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Peter Schiff: There Is Only One Type Of Inflation

Peter Schiff: There Is Only One Type Of Inflation Via SchiffGold.com, When talking heads and politicians talk about inflation, they tend to make distinctions between “food inflation,” or “energy inflation,” or “wage inflation.” In this clip from his podcast, Peter Schiff explains that this isn’t the right way to look at inflation. In fact, there’s only one type of inflation. And the Federal Reserve is the source of it. They always have some kind of word that they want to use to preface inflation. But that really just lets the Federal Reserve off the hook for creating the inflation. Because if they say, ‘We have food inflation,’ well, now people want to blame the farmers, right? They’re doing something. If it’s ‘wage inflation,’ well, let’s blame those workers, or let’s blame the unions, or whatever it is that they want to blame it on. But the real blame belongs with the Fed.” Pundits and politicians often talk about “commodity inflation.” But Peter said there is no such thing. Individual commodity prices can rise and fall. Certain commodity prices can spike. But that’s not inflation. The only way that all prices could go up is if the Fed creates the inflation. Because if there are supply bottlenecks in one particular commodity and the price of that commodity goes up, the price of some other commodity is going to go down, or some other service, to offset that because there’s only a certain amount of money in the economy, and if you have to spend more on one thing, then you’ve got to spend less on something else. So, the only way you’re going to get the price of everything going up is if the government is creating inflation.” This is exactly what the Federal Reserve is doing. And that’s exactly why we’re seeing widespread rising prices. The central bank has created trillions of dollars out of thin air over the last 18 months. This is the precise definition of inflation. As economist Milton Friedman once put it, “Inflation is always and everywhere a monetary phenomenon.” An increasing money supply means more dollars chasing roughly the same amount of stuff. As a result, prices rise. As economist Daniel Lacalle explained, “More supply of money directed towards scarce assets, be it real estate or raw materials. The purchasing power of money goes down.” The bottom line is you never want to say “wage inflation” or “goods inflation.” It’s just inflation. It’s monetary inflation. That’s all it is. That’s what’s being inflated - the supply of money. And so that’s why we’re seeing prices going up.” Peter said part of the problem is a lot of the people in the financial media don’t even know what inflation is. The question is why don’t they know the real meaning of inflation? That has to do with the success of the government’s propaganda campaign to confuse the public and the media as to the true definition of inflation so that they don’t realize what the source is. Because once you properly define inflation, then there’s only one source, and that’s the US government and the Federal Reserve. The US government runs the budget deficits, and then the Federal Reserve monetized those deficits — prints more money. So, both the Fed and the government work together to create that inflation.” Tyler Durden Tue, 10/26/2021 - 13:15.....»»

Category: personnelSource: nytOct 26th, 2021

Avoid AMC Entertainment; Metaverse Real Estate Selling Like Hotcakes

Whitney Tilson’s email to investors suggesting to avoid AMC Entertainment Holdings Inc (NYSE:AMC); investors snap up metaverse real estate in a virtual land boom; Scott Galloway: Inflated. Q3 2021 hedge fund letters, conferences and more Avoid AMC Entertainment 1) The 25 stocks in my “Short Squeeze Bubble Basket” that I identified in my January 27 […] Whitney Tilson’s email to investors suggesting to avoid AMC Entertainment Holdings Inc (NYSE:AMC); investors snap up metaverse real estate in a virtual land boom; Scott Galloway: Inflated. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Avoid AMC Entertainment 1) The 25 stocks in my "Short Squeeze Bubble Basket" that I identified in my January 27 e-mail have declined by an average of 34%, while the S&P 500 Index has risen by 22% – 56 points of underperformance. However, one notable exception is the largest movie theater operator in the world, AMC Entertainment (AMC), which is up 52% since then. So am I throwing in the towel and admitting a mistake? Heck no! This article is a good summary of why AMC continues to be among my least favorite stocks: Movie theaters must 'urgently' rethink the experience, a study says. Excerpt: About 49% of pre-pandemic moviegoers are no longer buying tickets. Some of them, roughly 8%, have likely been lost forever. To win back the rest, multiplex owners must "urgently" rethink pricing and customer perks in addition to focusing on coronavirus safety. Those were some of the takeaways from a new study on the state of the American movie theater business, which was troubled before the pandemic – attendance declining, streaming services proliferating – and has struggled to rebound from coronavirus-forced closings in 2020. Over the weekend, ticket sales in the United States and Canada stood at roughly $96 million, compared to $181 million over the same period in 2019. I, for one, have yet to return to a movie theater, even as pretty much every other aspect of my life has gone back to normal (sporting events, Broadway shows, etc.). I was actually planning to see the new movie about Venus and Serena Williams' father, King Richard, but then saw it was released simultaneously on HBO Max, so my wife and I just watched it at home (and loved it). This new development is very bad news for AMC... Investors Snap Up Metaverse Real Estate 2) I'm no longer in the short-selling business (thank goodness!), but if I were, I'd feel perfectly comfortable shorting AMC, especially now that it's already been pumped to the moon by the Reddit speculators and subsequently crashed (it's down nearly 60% from its all-time high on June 2). While, as we've seen, it could trade anywhere in the short term. At the end of the day, its stock will ultimately be valued on the performance of the underlying business, which I believe will be dreadful relative to the expectations built into its current $15 billion market cap and $24 billion enterprise value. I don't even think the company is worth $9 billion in net debt, meaning the stock will eventually be worthless. But as an old-school value guy, I take zero comfort in evaluating things like cryptocurrencies, non-fungible tokens ("NFTs"), and the latest craze, buying real estate in the metaverse. I'm not making this up – here are two recent in-depth articles about it in the Wall Street Journal and New York Times, respectively: a) Metaverse Real Estate Piles Up Record Sales in Sandbox and Other Virtual Realms. Excerpt: The latest hot real estate market isn't on the scenic coasts or in balmy Sunbelt cities. It's in the metaverse, where gamers are flocking, and digital property sales are setting new records. A growing number of investment firms are acquiring digital land in worlds such as the Sandbox and Decentraland, where players simulate real-life pursuits, from shopping to attending a concert. They are betting that individuals and companies will spend money to use virtual homes and retail space and that the value of properties will increase as more people join the worlds. b) Investors Snap Up Metaverse Real Estate in a Virtual Land Boom. Excerpt: Investors were watching, too. Preparing for a digital land boom that appears just months away, they are snapping up concert venues, shopping malls, and other properties in the metaverse. Interest in this digital universe skyrocketed last month when Mark Zuckerberg announced that Facebook would be known as Meta, an effort to capitalize on the digital frontier. The global market for goods and services in the metaverse will soon be worth $1 trillion, according to the digital currency investor Grayscale. My knee-jerk, old-school-value-guy reaction is that this is an obvious and ridiculous bubble, but I've been humbled too many times to have any conviction in that judgment. So I'm just going to defer to my colleagues Enrique Abeyta and Gabe Marshank, who have already done a deep dive into the metaverse. In fact, they recommended one of the leading companies in the space, Roblox Corp (NYSE:RBLX), to their Empire Elite Growth subscribers in September, and it's already up 38%. (Click here for a free trial to Empire Elite Growth.) Scott Galloway On Inflation 3) Run, don't walk, to read NYU professor Scott Galloway's latest column, Inflated. It's the essay of the year, I think. It should be required reading for everyone interested in our higher education system, starting with college administrators. Excerpts: In 1980 a gallon of gasoline cost $1.19. Today it's $3.41, a 2.7% annual increase. But undergraduate tuition has risen nearly 3 times as fast: 6.7% a year at public colleges, for an increase of nearly 1,400%. The greatest assault on middle-class America's prosperity may be the relentless, four-decade-long inflation in higher education. Student loan debt ($1.7 trillion) is now greater than credit card debt. And that doesn't account for the busted 401(k)s, second mortgages, and general financial oppression [that] me and my colleagues have levied on lower- and middle-income households. The number of Americans who have more than $100,000 in student debt is greater than the population of Utah. This sustained inflation has been devastating for lower- and middle-income households. Higher education's ability to soak America is a function of limiting the supply of freshman seats at our best universities in concert with the continued fetishization of their brands. We can scale Salesforce (NYSE:CRM), Facebook (NASDAQ:AAPL), and Google (NASDAQ:GOOGL) by 25% to 60% per annum, but we can't seem to bust above 1% per year at our great public universities. The top 200 schools in America educate only 10% of college attendees. And these universities raise prices in perfect lockstep, miraculously, resulting in millions of kids who get arbitraged to mediocre universities but pay an elite price. It's a cartel enforced by the accreditation organizations, institutions who are as corrupt as the NCAA... minus the charm. Acceptance rates have plummeted, turning senior spring from a time of optimism and opportunity to one of anguish and sacrifice. Kids are still getting into college (total enrollment has kept pace with the growth in graduating seniors), but more and more are shuffled down to lower-tier schools that charge a top-tier price for a credential worth far less. College deans boast about low admissions rates. But if you accept five of every 100 applications, that's not a 5% admission rate. It's a 95% rejection rate. This is un-American. Rejectionism is cloaked in progressive policies. It's true that the student body at these institutions is more diverse than it was 40 years ago. And that's great. But it's not an excuse for maintaining a rejectionist posture. The mission is to expand opportunity, not reallocate elites. Bigotry is prejudice against a person or people on the basis of their membership in a particular group. Haven't we in higher education become bigoted against unremarkable kids from lower- and middle-income households? I love his personal story at the end – it was a similar story for my mom, the daughter of a Seattle fireman, who graduated from the University of Washington in 1962: The best things in my life – kids who made the head's list this semester, a supportive mate, and financial security that (generally) enables me to do whatever I want, whenever I want – are a function of one thing: 74. Specifically, in the 80s, UCLA had an acceptance rate of 74%. I (no joke) had to apply twice. I was the first person on either side of my family to graduate from high school, much less get to attend amazing institutions for undergraduate and graduate degrees. The cost? $7,000 (total) in tuition for a BA and an MBA. In addition, I was presented this opportunity as a function of being good, not great... much less remarkable. Higher ed catalyzed an upward spiral of prosperity for me and my family that's been good for the commonwealth – we love America and are good citizens. Today the acceptance rate at UCLA is 12%. Since I graduated, the number of graduating high school seniors in California has grown nearly twice as fast as the number of undergraduate seats at UCLA. To its credit, the UC system has announced plans to add 20,000 more seats to the system by 2030. At night, alone with the dogs, I hear voices. (No shit.) Not strange voices like the dogs telling me to head to Kroger's in my underwear. But the voices of millions of kids who have one question: "Boss, you got yours, where is mine? When do I get my shot?" America is not about making the children of rich people and the remarkable billionaires but giving everyone a shot at being a millionaire and/or making a contribution. American higher ed has become un-American. We need to fall back in love with the unremarkables and return to America. Best regards, Whitney P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com. Updated on Dec 3, 2021, 3:13 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalk1 hr. 45 min. ago

Labor Shortages And Inflation Are Affecting Everyone – But In Different Ways Than You May Think

