Has the global economy peaked? The First quarter corporate earnings season will soon dominate the business headlines and might provide traders/investors with some guidance as to whether the global economy has peaked and heading for a slow down. But keep in mind that corporate earnings which is a leading economic indicator has its limitations when trying to gauge whether the global economy has peaked. Put simply, corporate earnings is...
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Different generations invest differently, according to a recent finding from Visual Capitalist. Just how different generations invest was revealed in a recent survey where a sample population representing three generations, millennials (18-34 yrs), Generation Xers (35-54 yrs and Baby boomers 55+ years where asked how they would invest 10,000 dollars. Note that the survey was asking how each generation would spend the money as there...
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The endless growth story is flawed. Think about it. What happens to economic growth when every available space of land is developed, when all the necessary infrastructure is built, when innovation is exhausted and all untapped markets are exploited? That is the point when the economy has reached peak growth-the economy can’t grow anymore. Should then the endless growth story be put on the fiction shelf? From the above, it would...
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The impact of world trade war 1 has recently been weighing on investor sentiment and it is for good reason. First shots of a trade war were fired March 22 with Trump’s $60 billion tariffs on Chinese high tech and other Chinese goods impacting 100 categories. So it is no longer political rhetoric a world trade war is underway. The Trump administration, now surrounded by generals and hawks, is riding on the torrent of...
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Is a trade war on the horizon? “When a country (USA) is losing many billions of dollars in trade with virtually every country it does business with, trade wars are good and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!” tweeted US President Trump. It would be unwise for investors/traders to write Trump’s tweet off as political...
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A bear market in stocks is now within sniffing distance. Stocks are said to be technically in a bear market when prices fall 20% from their 52 week high and when the price of investments fall over time. It is when stocks prices make lower highs and lower lows over time. So the S&P 500 will technically be in a bear market when it falls 20% from its high of 2872.87 (which it reached January 26). Who are the wins and losers in a...
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Could a rising risk of stagflation, which is defined as a troubling combination of high inflation, declining consumer demand and high unemployment (or decline workforce participation rate) be real? If last week’s official economic data from the US is more than a temporary blip and a growing trend then the worse type of inflation, stagflation could be dead ahead. The official narrative goes something like this. The world’s...
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Could the current nosedive in risk asset prices be similar to the story of Icarus? There is sound logic to believe that last week’s rout in stocks is more than just a healthy correction and that prominent traders are positioning themselves for the Icarus trade. Indeed, Ray Dalio’s big short $13 billion in stocks, particularly Italian financial stocks confirms that heavyweight players are betting on the Icarus trade, a bear...
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I picture an oracle sitting on a mountaintop pondering over what the Fed’s next move will be. Buckle up for some volatility because the stock market is at a crossroad-it could get dicey going forward. Whether this recent financial smash up is the end of this secular bull market in stocks and the beginning of a new secular bear market, or perhaps this recent sell-off is a healthy bull market correcting itself and then will go on...
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Could the least expected outcome, a financial smash-up be on the cards? The idea that stocks are heading for a melt-up, that trillions of dollars of liquidity will gravity towards stocks away from bonds makes sense in a world of functioning market dynamics and where price discovery, the fundamentals dictate price. But the post-2008 financial crisis tipped markets out of their usual orbit. Asset prices have since been orbiting around...
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