click here>>>

Here are the key points:

•    The Q1 earnings is effectively over now, with results from 492 S&P 500 members already out. Total earnings for these companies are up +13.5% from the same period last year on +7.2% higher revenues, with 72.6% beating EPS estimates and 65.2% beating revenue estimates.

•    These results represent a notable improvement over what we have been seeing from the same group of companies in other recent periods. While growth reached the highest level in more than 5 years, a bigger proportion of companies have been able to beat estimates,…

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Admin

The Big Picture

First and foremost let me point out that Ray Dalio, founder of investment firm Bridgewater Associates, has joined Twitter so I encourage you to follow him here.  Secondly I suggest you grab a cup of coffee or maybe the entire pot as he gradually lays out what he sees ahead for the market.  Enjoy!

Big picture, the near term looks good and the longer term looks scary. That is because:

  1. The economy is now at or near its best, and we see no major economic risks on the horizon for the next year or two,
  2. There are significant long-term problems (e.g., high debt and non-debt obligations, limited abilities by central banks to stimulate, etc.) that are likely to create a squeeze,
  3. Social and political conflicts are near their worst for the last number of decades,…

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