It’s no secret that jobs have been hard to fill and that an employee shortage is having a significant impact on the economy. Additionally, the COVID-19 pandemic has disrupted public health and created economic disorder on a global scale. Because of this, businesses worldwide are experiencing supply chain disruptions and labor shortages, while consumers are […] It’s no secret that jobs have been hard to fill and that an employee shortage is having a significant impact on the economy. Additionally, the COVID-19 pandemic has disrupted public health and created economic disorder on a global scale. Because of this, businesses worldwide are experiencing supply chain disruptions and labor shortages, while consumers are dealing with the aftermath of inflation. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more There are 8.6 million potential employable workers and 10 million job openings in the U.S. today, reflecting the strong decrease in workforce participation that contributes to the ongoing supply chain disruptions impacting many industries, including suppliers, distributors, and consumers, with the most significant impact on consumers and the economic growth. For example, American Airlines canceled more than 460 flights earlier in November due to staffing shortages that led to travel disruptions for tens of thousands of people. Unfortunately, the labor shortages and supply chain issues also impact inflation and will only worsen before it gets better. These labor shortages and supply chain disruptions have created a destructive cyclical effect. Fewer employees result in fewer goods produced. As fewer goods are available with higher demand, prices rise, which has caused inflation to hit a 31-year high with no signs of abating anytime soon. While it's easy to think that these realities impact everyone similarly, some companies persevere through these times, and consumers notice. At the same time, many other companies struggle to adapt, and the volume of social and media activity around these issues demonstrates consumer frustrations. So, which companies are performing well, and which aren't? And how can you quantify the difference? Using AI And NLP To Analyze Data And Calculate Sentiment Using artificial intelligence (AI) and natural language processing (NLP), financial services firms can quickly pull data from several sources, like news, social media reports, financial reports, and third-party data providers. AI and NLP can analyze the information gathered from these sources and rank the sentiment of the data with either a negative, neutral or positive sentiment score. At Accern, we’ve created a no-code AI platform that allows financial organizations to extract sentiment and insights from textual data for better risk and investment decisions. We recently analyzed the impact of labor shortages and inflation on companies and consumers. After gathering data on the companies most impacted, we analyzed the human emotion behind the news and issued a sentiment score for each piece of information pulled. Insights On Labor Shortages There are a few companies experiencing outsized negative sentiment among consumers, including Yum! Brands, Spirit Airlines, American Airlines, Ulta Beauty, Foot Locker, and Delta Airlines, to name a few. The most significant issues impacting these companies include airline labor shortages, food shortages, truck driver shortages, and supply chain disruptions. Additionally, restaurant employees and drivers are speaking out against low wages and harsh working conditions. To put things in perspective, roughly half of the news activity around these companies embodies a negative sentiment. Considering the lack of truck drivers, more drivers are voicing negative points of view around uncomfortable working conditions and resigning as shown in the snippets pulled from the dashboard above. The shortage of drivers has created a rift within the global economy and exacerbated the supply chain crisis as stores do not receive their goods in time to fill the empty shelves and meet shoppers' demands. Especially with holiday shopping, panicked consumers are experiencing the impact of the supply chain disruption and labor shortages. Stores like Ulta and Foot Locker, which have not fully adapted to the supply chain problems, are not only reporting lower earnings but are dealing with negative sentiment from the media, investors, and consumers. Although Ulta and Foot Locker expected higher growth once physical stores reopened, investors were disappointed to see the earnings for each store drop. As consumers have stuck to the pandemic habits of online shopping, they now look for convenience and digital experiences more than ever. Although Ulta and Foot Locker are doing their best to ensure that these digital experiences are available to consumers as fast as possible, there is still a long way to go. Conversely, companies like Anheuser Busch, Pepsi, Coca-Cola, and JetBlue are seeing outsized positive attention despite the same labor shortages and supply chain disruption trends. The difference lies in increasing employee benefits and providing better digital experiences to consumers, leading to higher earnings reports. For example, PepsiCo’s response to the supply chain crisis was to digitize the supply chain and invest in technological innovation at scale to ensure that consumers all across the globe receive their products. Pepsi's response has generated positive sentiment from the news and consumers around the world. Consumers are happiest when brands meet their demands, act ethically, and innovate their services and products. Innovation is critical in keeping consumers interested in products as it shows that companies are adapting to new technologies to meet their consumers' needs. Insights On Inflation The supply chain and labor shortage crises are driving inflation. In the most recent CPI report, inflation came in at 6.2 percent, marking the highest increase in over 30 years. But companies that have navigated well around supply chain disruptions and labor shortages have also proven their ability to minimize the impact of inflation. Our recent analysis shows that companies like Discover, Peloton, Nike, and Capital One are receiving negative sentiment from consumers, while JB Hunt, American Express, Starbucks, and Costco are not drawing the ire of their customers. Nike is one company that has used digital acceleration to adapt during the pandemic and saw consumer demand rise as profits rose 16 percent in the last year. Despite its revenue growth, supply chain issues also inflate cotton prices and disrupt the flow of products to stores. As a result, Nike announced that it anticipates increasing prices in the second half of 2022 to offset supply chain-related costs. Contrarily, Costco is navigating higher labor and freight costs, transportation demand, and container shortages. Still, they manage to keep their prices low and membership fees the same while meeting the needs of consumers. Additionally, Costco acquired a logistic network to enable the company to deliver large items within days instead of weeks and has gone digital with e-commerce platforms like Instacart. These AI-generated insights demonstrate how certain companies are effectively navigating the most prominent issues affecting our economy today. Accern's AI and NLP analysis reveals that companies proactively innovating their products and services can meet consumers' demands without significantly cutting employee salaries or raising costs. These companies are the ones that are also driving positive sentiment from the media and consumers. With the amount of structured and unstructured data available today, AI and NLP are crucial in understanding the relative health of companies and how different players in the economy are handling challenges – and staying afloat. Article By Kumesh Aroomoogan, co-founder and CEO, Accern About Kumesh Aroomoogan Kumesh Aroomoogan is the co-founder and CEO of Accern, a New York-based, venture-backed AI startup. Founded in 2014, Accern accelerates AI workflows for financial enterprises with a no-code development platform and has raised $16m to date. In 2018 Kumesh was named to the Forbes 30 Under 30 Enterprise Technology list. Previously, he was the co-founder and CEO of BrandingScholars, an advertising agency, a General Accountant at the Ford Foundation, an Executive Board Member, Chairman of Public Relations at ALPFA, Equity Researcher at Citigroup, and a Financial Analyst at SIFMA. Updated on Dec 3, 2021, 3:34 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalk1 hr. 45 min. ago

Why is Singapore Building Up its Gold Reserve For First Time in Over 20 Years?

Recently, the World Gold Council conducted a survey where it found that financial institutions, both private and public, are losing faith in the U.S. dollar. As a result, central banks are dropping dollars for gold. For example, Singapore increased its gold reserves by 20% earlier this year. By the second quarter of 2021, Singapore had […] Recently, the World Gold Council conducted a survey where it found that financial institutions, both private and public, are losing faith in the U.S. dollar. As a result, central banks are dropping dollars for gold. For example, Singapore increased its gold reserves by 20% earlier this year. By the second quarter of 2021, Singapore had added an additional 26.3 tons of gold. This is the first time Singapore has expanded its gold reserves since 2000, and its reserves now hold about 154 tons of the precious metal. The Monetary Authority of Singapore (MAS) believes that investing more in gold will allow the central bank to further diversify its portfolio and remain resilient through financial turmoil. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get Our Icahn eBook! Get our entire 10-part series on Carl Icahn and other famous investors in PDF for free! Save it to your desktop, read it on your tablet or print it! Sign up below. NO SPAM EVER (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Purchase Went Under the Radar The MAS didn’t disclose the amount paid for the bullion, but with current market prices, it is estimated that the central bank invested over $1.5 billion. The transaction was also made under the radar, which is puzzling to economists as to why the central bank waited months to report the gold purchase. Investors believe that the recent gold purchases by MAS will significantly increase the value of Singapore’s currency, which can affect foreign exchange rates. Why are Central Banks Purchasing So Much Gold? We have seen an uptick of countries looking to build up their gold reserves since the start of the COVID-19 pandemic and with inflationary pressures currently persisting, governments are preparing for a financial downturn. Another country joining the fray is Poland, which has reported that it plans on purchasing an additional 100 tons of gold. With inflation increasing at alarming rates, gold provides both stability and financial security in times of financial turmoil. Who Else is Investing in Gold? Aside from large institutional investors, individuals can also hedge against inflation too. Many people are currently purchasing bullion like the Gold American Eagle. Today, investing in gold has become essential for those who want to protect their assets from an economic collapse. Inflation is devaluing the dollar and causing prices to go up significantly. As a result, both individual and institutional investors continue to ditch the dollar for safer assets. Current Spot Prices Friday’s precious metals spot prices were mixed. Gold grew 0.28% to $1780.70 per ounce. Silver fell 0.13% to $22.44 per ounce. Platinum rose 0.11% to $954.90 per ounce, while Palladium increased 1.81% to $1845.00 per ounce. Updated on Dec 3, 2021, 3:49 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalk1 hr. 45 min. ago

Ever Rising Cost Of Living Stressing You Out? Your Investments Could Be The Way Out

We have all felt the effects of the ever-rising cost of living. Without wise financial strategies, you are likely to get financially frustrated and fall deeper into debt. One thing is sure; your financial situation is not going to improve unless you make an effort to enhance your financial practices. One of the best financial […] We have all felt the effects of the ever-rising cost of living. Without wise financial strategies, you are likely to get financially frustrated and fall deeper into debt. One thing is sure; your financial situation is not going to improve unless you make an effort to enhance your financial practices. One of the best financial decisions you can make is to start investing your money. Investing your money is the best way to grow your money into substantial wealth and keep up with the high inflation rates. Here are a few ways you can invest wisely and grow your wealth. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Plan and Set Financial Goals Investing is a long-term game. You cannot plan for your financial future if you do not know your financial goals. Your financial goals should be reasonable and measurable. Dividing your goals into long-term and short-term goals increases your chances of achieving them. Your long-term and short-term goals will guide your future investment strategies and choices. Analyze Your Options Once you have your financial goals, set it to take a look around and analyze your investment options. The best way to realize your investment options is to go through cryptocurrency news and analysis. It is essential to ensure that you are comfortable with your investment budget not to overcommit and strain your finances. Play the Stock Market Day trading is not an easy task. It requires hours of studying and determination to get up to speed with the forces at play. Then you need to apply yourself to the difficult job of making losses and recovering in the same breath. Playing the stock market is a risky affair that has the potential to make you good money in a short amount of time. There are several ways of reducing the risk, including hedging your bets. Always ensure that you set a stop-loss limit to protect yourself from significant losses that could cripple your finances. Invest in a Money-Making Course Investing in yourself by educating yourself is one of the best investments you will ever make. This investment may not feature a specific return on investment, but you will reap the benefits long after you have completed your money-making course. The best part is that you can pass this knowledge onto your children, friends, and family. Learn, adapt and grow your wealth. Reduce Risk Newcomers to the world of investment are advised to keep the risk at a minimum. Slow and steady wins the race rings loud and true when it comes to investing. Take your time to understand the process and experience different investment options before taking on high-risk, high-return investments. Think twice before you throw caution to the wind by taking on massive risk. Conclusion Investing is most times a long-term game. The best way to get ahead is to start early and trade carefully. Once you have a firm grasp on the inner workings of investment and investment strategies, you can work on increasing your risk tolerance, consequently increasing your income. It is never too late to start your investment journey; you can start today and watch your wealth grow beyond measure. Always remember that without grit, determination, tenacity, and sacrifice, your investment goals will probably never be realized. This post first appeared on The Stonk Market Updated on Dec 3, 2021, 4:53 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalk1 hr. 45 min. ago

Inflation Vs. Deflation – Which Is The Bigger Threat In 2022?

Inflation Vs. Deflation – Which Is The Bigger Threat In 2022? Authored by Lance Roberts via RealInvestmentAdvice.com, Inflation vs. deflation – while headlines get filled with “inflation” concerns, historical data shows “deflation” remains a threat. The Financial Times recently had a great piece on Central Bankers and their stance that inflationary pressures remain transient. However, asFT concluded: “For the first time in many decades, there is the possibility that a significant turning point has arrived, that price rises will be more than a flash in the pan and something more difficult to control.” It is interesting to hear statements such as the above because inflation has been rising steadily since 1974. The chart below shows the long-term history of inflation going back to 1774. What the chart shows is that in 1954 the trajectory of inflation changed. However, the annual rate of change indicates the long-term deflationary trend. Notably, before 1920 the economy was primarily agriculturally based with a dramatically smaller population. Such gave rise to more variability in economic growth. However, the shift to manufacturing and industrialization minimized the big deflationary swings before WWII. Unfortunately, beginning in 1980, the economy made a shift to financialization and services. While service jobs have a low multiplier effect economically, economic financialization led to a debt explosion. As a result, the combination of debt and lower economic output remains a consistent deflationary pressure. The Inflation vs. Deflation Conundrum Currently, the mainstream consensus has latched on the sharp increase in the money supply because a permanent shift to higher inflation is coming. Such was a point we discussed in “Is Hyperinflation A Threat?” “The measure of money in the system, known as M2, is skyrocketing, which certainly supports that concern. Now, with the Biden administration adding another $1.9 trillion into the economy, those concerns have risen.” Furthermore, in a previous Bloomberg interview, Larry Summers stated: “There is a chance that macroeconomic stimulus on a scale closer to World War II levels will set off inflationary pressures of a kind not seen in a generation. I worry that containing an inflationary outbreak without triggering a recession could be even more difficult now than in the past.” The chart below suggests those points are correct. Given it takes about 9-months for increases in money supply to hit the economy, we see the inflationary spike. The sharp decline in money supply suggests deflationary impulses in the economy will become visible around the middle of 2022. Which is roughly when the Federal Reserve plans to hike interest rates. This is significant in the debate of inflation vs. deflation. However, there are still significant headwinds to inflation over the next decade outside of money supply changes. The 3-D’s Here are the 3-D’s of inflation vs. deflation. Over the coming decades, three primary factors are supporting deflationary pressures. Debt Demographics  Deflation These issues are not new. But have been plaguing economic growth for the last 40-years. Given the baby-boomer generation has reached retirement age, they will leave the workforce at an increasing rate, drawing on their accumulated financial assets. As a result, the debts and deficits rose to levels that detracted from economic growth rather than contributed to it. As shown, the surge in debt and deficits coincides with a peak in the 10-year average economic growth rate. The decline in economic prosperity keeps a deflationary pressure on the economy as the government expands its deficit spending to sustain the demands on the welfare system. The negative impact on the economy is clear. There is a significant negative correlation between the size of the government and economic growth. Rather, debt is the problem, not the solution. “Excessive indebtedness acts as a tax on future growth and it is also consistent with Hyman Minsky’s concept of “Ponzi finance,” which is that the size and type of debt being added cannot generate a cash flow to repay principal and interest. While the debt has not resulted in the sustained instability in financial markets envisioned by Minsky, the slow reduction in economic growth and the standard of living is more insidious.” – Dr. Lacy Hunt The most direct evidence of the decline of economic prosperity is the rise in social welfare as a percentage of disposable incomes. Recycling tax dollars is a zero-sum game and increases the deflationary pressures on the economy from debt required to fund it. Debt-Driven Deflation Will Cap Inflation Furthermore, a recent report from the Mercatus Center at George Mason University studied the effective “multiplier” of government spending. “The evidence suggests government purchases reduces the size of the private sector and increases the size of the government sector. On net, incomes grow, but privately produced incomes shrink. There are no realistic scenarios where the short-term benefit of stimulus is so large that government spending pays for itself. In fact, even when government spending crowds in some private-sector activity, the positive impact is small. It is likely much smaller than economic textbooks suggest.”  With households dependent on governmental assistance, the deflationary “psychology” is difficult to break. “In addition to the psychological drivers, there are structural underpinnings of deflation as well. A financial system’s ability to sustain increasing levels of credit rests upon a vibrant economy. A high-debt situation becomes unsustainable when the rate of economic growth falls beneath the prevailing rate of interest owed. As such the slowing economy reduces borrowers’ ability to pay what they owe. In turn, creditors may refuse to underwrite interest payments on the existing debt by extending even more credit. When the burden becomes too great for the economy to support, defaults rise. Moreover, fear of defaults prompts creditors to reduce lending even further.” Consider the role of wages in the inflation vs. deflation question. When wages fail to keep up with inflation, consumption will contract, contributing to the deflationary bias. For the last four decades, when the Fed took action to achieve their goal of “full employment and stable prices,” it led to an economic slowdown, or worse. The relevance of debt versus economic growth is all too evident, requiring an ever-increasing amount of debt to generate $1 of economic growth. In other words, without debt, there is little to no, organic economic growth. Don’t Forget The Demographics The most considerable deflationary pressure will come from the changing demographics. As baby boomers retire and leave the productive workforce, they will cut back on spending and withdraw assets from the financial markets. Most Central Banks are increasingly convinced high inflation rates might not be so transient after all. Such is why the tightening cycle has now begun. Secular demographics will reach maximum deflationary pressures in the decade ahead. Such is in stark contrast to the 1970s when demographic trends underpinned the then inflationary surge. But amid the current inflation panic, Eric Basmajian of @EPBResearch reminds us that the demographic headwinds facing the major economies are intensifying (especially with people dropping out of the workforce). In the long-term, demographics will be a big shock to Central Banks hopes of higher inflation rates.” – Albert Edwards “Demography is destiny.” – Auguste Comte The Fed’s Liquidity Trap Is Deflationary “When injections of cash into the private banking system by a central bank fail to lower interest rates or stimulate economic growth. A liquidity trap occurs when people hoard cash because they expect an adverse event such as deflation, insufficient aggregate demand, or war. Signature characteristics of a liquidity trap are short-term interest rates remain near zero. Furthermore, fluctuations in the monetary base fail to translate into fluctuations in general price levels.” Pay particular attention to the last sentence. Every aspect of a liquidity-trap is in place: Lower interest rates fail to stimulate economic growth People hoard cash because they expect an adverse event. Short-term interest rates near zero. Fluctuations in the monetary base fail to translate into general price levels. Notably, the issue of monetary velocity and saving rates is critical to defining a “liquidity trap.” While many today continue to compare the economic environment to the 1970’s inflationary spike, the impact of demographics and debt are vastly different. The issue of inflation vs. deflation is likely to continue next year. Will the economy experience a short-term inflationary spike as the stimulus runs through the system? Of course. However, once the“Sugar Rush” wears off, the deflationary pressures will quickly reassert themselves. The problem for the Fed is they may well make another policy mistake as they hike interest rates at precisely the wrong time. The 3-D’s continue to suggest that inflation will give way to deflation, economic strength will weaken, and over-zealous investors will once again get left holding the bag. Tyler Durden Sat, 12/04/2021 - 10:30.....»»

Category: smallbizSource: nyt3 hr. 29 min. ago

5 Momentum Picks for December Amid Virus and Fed Uncertainty

We have narrowed our search to five large-cap momentum stocks that have strong upside left for the rest of 2021. These are WLK, DVN, CVX, CBRE and EXPD. U.S. stock markets along with the global bourses, have been suffering from extreme volatility since Black Friday. As we are in the last month of 2021, market participants have started anticipating how Wall Street will behave this December. Historically December is the best-performing month for Wall Street, although it has a history of negative ending.At this stage, it will be fruitful to invest in stocks with a favorable Zacks Rank that have showed strong momentum over the past month defying volatility. We have selected five such stocks. These are — Chevron Corp. CVX, Expeditors International of Washington Inc. EXPD, Westlake Chemical Corp. WLK, Devon Energy Corp. DVN and CBRE Group Inc. CBRE.December – Historically Favorable to Wall StreetU.S. stock markets have provided impressive returns so far in 2021. Barring September’s market turmoil, major indexes have done extremely well. In November, the Dow and S&P 500 tumbled, but that was due to severe volatility in the last three trading sessions of last month. The resurgence of a new variant of coronavirus  — Omicron — and the Fed’s likely shift to a relative hawkish monetary stance have unnerved investors.However, the fundamentals of the U.S. economy remain robust.  This is evident from the recently released economic data of November. CNBC reported citing a Bank of America finding that in December — the market’s benchmark the S&P 500 Index — has risen 2.3% on average since 1936 and ended on a positive note 79% of the time. Year to date, the Dow, the S&P 500 and the Nasdaq Composite — have rallied 13.2%, 21.9% and 19.3%, respectively.Near-Term PositivesAs of now, we have very little data available on the Omicron. Globally doctors and medical scientists are divided in opinion regarding the new variant of coronavirus. Upon analyzing the little data available, analyzing doctors think that Omicron is more transmissible but less severe than the earlier variants. Patients detected with Omicron have so far shown mild effect of coronavirus.On Nov 30, in his testimony before a Senate committee, Fed Chairman Jerome Powell said that the central bank will discuss speeding up the tapering process of its monthly bond-buy program in the upcoming FOMS meeting scheduled from Dec 14-15. Current inflation is no longer transitory to Fed.Powell said “At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner.”This means that the Fed strongly believes that the fundamentals of the U.S. economy are robust. Both consumer spending and business spending remain strong despite mounting inflation and supply-chain disruptions. Manufacturing and services PMIs have stayed elevated. The struggling labor market is showing a systematic recovery.Moreover, in its latest projection on Dec 1, the Atlanta Fed reported that the U.S. economy would grow by 9.7% in fourth-quarter 2021. U.S. GDP grew 6.4%, 6.7% and 2.1%, in the first, second and third quarters of this year, respectively.Total third-quarter earnings of the market's benchmark — the S&P 500 Index — jumped 40.3% from the same period last year on 17.3% higher revenues. Moreover, in fourth-quarter 2021, total earnings of the S&P 500 Index are expected to increase 19.1% year over year on 11.2% higher revenues.Our Top PicksWe have narrowed our search to five large-cap (market capital > $10 billion) momentum stocks that have strong upside left for the rest of 2021. These stocks have seen positive earnings estimate revisions within the last 30 days.  Each of our picks carries a Zacks Rank #1 (Strong Buy) and has a Momentum Score of A.  You can see the complete list of today’s Zacks #1 Rank stocks here.The chart below shows the price performance of our five picks in the past month.Image Source: Zacks Investment ResearchChevron Corp. is one of the best-placed global integrated oil firms to achieve a sustainable production ramp-up. CVX’s existing project pipeline is one of the best in the industry, thanks to its premier position in the lucrative Permian Basin.Chevron’s Noble Energy takeover has expanded its footprint in the region and the DJ Basin. CVX now has access to Noble Energy’s low-cost, proven reserves along with cash-generating offshore assets in Israel — particularly the flagship Leviathan natural gas project — thereby boosting its footing in the Mediterranean.Chevron has an expected earnings growth rate of more than 100% for the current-year. The Zacks Consensus Estimate for current-year earnings improved 2.5% over the last 30 days.Expeditors International of Washington Inc. is engaged in the business of global logistics management, including international freight forwarding and consolidation, for both air and ocean freight in the Americas, North Asia, South Asia, Europe, the Middle East, Africa, and India.Expeditors is optimistic about the buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with EXPD's focus on Digital Solutions. Amid the coronavirus crisis, the acquisition is expected to expand business and get further investments that are expected to drive the top line in the upcoming quarters.EXPD has an expected earnings growth rate of 80.8% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 9.7% over the last 30 days.Devon Energy Corp. aims for strong oil production from the Delaware Basin holdings. Devon Energy’s presence in Delaware has expanded due to its all-stock merger deal with WPX Energy. DVN is using new technology in production process to lower expenses.Devon Energy’s divestiture of Canadian and Barnett Shale gas assets will allow it to focus on its five high-quality oil-rich U.S. basins assets. DVN’s stable free cash flow generation allows it to pay dividend and buy back shares. Devon Energy has ample liquidity to meet near-term debt obligations.Devon Energy has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 5.4% over the last 30 days.CBRE Group Inc. operates as a commercial real estate services and investment company worldwide. CBRE’s performance in the recent quarters reflects the benefits from diversifying across asset type, business lines, client type and geography, plus the expansion of its resilient business in recent years.CBRFE Group is well poised to continue on its growth path in the upcoming days on the back of its wide real estate products and services offerings, healthy outsourcing business, strategic buyouts, technology investments and solid balance-sheet strength.CBRE has an expected earnings growth rate of 62.1% for the current year. The Zacks Consensus Estimate for its current-year earnings improved 1.9% over the last 30 days.Westlake Chemical is benefiting from synergies from the Axiall acquisition. The buyout has diversified its product portfolio and geographical operations. The NAKAN acquisition has also allowed Westlake Chemical to boost its compounding business globally. Further, Westlake Chemical sees favorable demand trends for polyethylene and polyvinyl chloride resin.Strong demand in the polyethylene business is likely to continue, especially in food packaging. Also, rising housing starts in the United States augur well for WLK’s downstream vinyl products business and domestic demand for PVC. Westlake Chemical should also benefit from its capacity expansion projects.Westlake Chemical has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 11.6% over the last 30 days. Zacks' Top Picks to Cash in on Artificial Intelligence In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.See 3 Artificial Intelligence Stocks With Extreme Upside Potential>>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Devon Energy Corporation (DVN): Free Stock Analysis Report Chevron Corporation (CVX): Free Stock Analysis Report Westlake Chemical Corporation (WLK): Free Stock Analysis Report Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report CBRE Group, Inc. (CBRE): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 3rd, 2021

Futures Flat Ahead Of Taper Accelerating Payrolls

Futures Flat Ahead Of Taper Accelerating Payrolls U.S. equity futures are flat, rebounding from an overnight slide following news that 5 "mild" Omicron cases were found in New York, and European stocks wavered at the end of a volatile week as traders waited for the latest jobs data to assess the likely pace of Federal Reserve tightening and accelerated tapering. Emini S&P futures traded in a narrow range, and were up 2 points or 0.04%, Nasdaq futures were flat,while Dow Jones futures were up 8 points. The dollar edged higher, along with the euro after ECB President Christine Lagarde said inflation will decline in 2022. Crude advanced after OPEC+ left the door open to changing the plan to raise output at short notice. S&P 500 and Nasdaq 100 contracts fluctuated after dip-buyers Thursday fueled the S&P 500’s best climb since mid-October, a sign that some of the worst fears about the omicron virus strain are dissipating. That said, concerns about omicron are overshadowing economic news for now with “a lot of noise and very little meaningful information,” said Geir Lode, head of global equities at Federated Hermes in London. “The prospect of a faster monetary policy tightening could -- and should probably -- lead to a clear market reaction,” he said. “It is also another argument for why we assume value stocks outperform growth stocks. At the moment, however, investors’ attention is elsewhere.” In the latest U.S. data, jobless claims remained low, suggesting additional progress in the labor market. Traders are awaiting today's big event - the November payrolls numbers, which could shape expectations for the pace of Fed policy tightening (full preview here). Bloomberg Economics expects a strong report, while the median estimate in a Bloomberg survey of economists predicts an increase of 550,000. “Assuming the omicron news remains less end-of-the-world, a print above 550,000 jobs should see the faster Fed-taper trade reassert itself,” Jeffrey Halley, a senior market analyst at Oanda, wrote in a note. “That may nip the equity rally in the bud, while the dollar and U.S. yields could resume rising.” In premarket trading, Didi Global Inc. jumped more than 14% in U.S. premarket trading before reversing all gains, after the Chinese ride-hailing giant said it began preparations to withdraw from U.S. stock exchanges. U.S. antitrust officials sued to block chipmaker Nvidia’s proposed $40 billion takeover of Arm, saying the deal would hobble innovation and competition. Elon Musk’s offloading of Tesla Inc. shares surpassed the $10 billion mark as he sold stock in the electric-car maker for the fourth consecutive week. Here are some of the other biggest U.S. movers today: DocuSign (DOCU US) plunges 32% in premarket trading as the e-signature company’s quarterly revenue forecast missed analysts’ estimates. JPMorgan and Piper Sandler cut ratings. Marvell Technology (MRVL US) shares rise 18% in premarket after the semiconductor company’s fourth-quarter forecast beat analyst estimates; Morgan Stanley notes “an exceptional quarter” with surprising outperformance from enterprise networking, strength in 5G and in cloud. Asana (ASAN US) shares slump 14% in premarket trading after results, with KeyBanc cutting the software firm’s price target on a reset in the stock’s valuation. Piper Sandler said that slight deceleration in revenue and billings growth could disappoint some investors. Zillow Group (ZG US) shares rise 8.8% in premarket after the online real-estate company announced a $750 million share repurchase program and said it has made “significant progress” on Zillow Offers inventory wind- down. Stitch Fix (SFIX US) jumped in premarket after Morgan Stanley raised its rating to equal-weight from underweight. Smartsheet (SMAR US) rose in postmarket trading after the software company boosted its revenue forecast for the full year; the guidance beat the average analyst estimate. National Beverage Corp. (FIZZ US) gained in postmarket trading after the drinks company announced a special dividend of $3 a share. Ollie’s Bargain (OLLI US) plunged 21% in U.S. premarket trading on Friday, after the company’s quarterly results and forecast disappointed, hurt by supply-chain troubles. Smith & Wesson Brands (SWBI US) stock fell 15% in postmarket trading after adjusted earnings per share for the second quarter missed the average analyst estimate. In Europe, the Stoxx Europe 600 Index slipped as much as 0.2% before turning green with mining companies and carmakers underperforming and energy and utility stocks rising. Swedish Orphan Biovitrum AB fell as much as 26% after private-equity firm Advent International and Singapore wealth fund GIC abandoned their $7.6 billion bid to buy the drugmaker. Volatility across assets remains elevated, reflecting the Fed’s shift toward tighter monetary settings and uncertainty about how the omicron outbreak will affect global reopening. The hope is that vaccines will remain effective or can be adjusted to cope. New York state identified at least five cases of omicron, which is continuing its worldwide spread, while the latest research shows the risk of reinfection with the new variant is three times higher than for others. “The environment in markets is changing,” Steven Wieting, chief investment strategist at Citigroup Private Bank, said on Bloomberg Television. “Monetary policy, fiscal policy are all losing steam. It doesn’t mean a down market. But it’s not going to be like the rebound, the sharp recovery that we had for almost every asset in the past year.” Earlier in the session, Asian stocks held gains from the past two days as travel and consumer shares rallied after their U.S. peers rebounded and a report said Merck & Co. is seeking to obtain approval of its Covid-19 pill in Japan. The MSCI Asia Pacific Index was little changed after climbing as much as 0.3%, with Japan among the region’s best performers. South Korea’s benchmark had its biggest three-day advance since February, boosted by financial shares. Still, Asian stocks headed for a weekly loss as U.S. regulators moved a step closer to boot Chinese firms off American stock exchanges. The Hang Seng Tech Index slid as much as 2.7% to a new all time low, as Tencent Holdings and Alibaba Group Holding fell after Didi Global Inc. began preparations to withdraw its U.S. listing.  “While the risks of delisting have already been brought up previously, a step closer towards a final mandate seems to serve as a reminder for the regulatory risks in Chinese stocks,” said Jun Rong Yeap, a market strategist at IG Asia Pte. Asian stocks remain stuck near a one-year low, as the delisting issue damped sentiment already hurt by omicron and the Fed’s hawkish pivot. A U.S. payrolls report later today could give further clues on the pace of tightening Japanese equities rose, paring their weekly loss, helped by gains in economically sensitive names. Electronics makers reversed an early loss to become the biggest boost to the Topix, which gained 1.6%. Automakers and banks also gained, while reopening plays tracked a rebound in U.S. peers. Daikin and Recruit were the largest contributors to a 1% gain in the Nikkei 225, which erased a morning decline of as much as 0.6%. The Topix still dropped 1.4% on the week, extending the previous week’s 2.9% slide, amid concerns over the omicron coronavirus variant. Despite some profit-taking in tech stocks in the morning session, “the medium and long-term outlooks for these names continue to be really good,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “The spread of the omicron variant doesn’t mean an across-the-board selloff for Japanese stocks.” India’s benchmark equity index recorded a weekly advance, partly recovering from a sharp sell-off triggered by uncertainty around the new Covid variant, with investors focusing on the central bank’s monetary policy meeting from Monday.  The S&P BSE Sensex fell 1.3% to 57,696.46, but gained 1% for the week after declining for two weeks. The NSE Nifty 50 Index dropped 1.2%, the biggest one-day decline since Nov. 26. All but three of the 19 sector sub-indexes compiled by BSE Ltd. fell, led by a gauge of energy companies. “The focus seems to be shifting from premium Indian equities to relatively cheaper markets,” Shrikant Chouhan, head of retail equity search at Kotak Securities said in a note. The cautious mood in India was heightened by the “unenthusiastic” response to the IPO of Paytm, which was also the biggest public share sale in the country, and a resurgence of Covid concerns across Europe, he added.  Investors also focused on the country’s economic outlook, which is showing signs of improvement. Major data releases this week -- from economic expansion to tax collection -- showed robust growth. “Strong domestic indicators are playing a key role in driving the market amid negative global cues,” said Mohit Nigam, a fund manager with Hem Securities. But any further spread of the omicron strain in India may cap local equity gains, he said. Two cases of the new variant have been detected so far in the country. The market’s attention will shift to the Reserve Bank of India’s policy announcement on Dec. 8, after a three-day meeting from Monday. The panel is expected to leave record low interest rates unchanged as inflation remains within its target range. The economy faces new risks from the omicron variant after expanding 8.4% in the three months through September. Reliance Industries contributed the most to the Sensex’s decline, falling 3%. Out of 30 shares in the index, 26 fell and 4 gained. Australia stocks posted a fourth week of losses amid the Omicron threat even as the S&P/ASX 200 index rose 0.2% to close at 7,241.20, boosted by banks and miners. That trimmed the benchmark’s loss for the week to 0.5%, its fourth-straight weekly decline.  Corporate Travel was among the top performers, rising for a second session. TPG Telecom led the laggards, tumbling after media reports that founder David Teoh entered into an agreement to sell about 53.1 million shares in a block trade.  In New Zealand, the S&P/NZX 50 index was little changed at 12,676.50. In FX, the Bloomberg Dollar Spot Index advanced and the greenback was higher against all of its Group-of-10 peers, with risk-sensitive Scandinavian and Antipodean currencies the worst performers. Turkish lira swings back to gain against the USD after central bank intervention for the 2nd time in 3 days. The pound weakened and gilt yields fell after Bank of England policy maker Michael Saunders urged caution on monetary tightening due to the potential effects of the omicron variant on the economy. The euro fell below $1.13 and some traders are starting to use option plays to express the view that the currency may extend its drop in coming month, yet recover in the latter part of 2022. The Aussie dropped for a fourth day amid concern U.S. payroll data due Friday may add to divergence between RBA and Fed monetary policy. Australia’s sale of 2024 bonds saw yields drop below those in the secondary market by the most on record. The yen weakened for a second day as the prospects for a faster pace of Fed tapering fans speculation of portfolio outflows from Japan. In rates, Treasury yields ticked lower, erasing some of Tuesday jump after Fed officials laid out the case for a faster removal of policy support amid high inflation.  Treasurys followed gilts during European morning, when Bank of England’s Saunders said the omicron variant is a key consideration for the December MPC decision which in turn lowered odds of a December BOE rate hike. Treasury yields are richer by up to 1.5bp across 10-year sector which trades around 1.43%; gilts outperform by ~1bp as BOE rate- hike premium for the December meeting was pared following Saunders comments. Shorter-term Treasury yields inched up, and the 2-year yield touched the highest in a week Friday’s U.S. session features a raft of data headed by the November jobs report due 8:30am ET where the median estimate is 550k while Bloomberg whisper number is 564k; October NFP change was 531k Crude futures extend Asia’s modest gains advanced after OPEC+ proceeded with an output hike but left room for quick adjustments due to a cloudy outlook, making shorting difficult. WTI added on ~2.5% to trade near $68.20, roughly near the middle of the week’s range. Brent recovers near $71.50. Spot gold fades a small push higher to trade near $1,770/oz. Most base metals are well supported with LME aluminum and zinc outperforming.  Looking at the day ahead, and the aforementioned US jobs report for November will be the highlight. Other data releases include the services and composite PMIs for November from around the world, Euro Area retail sales for October, and in addition from the US, there’s October’s factory orders and the November ISM services index. From central banks, we’ll hear from ECB President Lagarde and chief economist Lane, the Fed’s Bullard and the BoE’s Saunders. Market Snapshot S&P 500 futures little changed at 4,574.25 STOXX Europe 600 up 0.2% to 466.43 MXAP little changed at 192.06 MXAPJ down 0.5% to 625.64 Nikkei up 1.0% to 28,029.57 Topix up 1.6% to 1,957.86 Hang Seng Index little changed at 23,766.69 Shanghai Composite up 0.9% to 3,607.43 Sensex down 1.3% to 57,692.90 Australia S&P/ASX 200 up 0.2% to 7,241.17 Kospi up 0.8% to 2,968.33 Brent Futures up 3.3% to $71.97/bbl Gold spot down 0.1% to $1,767.28 U.S. Dollar Index up 0.14% to 96.29 German 10Y yield little changed at -0.37% Euro down 0.1% to $1.1286 Top Overnight News from Bloomberg “I see an inflation profile which looks like a hump” and “we know how painful it is,” ECB President Christine Lagarde says at event Friday. She also said that “when the conditions of our forward guidance are satisfied, we won’t be hesitant to act” and that an interest rate increase in 2022 is very unlikely The betting window is open in the fixed-income market as hedge funds and other traders hunt for mispriced risk heading into 2022 -- whether it’s predictions for accelerating inflation or rising interest rates The U.K. Municipal Bonds Agency aims to sell the first ethical bonds on behalf of local governments early next year. The body, set up to help U.K. councils access capital markets, is looking to issue a couple of sustainable bonds in the first quarter of 2022, according to officials advising on the sales. It expects to follow that with a pooled ethical bond to raise money for a group of different local authorities Low- income countries indebted to Chinese commercial and policy banks could buy specially-created Chinese government bonds and then use these as collateral to support the sale of new yuan debt, Zhou Chengjun, head of the People’s Bank of China’s finance research institute, wrote in an article published in the ChinaBond Magazine Chinese tech shares briefly touched their record lows in Hong Kong, as Didi Global Inc.’s announcement to start U.S. delisting and rising scrutiny on mainland firms traded there dealt a further blow to already soured sentiment The yuan is set to weaken for the first time in three years in 2022, as capital inflows are expected to slow amid a shrinking yield gap between China and the U.S., a Bloomberg survey shows Turkish inflation accelerated for a sixth month in November to the highest level in three years, driven by a slump in the lira that continues to cloud consumer price outlook A more detailed look at global markets courtesy of Newsquawk Asian equities eventually traded mostly higher following the cyclical-led rebound in the US, but with the mood in the region tentative as Omicron uncertainty lingered after further cases of the new variant were reported stateside and with the latest NFP data drawing near. ASX 200 (+0.2%) lacked direction as resilience in cyclicals was offset by underperformance in defensives and amid ongoing COVID-19 concerns which prompted the Western Australian government to widen its state border closure to include South Australia. Nikkei 225 (+1.0%) was initially subdued amid recent currency inflows and with SoftBank among the worst performers amid several negative headlines including the FTC suing to block the Nvidia acquisition of Arm from SoftBank, while the Japanese conglomerate also suffered from its exposure in “super app” Grab which tumbled 20% in its New York debut and with Didi to start delisting from the NYSE in favour of a Hong Kong listing, although the index eventually recovered losses in latter half of trade. Hang Seng (-0.1%) and Shanghai Comp. (+0.9%) were varied with US-listed Chinese companies pressured as the US SEC moved closer to delisting Chinese ADRs for failing to comply with disclosure requirements, while the mood across developers was also glum with Kaisa shares at a record low after its bond exchange offer to avert a default was rejected by bondholders and China Aoyuan Property Group slumped by double-digit percentages following its warning of an inability to repay USD 651.2mln of debt due to a liquidity crunch. Furthermore, participants digested the latest Caixin Services and Composite PMI data which slowed from the prior month, but both remained in expansion territory and with reports that advisors are to recommend lowering China’s economic growth target to 5.0%-5.5% or above 5%, fanning hopes for looser policy. Finally, 10yr JGBs gained and made another incursion above 152.00 with prices supported amid the cautious mood in Japan and with the BoJ also present in the market today for a total of JPY 1.05tln of JGBs heavily concentrated in 1yr-5yr maturities. Top Asian News Astra Said to Sink Advent’s $7.6 Billion Buyout of Biotech Sobi BOJ Is Said to See Omicron as Potential Reason to Keep Covid Aid Kaisa Swap Rejected, Developer Bonds Slide: Evergrande Update Permira Is Said to Near Deal for U.K. Blood Plasma Lab BPL The positivity seen heading into the European open dissipated as the session went underway, with the region seeing more of a mixed configuration in cash markets (Euro Stoxx 50 -0.1%; Stoxx 600 Unch) – with no clear drivers in the run-up to the US jobs report. The release will be carefully watching measures of labour market slack to gauge the progress towards the Fed's 'three tests' for rate hikes, whilst the Fed appears almost certain to announce a quickening in the pace of asset purchase tapering at its December meeting (Full NFP preview available in the Newsquawk Research Suite). The recent downside in Europe also seeps into the US futures, with the RTY (-0.2%), NQ (-0.2%) and ES (-0.3%) posting broad-based losses as things stand. Sectors have shifted from the earlier firm cyclical layout to one of a more defensive nature, with Healthcare, Food & Beverages, and Personal & Household Goods making their way up the ranks. Travel & Leisure still sits in the green but largely owed to sector heavyweight Evolution (+6.3%) as the group is to acquire its own shares in Nasdaq Stockholm. Oil & Gas sits as the current winner as crude markets claw back a bulk of this week's losses. On the flip side, Basic Resources are hit as iron ore tumbled overnight. In terms of individual movers, Dassault Aviation (+8.0%) shares soared after France signed a deal with the UAE worth some EUR 17bln. Allianz (+1.0%) stays in the green after entering a reinsurance agreement with Resolution Life and affiliates of Sixth Street for its US fixed index annuity portfolio, with the transaction to unlock USD 4.1bln in value. Top European News U.K. Nov. Composite PMI 57.6 vs Flash Reading 57.7 The Chance of a BOE Rate Hike This Month Has Fallen: BofA’s Wood AP Moller Holding Agrees to Buy Diagnostics Company Unilabs Permira Is Said to Near Deal for U.K. Blood Plasma Lab BPL In FX, it’s debatable whether this month’s US jobs data will carry as much weight as normal given that Fed rhetoric in the run up to the pre-FOMC blackout period has effectively signalled a faster pace of tapering and the likelihood of more hawkishly aligned dot plots. However, the latest BLS report could be influential in terms of shaping the tightening path once QE has been withdrawn, as markets continue to monitor unfolding COVID-19 developments with the main focus on vaccine efficacy against the new Omicron variant. In the meantime, Buck bulls have resurfaced to lift the index more firmly back above 96.000 and towards loftier levels seen earlier this week within a 96.075-324 range, eyeing Monday’s 96.448 peak ahead of the semi-psychological 96.500 mark and then the w-t-d best at 96.647 set the day after. Back to Friday’s agenda, Fed’s Bullard is due to speak and the services ISM rounds off the week. AUD/NZD - The high betas are bearing the brunt of Greenback gains, but also bearish technical forces as the Aussie and Kiwi both lose sight of key chart and simple round number levels that were keeping them afloat or declines relatively contained at least. Aud/Usd is now probing 0.7050 and a Fib retracement just above, while Nzd/Usd is hovering around 0.6775 as the Aud/Nzd cross holds in the low 1.0400 zone. JPY/CAD/CHF/GBP/EUR - All softer vs their US counterpart, with the Yen looking towards 113.50 for support with added protection from option expiry interest up to 113.60 in 1.1 bn, while the Loonie is relying on WTI to maintain recovery momentum before Canada and the US go head-to-head in the employment stakes. Usd/Cad is meandering in the low 1.2800 area as the crude benchmark regains Usd 68+/brl status from a sub-Usd 66.50 base and even deeper trough below Usd 62.50 in knee-jerk response to OPEC+ sticking to its output plan yesterday. Elsewhere, the Franc continues to straddle 0.9200, Sterling has retreated from 1.3300+ terrain again post-fractionally softer than forecast final UK services and composite PMIs, whilst a less hawkish speech from BoE hawk Saunders took Cable to a session low of 1.3255 and a 15bps Dec hike pricing fell from 51% to 26%. The Euro has also reversed from recent highs beyond 1.1300 amidst rather mixed Eurozone readings and pretty routine ECB rhetoric from President Lagarde plus GC members Knot, de Cos and de Guindos. In commodities, WTI and Brent front month futures continue to nurse losses seen earlier this week, with the post-OPEC downside completely erased alongside some more. To recap, oil contracts were under pressure from compounding COVID headlines at the start of the week and in the run-up to OPEC+ whereby ministers opted to keep production plans despite the Omicron variant and the recent SPR releases. Delving deeper into these themes, desks suggest that a dominant Omicron variant could actually be positive if the strain turns out to be milder than some of its predecessors – with the jury still out but initial reports from India and South Africa suggesting so. Regarding OPEC+, some oil traders suggest the move to maintain plans was more of a political strategy as opposed to an attempt to balance markets, with journalists also suggesting that tensions with the US have simmered down and the prospect of further SPR releases have significantly declined. Further, it's also worth bearing in mind that due to maintenance and underinvestment, the real output hike from OPEC+ producers will likely be under the 400k BPD. In terms of Iranian developments, updates have been less constructive, with sources suggesting that Iran is holding a tougher stance than during the June talks. Negotiations will break today and resume next week. Crude contracts are modestly lower on the week and well-off worst levels, with Brent Feb now back around USD 71.50/bbl (65.72-77.02 weekly range), while WTI Jan resides around USD north of USD 68/bbl (62.43-72.93/bbl). Elsewhere, spot gold and silver vary, with the former finding some overnight support around USD 1,766/oz as risk sentiment erred lower, whilst the cluster of DMAs remain around the USD 1,790-91/oz region. In terms of base metals, LME copper is flat on either side of USD 9,500/t. Overnight, Dalian iron ore futures fell amid a decline in mill demand, whilst China's steel hub Tangshan city is to launch a second-level pollution alert from December 3-10th, the local government said – providing further headwinds for iron demand. US Event Calendar 8:30am: Nov. Change in Nonfarm Payrolls, est. 550,000, prior 531,000 Nov. Change in Private Payrolls, est. 525,000, prior 604,000 Nov. Change in Manufact. Payrolls, est. 45,000, prior 60,000 8:30am: Nov. Unemployment Rate, est. 4.5%, prior 4.6% Nov. Underemployment Rate, prior 8.3% Nov. Labor Force Participation Rate, est. 61.7%, prior 61.6% 8:30am: Nov. Average Hourly Earnings YoY, est. 5.0%, prior 4.9% Nov. Average Hourly Earnings MoM, est. 0.4%, prior 0.4% Nov. Average Weekly Hours All Emplo, est. 34.7, prior 34.7 9:45am: Nov. Markit US Composite PMI, prior 56.5 Nov. Markit US Services PMI, est. 57.0, prior 57.0 10am: Oct. Factory Orders, est. 0.5%, prior 0.2% Oct. Factory Orders Ex Trans, est. 0.6%, prior 0.7% Oct. Durable Goods Orders, est. -0.5%, prior -0.5% Oct. Cap Goods Ship Nondef Ex Air, prior 0.3% Oct. Cap Goods Orders Nondef Ex Air, prior 0.6% 10am: Nov. ISM Services Index, est. 65.0, prior 66.7 DB's Jim Reid concludes the overnight wrap I got great news yesterday. It was the school Xmas Fayre last weekend and at one stall we had to guess the weight of the school duck that lives in their pond. I spent a long time analysing it outside and was trying to mentally compare it to the weights of my various dumbbells at home. I learnt yesterday that I’d won. My prize? A rubber duck for the bath. In more trivial news I also learnt I was voted no.1 analyst in four categories of the Global Institutional Investor Fixed Income Analyst awards for 2021. So many thanks for all who voted. It is very much appreciated. However in terms of physical mementoes of my achievements yesterday, all I actually have to show for it is a brown rubber duck. Guessing the weight of a duck is a walk in the park at the moment compared to predicting markets. Indeed it’s been a wild week. If you’ve managed to time all the various swings you can surely only have done it via a time machine. If you have done so without one though I will happily hand over my prized rubber duck. By the close of trade, the S&P 500 (+1.42%) had begun to recover following its worst 2-day performance in over a year. The VIX index of volatility ticked back down beneath the 30 mark again, but finished above 25 for the fourth day in five for the first time since December of last year. Meanwhile Oil plunged and then soared on OPEC+ news and curves continued to flatten as 2yr yields got back close to their pre-Omicron levels after a near 20bps round journey over the last week. I’m glad I’m a research analyst not a day trader, and that’s before we get to today’s payrolls print. We’ll start with Omicron, where yesterday predictably saw a number of new countries report confirmed cases for the first time, as well as a second case in the United States during market hours, this one with roots in New York City, which reported more than 11,300 new cases yesterday, the highest daily count since January. After the market closed, an additional five cases were identified in New York, which sent futures over -0.5% lower at the time. They are back to flat as we type possibly helped by a late deal and vote in Congress to fund the US government through to February 18th and avert a shutdown at midnight tonight. Back to the virus and governments continued to ramp up their defence measures, with Germany yesterday announcing a range of fresh restrictions as they grapple with the latest wave, including a requirement that you must either be vaccinated or have recovered from Covid in order to get into restaurants or non-essential stores. There’s also set to be a parliamentary vote on mandatory vaccinations, and incoming Chancellor Scholz said that he expected it to pass. In the US, President Biden announced new measures to fight the impending winter wave and spreading Omicron variant, including tighter testing guidelines for international visitors, wider availability of at home tests, whilst accelerating efforts to get the rest of the world vaccinated. Over in South Africa, the daily case count rose further yesterday, with 11,535 reported, up from 8,561 the previous day and 4,373 the day before that. So definitely one to keep an eye on as we look for clues about what this could mean for the world more broadly. That said, we’re still yet to get the all-important information on how much less or more deadly this might be, as well as how effective vaccines still are and the extent to which it is more transmissible relative to other variants. Back to markets, and the revival in risk appetite led to a fresh selloff in US Treasuries, with the 2yr yield up +6.7bps, and the 10yr yield up +3.7bps. Nevertheless, as mentioned at the top, the latest round of curve flattening has sent the 2s10s slope to its flattest since before the Georgia Senate seat runoff gave Democrats control of Congress. It’s now at just +82.0bps, whilst the 5s30s slope is now at flattest since March 2020, at +55.0bps. So a warning sign for those who believe in the yield curve as a recessionary indicator, albeit with some way to go before that flashes red. In Europe there was also a modest curve flattening, but yields moved lower across the board, with those on 10yr bunds (-2.6bps), OATs (-3.2bps) and BTPs (-5.6bps) all down by the close. Over in equities, there was a decent rebound in the US following the recent selloff, with the S&P 500 (+1.42%) posting a solid gain. It was a very broad-based advance, with over 90% of the index’s members moving higher for the first time since mid-October. Every S&P sector increased, which was enough to compensate for the noticeable lag in mega-cap shares, with the FANG index gaining just +0.15%. The STOXX 600 decreased -1.15%, though that reflected the fact Europe closed ahead of the big reversal in sentiment the previous session. Aside from Omicron, one of the other biggest stories yesterday was the decision by the OPEC+ group to continue with their production hike, which will add a further +400k barrels/day to global supply in January. The news initially sent oil prices sharply lower, with Brent crude falling to an intraday low beneath $66/bbl, before recovering to end the day back at $69.67/bl in light of the group saying that they could adjust their plans “pending further developments of the pandemic”, with the ability to “make immediate adjustments if required”. Even with the bounceback yesterday however, oil has been one of the worst-performing assets over recent weeks, with Brent hitting an intraday high of $86.7/bbl in late-October, followed by a November that marked its worst monthly performance since the pandemic began. Overnight in Asia stocks are trading mostly higher with the KOSPI (+0.86%), Shanghai Composite (+0.58%), CSI (+0.35%) and the Nikkei (+0.29%) up but with the Hang Seng (-0.74%) under pressure amid the ongoing regulatory clampdown in technology from China as Didi prepares to delist on US markets. Looking forward now, the main highlight on today’s calendar is the US jobs report for November, which comes less than two weeks’ away from the Fed’s meeting where they’ll decide on the pace of tapering. In terms of what to expect, our US economists are looking for nonfarm payrolls to grow by +600k, which would be the fastest pace of job growth since July, and that in turn would take the unemployment rate down to a post-pandemic low of 4.4%. Ahead of that, we had another decent weekly claims report (albeit that took place after the jobs report survey period), with the number for the week through November 26 coming in at a stronger-than-expected 222k (vs. 240k expected). The previous week’s number was also revised down -5k, sending the 4-week moving average down to its own post-pandemic low of 238.75k. Looking at yesterday’s other data releases, the Euro Area unemployment rate fell to a post-pandemic low of 7.3% in October, in line with expectations. However producer price inflation shot up even faster than anticipated to +21.9% (vs. 19.0% expected). To the day ahead now, and the aforementioned US jobs report for November will be the highlight. Other data releases include the services and composite PMIs for November from around the world, Euro Area retail sales for October, and in addition from the US, there’s October’s factory orders and the November ISM services index. From central banks, we’ll hear from ECB President Lagarde and chief economist Lane, the Fed’s Bullard and the BoE’s Saunders. Tyler Durden Fri, 12/03/2021 - 07:55.....»»

Category: blogSource: zerohedgeDec 3rd, 2021

The Training Wheels Are Off

The Training Wheels Are Off Authored by Peter Tchir via Academy Securities, The child’s thrill of being free to ride, almost feeling as if you could fly! The parent’s trepidation of letting the bike go for the first time. Sometimes that first ride goes without a hitch. It often ends up with some scrapes and bruises, but ultimately ends in success. I think we are at that moment where the parent is running alongside the bike, just about ready to let go for the first time. I am currently modestly bearish the overall market, though bullish on re-opening type trades, and bearish on some of the biggest winners. On credit, I’m cautious and resisting the urge to hit the “buy buy buy” button, but think that time will be soon. I’d really like to load up on European and emerging market risk, but I’ve locked that “buy” button away for now. This follows up Sunday’s ΔΓΟ (Delta, Gamma, Omicron) report. It also fits nicely with yesterday’s Bloomberg TV where we hit on many of these subjects. What Training Wheels are Being Removed? I think there are a few key elements that the markets must digest. Some have already started to get priced in, some have been discussed, but not reacted to, and some I think are being ignored at our own peril. Less Supportive Central Bank Policy. This is starting to sink in. Powell finally got rid of the word transitory. Markets are trying to figure out if a policy mistake is coming (curve flattening). There is also some discussion about just how serious Powell is. The Bank of England after all, had the market all set for a hike and then flaked at the last second. So, it is reasonable to believe that Powell may be talking tough, but won’t act tough. I expect a much faster pace of tapering to be announced at December, while he tries to downplay the need to hike, or how far and fast they will have to hike. In any case, I think the market must absorb a bit more volatility, especially in the stocks that seem to have been most dependent on TINA (there is no alternative). Inflation has become a political hot potato. If you think Powell’s job was already difficult (which it is) add in the fact that politicians are now weighing in on inflation. Some of their takes strike me as completely absurd, but inflation and interest rates have moved out of the wonky world of Wall Street into the soundbite world of D.C.  I think this is such an important distinction that I have treated it as a separate bullet point, rather than lumping it into the less supportive central bank bullet. Consumption was brought forward. The T-Report has been speculating about the idea that consumers, not being stupid, responded to supply shortages, by loading up on goods early, for well over a month, but now we are seeing signs that the speculation may be accurate. Black Friday sales were down (even with higher prices). Ditto for Cyber Monday (btw, the number of “you still have time to get XX% off” e-mails that are flooding my inbox, isn’t comforting). Finally, yesterday, Apple told suppliers iPhone demand is slowing ahead of the holidays. I don’t think any risk of consumer slowdown is being priced in, largely because it is a highly speculative argument I’ve made, but as anecdotal evidence starts getting supported by hard evidence, this could become a market moving issue relatively quickly. Maybe we see a shift from spending on goods to services, but that assumes that consumers aren’t tapped out, and that covid won’t interfere with the service oriented sector (a risk that seems to be increasing with the omicron variant). The Re-Centralization of China. The August 1st T-Report discusses the basic premise that China is delinking from the global economy, and reasserting the authority of the Communist Party. Nothing has changed since then, and China continues to plow ahead in the process. The biggest takeaways are that China will no longer act as a deflationary influence and that businesses and the global economy need to adjust to this new reality. KWEB, a China Internet ETF is down 42% YTD, but its 3 year annual return is just over 1% (that seems shockingly low). FXI, a broad based China ETF is “only” down 18% on the year but has annualized losses of 1% of the past 3 years. Normally, as a contrarian, I’d be chomping at the bit to buy these, but I won’t touch them as I think it is reflective of an ongoing trend that will not reverse quickly. It might also be worth mention that Lehman was NOT a Moment, and the Evergrande/real estate story in China is far from being resolved. Bottom Line I think we can remain cautious on risk, continuing to shift into companies and industries that will benefit from a focus on domestic supply chains (production repatriation) while being cautious on those stocks that most benefitted from the environment that seems to be ending to me. The bright side, is I do see an economy and market that will be really exciting to be a part of, and that we might even skip the scrapes and bruises, though I suspect we won’t learn to ride without training wheels without a little more difficulty. While I did mention covid once in this report, I want to re-emphasize that my concerns right now are NOT tied to covid at all (I suspect we will adjust to the new variant and governments across the globe will not muck things up with unnecessary and/or impractical rules). In any case, December might be more interesting than usual! Tyler Durden Fri, 12/03/2021 - 06:30.....»»

Category: worldSource: nytDec 3rd, 2021

The Fed Admits It Has Lost Control

The Fed Admits It Has Lost Control Submitted by QTR's Fringe Finance Like any junkie with an addiction, the first step is admitting that you have a problem. It was no sooner than Paul Krugman came out less than two months ago declaring a win for what he called “Team Transitory” that Jerome Powell sat in front of a Senate panel and was forced to admit he had a problem. Powell seemed to come to terms yesterday that he was stuck between a rock (brutal, unrelenting consumer inflation) and a hard place (the inability to raise rates or taper without fuck-tangling the entire economy and capital markets). The Fed Chair admitted in front of a Senate panel yesterday that “it’s probably a good time to retire” the word “transitory” to describe inflation. He continued: “At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner,” according to CNBC. Of course, to those of us without our heads up our asses over the last 18 months, like Jerome Powell, this admission doesn’t come as that much of a surprise. I have been covering, writing and ranting [here, here, here and here] about why I believed it was obvious that the inflation we’re experiencing is not transitory, for months now. In fact, I would argue that the extent of the coming inflation problem has been pretty obvious to just about anybody. This makes it extra hilarious that the Fed has been hiding behind this vaudeville act of pretending they just noticed that inflation has barely nudged above their 2% target. The reality is that price hikes for the everyday American are 10%, 20%, sometimes up to 50% on products and services they need for their day-to-day lives. In addition to what we can experience with our very own eyes and wallets, every single major consumer products manufacturer and industrial company has commented that their cost of raw materials has gone up. The American public has been so aware of inflation, it has even become a part of the mainstream media narrative on both the left and the right. Photo: The Counter SignalInflation has been out of control for years now: you know it, and now nobody can say that the Fed doesn’t know it. In addition to relinquishing the “transitory” term yesterday, Powell even indicated to the Senate panel that accelerating their taper and considering rate hikes were on the table. This is especially bold language in the face of the newly-discovered omicron variant, which I predicted days ago would give the Fed a perfect excuse if they wanted to to continue quantitative easing. While I happen to think this will be the Delta variant part 2 (in that it drums up a lot of hysteria and then everyone eventually ignores it), that doesn’t mean the government and markets won’t overreact to the news. Remember, scary sounding words like “mutation”, “spike protein” and “variant” are a prompt to act like hysterical hyenas and usurp power unilaterally for those on the left side of the aisle (read: our entire government right now). But based on Powell’s testimony yesterday, it looks like the problem of high prices is going to take precedence over using omicron as another crutch to push a socialist modern monetary theory agenda - at least for the time being. And while uncertainty surrounding omicron is part of the discussion, markets plunged on Tuesday of this week mainly because of the verbiage Powell used when describing the taper and potential rate hikes, in my opinion. The only question now is whether Powell has the stones to stand by his hawkishness. If the Fed does look to accelerate the taper and toss around the idea of rate hikes in order to try and rope inflation in, as indicated, I think we can expect further downside in equity markets in December, as I predicted about a week ago. In fact, Powell doesn’t even have to re-acknowledge what he said yesterday, he simply has to say nothing until the Fed’s next official nod to the markets. That isn’t to say that his taper/rate hike plan is or isn’t going to work. It’s only to say that it will introduce a significant amount of volatility to markets that hasn’t been there over the last year and a half. In other words, if your strategy is like that Target manager that made a million dollars shorting the VIX 2018, it might be a great time to take a month off. In a volatile situation, I would expect small caps and technology to get hit the hardest, with some rotation into blue chips, staples and Dow Industrials, although these three areas of respite may eventually wind up lower as well. From there, it’s going to be a question of how inflation responds and how much leeway the market gives the Fed before fear of an impending credit catastrophe starts to spread. Photo: NY TimesOf course, the newfound hawkishness also leaves Powell room to backtrack - something that the Fed loves to do and are experts in - by slowing the taper or pushing rate hikes back further. At least for now, however, the market appears to have started to take its medicine due to Powell’s change of stance. As of today, the omicron variant doesn’t look like it’s going to have a material effect on the Covid universe. That is, except for the effect our overreaching government wants to cause themselves. While most indications over the last 72 hours have been that omicron isn’t more deadly than other variants, the government doesn’t seem to care and has already sought out new restrictions that will once again throw a wrench in the gears of business, industry and people’s daily lives. Creating a problem where there isn’t one: it’s the Keynesian Government’s way. Precious metals were higher on the day yesterday before Powell’s testimony, when they shifted drastically lower on expectations of hawkish policy. An interesting setup for gold here is that it may actually transition from being an inflationary hedge to just a hedge for market volatility and systemic risk. If we start to try and redline a taper or rate hikes and the economy or credit markets start to get really volatile, gold may be still seen as a safe haven, despite the fact that the clear and present worry wouldn’t necessarily be inflation at the time. I think this is why my friend Rosemont Seneca wants to own it heading into 2022. But of course there’s also many of the school that believe inflation is coming no matter what the outcome over the next several months is. Many believe that the Fed won’t be able to raise rates because they won’t be able to service the national debt or do so without creating a credit crisis. Ergo, the only option is then to try to print their way out of the corner they have painted themselves in. I think both of these scenarios act as a tailwind for gold. I also think commodities may still be in play as demand fears from omicron will eventually fade away, in my opinion. Omicron will, in my opinion, go the way of the Delta variant, in that it’ll be a great new scary sounding headline for people in the liberal media to push, but the everyday person isn’t going to give a shit about it. What is important here is that it truly looks like the Fed is trying to shift gears. It looks like we’re heading into a new era as we move into December and into 2022. I had a feeling this type of volatility would be on its way heading into the end of the year because the Fed has painted itself into a very difficult corner to get out of. While I don’t think they have done anything productive in terms of bringing new solutions to the inflation problem to the table, they have at least acknowledged the fact that they have lost control. Yesterday may only be the beginning of the every day investor realizing not just that there’s an inflation problem, but more importantly that we may not have the solution for it. *  *  * Zerohedge readers always get 10% off a subscription to my blog for life by using this link. DISCLAIMER:  It should be assumed I have positions in any security or commodity mentioned in this article and could benefit from my analysis proving correct. None of this is a solicitation to buy or sell securities. None of this is financial advice. Positions can always change immediately as soon as I publish, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I get shit wrong a lot.  Tyler Durden Thu, 12/02/2021 - 11:40.....»»

Category: smallbizSource: nytDec 2nd, 2021

Hawks Triumph, Doves Lose, Gold Bulls Cry!

The hawkish revolution continues. Powell, among the screams of monetary doves, suggested this week that tapering could be accelerated in December! Q3 2021 hedge fund letters, conferences and more People live unaware that an epic battle between good and evil, the light and dark side of the Force, hard-working entrepreneurs and tax officials is waged […] The hawkish revolution continues. Powell, among the screams of monetary doves, suggested this week that tapering could be accelerated in December! if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more People live unaware that an epic battle between good and evil, the light and dark side of the Force, hard-working entrepreneurs and tax officials is waged every day. What’s more, hawks and doves constantly fight as well, and this week brought a victory for the hawks among the FOMC. The triumph came on Tuesday when Fed Chair Jerome Powell testified before Congress. He admitted that inflation wasn’t “transitory”, as it is only expected to ease in the second half of 2022. Inflation is therefore more persistent and broad-based than the Fed stubbornly maintained earlier this year, contrary to evidence and common sense: Generally, the higher prices we’re seeing are related to the supply and demand imbalances that can be traced directly back to the pandemic and the reopening of the economy. But it’s also the case that price increases have spread much more broadly and I think the risk of higher inflation has increased. Importantly, Powell also agreed that “it’s probably a good time to retire that word.” You don’t say! Hence, the Fed was wrong, and I was right. Hurray! However, it’s a Pyrrhic victory for gold bulls. This is because the recognition of the persistence of inflation pushes the Fed toward a more hawkish position. Indeed, Powell suggested that the FOMC participants could discuss speeding up the taper of quantitative easing in December: At this point the economy is very strong and inflationary pressures are high and it is therefore appropriate, in my view, to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner, and I expect that we will discuss that at our upcoming meeting in a couple of weeks. What’s more, Powell seemed to be unaffected by the Omicron coronavirus strain news. He was a bit concerned, but not about its disturbing impact on the demand side of the economy; he found supply-chain disruptions that could intensify inflation way more important. That’s yet another manifestation of Powell’s hawkish stance. Implications for Gold What does the Fed’s hawkish tilt imply for the gold market? Well, gold bulls get along with doves, not hawks. A more aggressive tightening cycle, including faster tapering of asset purchases, could boost expectations of more decisive interest rates hikes. In turn, the prospects of a more hawkish Fed could increase the bond yields and strengthen the US dollar. All this sounds bearish for gold. Indeed, the London price of gold dropped on Wednesday below $1,800… again, as the chart above shows. Hence, gold’s inability to stay above $1,800 is disappointing, especially in the face of high inflation and market uncertainty. Investors seem to have once again believed that the Fed will be curbing inflation. Well, that’s possible, but my claim is that despite a likely acceleration in the pace of the taper, inflation will remain high for a while. I bet that despite the recent hawkish tilt, the Fed will stay behind the curve. This means that the real interest rates should stay negative, providing support for gold prices. The previous tightening cycle brought the federal funds rate to 2.25-2.5%, and we know that after an economic crisis, interest rates never return to the pre-crisis level. This is also what the euro-dollar futures suggests: that the upcoming rate hike cycle will end below 2%. The level of indebtedness and financial markets’ addiction to easy money simply do not allow the Fed to undertake more aggressive actions. Will gold struggle in the upcoming months then? Yes. Gold bulls could cry. But remember: tears cleanse and create more room for joy in the future. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care Updated on Dec 2, 2021, 11:55 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 2nd, 2021

Bridge Too Far

S&P 500 gave up sharp intraday gains on the first Omicron patient in CA. Corona packing punch still, and sending TLT far above yesterday‘s highs while the dollar remained unchanged. That‘s as risk-off as can be on a little surprising headline – the key difference is though that the Fed doesn‘t have the back of […] S&P 500 gave up sharp intraday gains on the first Omicron patient in CA. Corona packing punch still, and sending TLT far above yesterday‘s highs while the dollar remained unchanged. That‘s as risk-off as can be on a little surprising headline – the key difference is though that the Fed doesn‘t have the back of buy the dippers this time. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more The accelerated taper noises coupled with demand destruction thanks to Omicron, is delivering an inflation repreive. Make no mistake though, should demand be choked off too hard, fresh stimulus would have to come – for now in the heat increasingly being turned on, practically all asset classes suffer to varying degrees. The market isn‘t yet at a stage of sniffing out fresh stimulus countering the destructive policy effects which are being felt currently. Economic activity around the world hasn‘t been hampered, but markets are willing to err on the pessimistic side. For now and still – only when the riskier debt instruments such as HYG turn up to deal with the prior downswing, would be a reason to cheer for animal spirits returning. That idea sounds though hollow at this time. The bears have the upper hand unless proven otherwise – that is, by a close in the 4670s. Which is what the title says... Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 breaking below the 50-day moving average, and taking time consolidating below, isn‘t bullish at all. The reversal was broad based, arguably hitting value more. Yes, market breadth is dismal. Credit Markets Positive HYG divergence is gone – the broad underperformance of S&P 500 must be reversed first to make stock market upswings trustworthy. It remains unclear how much would HYG be able to rebound when quality debt instruments cool off. Gold, Silver and Miners Precious metals weakness remains, but isn‘t convincing enough to short the market, no. The coming reversal to the upside would be ferocious, but we aren‘t there yet. Crude Oil Crude oil plunge is slowing down, and it‘s more than black gold that‘s looking for direction here – this concerns the commodities complex as such. I‘m looking for copper to show the way, and oil to follow. Copper Copper is sitting at a rising support line, undecided yet whether to take the Fed and Omicron threats seriously or not. It‘s wait and see for now, but the bullish side has the medium-term upper hand. Bitcoin and Ethereum Bitcoin and Ethereum are cautious as well, but the bears are looking for an ambush – let‘s see how far they can get. Summary The ugly S&P 500 close concerns both value and tech – and there was no premarket upswing to speak of. The bears have the upper hand for today as markets look to be in the phase of sell first, ask questions later. Any reversal (in stocks or commodities) has to be accompanied by a credible upswing in riskier bonds, ideally with money coming out of the dollar as well. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Dec 2, 2021, 11:56 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 2nd, 2021

"Here Comes A Revolution!" - Saxo Bank Unveils Its "Outrageous Predictions" For The Year Ahead

"Here Comes A Revolution!" - Saxo Bank Unveils Its 'Outrageous Predictions' For The Year Ahead Saxo Bank has today released its 10 Outrageous Predictions for 2022. The predictions focus on a series of unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets: The plan to end fossil fuels gets a rain check Facebook faceplants on youth exodus The US mid-term election brings constitutional crisis US inflation reaches above 15% on wage-price spiral EU Superfund for climate, energy and defence announced, to be funded by private pensions Women’s Reddit Army takes on the corporate patriarchy India joins the Gulf Cooperation Council as a non-voting member Spotify disrupted due to NFT-based digital rights platform New hypersonic tech drives space race and new cold war Medical breakthrough extends average life expectancy 25 years As culture wars rage across the world, it’s no longer a question of if we get a socioeconomic revolution, but a question of when and how. But which revolutionary prediction do you think is most likely? Saxo CIO Steen Jakobsen summarizes the theme for 2022 Outrageous Predictions is Revolution. There is so much energy building up in our inequalityplagued society and economy. Add to that the inability of the current system to address the issue and we need to look into the future with the fundamental outlook that it’s not a question of whether we get a revolution, but more a question of when and how. With every revolution, some win and some lose, but that’s not the point—if the current system can’t change but must, a revolution is the only path forward. A culture war is raging across the globe and the divide is no longer simply between the rich and the poor. It’s also the young versus the old, the educated class versus the less educated working class, real markets with price discovery versus government intervention, stock market buy-backs versus R&D spending, inflation versus deflation, women versus men, the progressive left versus the centrist left, virtual signalling on social media versus real changes to society, the rentier class versus labour, fossil fuels versus green energy, ESG initiatives versus the need to supply the world with reliable energy—the list goes on. What’s interesting for me, having done this Outrageous Predictions list for twenty years, is that all of the above issues point to a cycle ending rather than a continuation of more of the same. Post-pandemic (well, mostly) the market is hoping that things will continue as before, but as an old mentor of mine used to say, when I answered one of his questions with “I hope”: “Listen, son, save hope for church on Sundays, and come back when you have something more concrete.” The year 2022 is likely to see far less of what markets are hoping for and far more in the way of volatility as revolutionary movements kick into gear that challenge the status quo as we grope our way towards a new paradigm. Some of these movements will get things right, some of them will make mistakes, but we need to get started. Pretty much everything needs to change if we are to achieve zero emissions, less inequality, stable energy and importantly, more productivity. 2021 was a year in which we thought we could firmly put Covid behind us, but as 2022 rolls into view, we’re simply not there yet. It was a year with unprecedented fiscal transfers, especially to lower-income households, which created excess demand in a geopolitically and supply chain–fragmented world. The physical world simply became too small to absorb the good, if misguided, intentions of politicians and central banks to keep the economy on an even keel. Now we find ourselves with an energy crisis on our hands—and that’s not an outrageous call. But how we deal with it could create both policy mistakes and fundamental changes. A cold winter, for example, could spark a counter-revolution against the current alternative energy narrative, requiring that we reconfigure our expectations around how quickly we can abandon fossil fuels (Outrageous Prediction number 1 for 2022!) and even reclassifying nuclear energy as green. Doing anything else is simply not viable if we want to avoid a collapse in the real economy. We do realise that the Revolution theme for OP 2022 can create negative associations. To many of us, the word Revolution calls forth the 1789 French Revolution with its call for “Liberty, Equality, and Fraternity”, but also the Russian Revolution and its “smash the capitalists” principles. But our intent is the broader definition of revolution: not the physical overthrowing of governments, but eurekalike moments that trigger a change of thinking, a change of behaviour and a rejection of the unsustainable status quo. Hopefully, each of the Outrageous Predictions echoes that general point, with a couple of the revolutions triggered by the “involuntary” implications of technical progress: hypersonic missiles and longevity therapy. We need more liberty from governments in some areas, like a less heavy-handed monetary policy and the moral hazard of unproductively backstopping markets it brings. And we need more regulation in others, like avoiding the dangers of a hyper-financialised economy, too-powerful monopolies and inequality. Most urgently, we need to provide a brighter outlook for the world’s young people and better cooperation among nations instead of the present trend away from globalisation and multilateral institutions. We collaborated globally on Covid vaccines in 2020 and 2021. Now we need a new Manhattan Project–- type endeavour to set the marginal cost of energy, adjusted for productivity, on the path to much lower levels while eliminating the impact of our energy generation on the environment. Such a move would unleash the most significant productivity cycle in history: we could desalinate water, make vertical farms feasible almost anywhere, enable the leap to quantum computing, and continue to explore new boundaries in biology and physics. Remember that the world is forever evolving if at varying speeds, while business and political cycles are always finite. We are betting that in 2022 the speed of evolution kicks up a few notches into a revolutionary state as a new cycle gets under way. ‘Change is good’ needs to be the new mantra, or at minimum: “trial and error”. Let’s at least try and err some more rather than trying to forever kick the can down the road! Finally, we must emphasise our annual caveat, that these Outrageous Predictions should not be seen as our official view on the market and politics. This year, more than ever, we’re trying to provoke you and ourselves to think outside the box and to engage in discussing the important topics we raise. Let the fun, and the future, begin. *  *  * The plan to end fossil fuels gets a rain check Summary: Policymakers kick climate targets down the road and support fossil fuel investment to fight inflation and the risk of social unrest while rethinking the path to a low-carbon future. Facebook faceplants on youth exodus Summary: The young abandon Facebook’s platforms in protest against their mining of personal information for profit; the attempt by Facebook parent Meta to reel them back in with the Metaverse stumbles. The US mid-term election brings constitutional crisis Summary: The US mid-term election sees a stand-off over the certification of close Senate and/or House election results, leading to a scenario where the 118th Congress is unable to sit on schedule in early 2023. US inflation reaches above 15% on wage-price spiral Summary: By the fourth quarter of 2022, US CPI inflation reaches an annualized 15% as companies bid up wages in an effort to find willing and qualified workers, triggering a wage-price spiral unlike anything seen since the 1970’s. EU Superfund for climate, energy and defence announced, to be funded by private pensions Summary: To defend against the rise of populism, deepen the commitment to slowing climate change, and defend its borders as the US security umbrella recedes, the EU launches a bold $3 trillion Superfund to be funded by pension allocations rather than new taxes. Women’s Reddit Army takes on the corporate patriarchy Summary: Mimicking the meme stock Reddit Army tactics of 2020-21, a group of women traders launch a coordinated assault on companies with weak records on gender equality, leading to huge swings in equity prices for targeted companies. India joins the Gulf Cooperation Council as a non-voting member Summary: The world’s geopolitical alliances will lurch into a phase of drastic realignment as we have an ugly cocktail of new deglobalising geopolitics and much higher energy prices. Spotify disrupted due to NFT-based digital rights platform Summary: Musicians are ready for change as the current music streaming paradigm means that labels and streaming platforms capture 75-95 percent of revenue paid for listening to streamed music. In 2022, new blockchain-based technology will help them grab back their fair share of industry revenues. New hypersonic tech drives space race and new cold war Summary: The latest hypersonic missile tests are driving a widening sense of insecurity as this tech renders legacy conventional and even nuclear military hardware obsolete. In 2022 a massive hypersonic arms race develops among major militaries as no country wants to feel left behind. Medical breakthrough extends average life expectancy 25 years Summary: Young forever, or for at least a lot longer. In 2022, a key breakthrough in biomedicine brings the prospect of extending productive adulthood and the average life expectancy by up to 25 years, prompting projected ethical, environmental and fiscal crises of epic proportions. *  *  * Read the full report below: Tyler Durden Thu, 12/02/2021 - 08:45.....»»

Category: personnelSource: nytDec 2nd, 2021

The Fed Finally Fights Inflation

In his Daily Market Notes report to investors, while commenting on inflation, Louis Navellier wrote: Q3 2021 hedge fund letters, conferences and more Markets are manic crowds and like to panic from time to time. However, our survey this week shows that only 27% of retail investors believe the Omicron variant will cause a market sell off by […] In his Daily Market Notes report to investors, while commenting on inflation, Louis Navellier wrote: if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Markets are manic crowds and like to panic from time to time. However, our survey this week shows that only 27% of retail investors believe the Omicron variant will cause a market sell off by the end of the year. Consumer Confidence Down Viruses mutate and tend to become less deadly over time, just like the Spanish Flu fizzled out within a couple of years.  Although Dr. Anthony Fauci said the U.S. should be prepared to do “anything and everything” to fight the Covid-19 Omicron variant, he also added that it is “too early to say” whether we need new lockdowns or mandates.  However, it would be political suicide to impose new domestic lockdowns or mandates, so I do not expect fears over the Covid-19 Omicron variant to impact consumer confidence and spending.  Although Black Friday sales were reported to be down 28% compared to last year, the Black Friday sales this year started early, so I still expect this holiday shopping season is shaping up to set all-time records.  As an example, Commerce Department reported personal income rose 0.5% in October, while consumer spending rose 1.3%.  The personal savings rate declined to 7.3% in October.  Anytime consumers are willing to incur debt bodes well for both consumer confidence and holiday spending.  I should add that the Atlanta Fed is now estimating 8.6% annual GDP growth for the fourth quarter, which will largely be driven by robust consumer spending. The manufacturing sector also remains strong.  As an example, the Commerce Department announced that durable goods orders rose 0.5% in October.  Durable goods have risen for 15 of the past 18 months since the April 2020 pandemic low.  Core capital goods rose 0.6% in October as business spending rebuilding inventories and consumer spending remained strong.  Year to date, durable goods orders have risen 22.1%, but shipments have risen 13.1%, so businesses continue to have robust order backlogs that have been complicated by component and part shortages. When both consumers and businesses are healthy, it is effectively acting as a “one-two” punch to propel the U.S. economy and the stock market dramatically higher.  The Fed remains dovish and although the monthly quantitative easing has been curtailed from $120 billion per month to $105 billion, the decrease in quantitative easing was lower than many economists anticipated.  Furthermore, Fed Chairman Jerome Powell was reappointed for a second four-year term, so the Fed is expected to remain dovish. As a result, the “Goldilocks” environment of low-interest rates and persistent quantitative easing persists.  The Wall Street Journal had a fascinating article about Modern Monetary Theory (MMT) and how deficit-financed governments, including the U.S., have gone beyond the point of no return without any “fear of debt.”  The fact that all the money pumping in recent years has not driven interest rates significantly higher has lured politicians into compliancy and put many central bankers in a corner where they cannot raise key interest rates too much. As an example that there is no government fear of debt, the infrastructure bill that passed the House of Representatives and is expected to be extensively modified by Senate in 2022, will be largely financed by more MMT, since hiking taxes in an election year is political suicide.  This essentially means that the Biden Administration will be putting more pressure on the Fed to continue its quantitative easing and money printing so it can continue to boost the federal government’s spending. Strong USD The other “force” helping to keep Treasury bonds low is a strong U.S. dollar.  Since late June, the WSJ Dollar index has appreciated almost 6% against major currencies.  The primary reason the U.S. dollar is rallying is due to higher government bond yields than Japan and Europe, plus a strong economic outlook.  Eventually, a stronger U.S. dollar helps to lower the prices on most important goods as well as commodities (since they are priced in U.S. dollars).  So the Fed’s argument that inflation is “transitory” has some merit, since a strong U.S. dollar will help to push down the prices of imported goods and some commodities. In the meantime, the fear of the Covid-19 Omicron variant and reduced international travel has pushed crude oil prices below $70 per barrel.  Natural gas prices are much more dependent on winter weather, since a cold winter can cause natural gas prices to surge, so energy inflation may persist a bit longer.  The good news is most of our inflation is related to food (high natural gas prices impact fertilizer costs), energy and used vehicle prices (due to the shortage of new cars due to the semiconductor chip shortage).  So much of this inflation is expected to eventually moderate by late 2022. The National Association of Realtors this week announced that existing home sales rose 7.5% in October compared to September.  In the past 12 months, existing home sales have declined 1.4%.  Mortgage rates have risen to an average of 3.22% at the end of October according to Mortgage News Daily. There are only 1.25 million homes for sale, which represents a 2.4-month inventory at the current sales pace.  Median home prices are expected to continue to rise due to tight inventories and continued low mortgage rates. The Conference Board on Tuesday announced that its consumer confidence index declined a bit to 109.5 in November.  The present situation component declined to 142.5, while the expectations component fell to 87.6.  This drop in consumer confidence is very minor and consumers were likely perturbed by the prices at the pump and other inflation that is finally starting to moderate as crude oil prices decline on the Covid-19 Omicron fear. Fed Finally Fights Inflation ADP reported on Wednesday that private payrolls rose by 534,000 in November.  I should add that economists are expecting that the Labor Department will be reporting 548,000 new November payroll jobs on Friday.  The labor force participation rate and average hourly wages will be closely scrutinized.  Clearly, everyone that wants a job can get a job in the currently ultra-tight labor market, so I hope the Fed concludes that its unemployment mandate has been fulfilled. Speaking of the Fed, Chairman Jerome Powell, who was just reappointed for a second term, before the Senate Banking Committee on Tuesday admitted that “The risk of higher inflation has increased.”  Furthermore, Powell also said “To get back to the kind of great labor market we had before the pandemic, we’re going to need … price stability,” then concluded by saying “To get back to the kind of great labor market we had before the pandemic, we’re going to need … price stability.”  Translated from Fedspeak, Chairman Powell basically admitted that the Fed is finally getting ready to pivot from its unemployment mandate to its inflation mandate. Chairman Powell also hinted that the Fed may further reduce its quantitative easing by saying “The economy is very strong and inflationary pressures are high, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases … perhaps a few months sooner.”  So the Fed Chairman is starting to lay the groundwork for fighting inflation in the New Year.  Amazingly, the 10-year Treasury bond yield fell below 1.5% as the Fed Chairman spoke in front of the Senate Banking Committee. The Institute of Supply Management (ISM) on Wednesday announced that its manufacturing index rose to 61.1 in November.  The new orders component rose to 61.5, while the production component surged to 62.2.  The backlog of orders component slipped to 61.9 in November, which is still very healthy since any reading over 50 signals an expansion.  Overall, 13 of the 15 industries that ISM surveyed expanded in November and the manufacturing sector remains very healthy. Heard & Notable Canada taps into its strategic reserves to deal with a massive shortage of maple syrup. Worldwide demand jumped 21% prompting The Canadian group Quebec Maple Syrup Producers to release about 50 million pounds of its strategic maple syrup reserves — about half of the total stockpile. Source: NPR Updated on Dec 1, 2021, 5:09 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 1st, 2021

Oil Pares Gains Post OPEC Meeting/EIA Report

OANDA – December Rally Faded Already, Mixed US Data, Oil Pares Gains Post OPEC Meeting/EIA Report, Gold Rebounds, Bitcoin Higher Post Gensler Q3 2021 hedge fund letters, conferences and more US stocks were off to a good start in December as traders became both optimistic that Omicron would not lead to a more severe illness […] OANDA – December Rally Faded Already, Mixed US Data, Oil Pares Gains Post OPEC Meeting/EIA Report, Gold Rebounds, Bitcoin Higher Post Gensler if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more US stocks were off to a good start in December as traders became both optimistic that Omicron would not lead to a more severe illness than the Delta variant and viewed Powell’s hawkish twist as more of a shift to the center. Equities pared gains after South Africa COVID cases nearly doubled since Tuesday and after their infectious disease official Richard Lessells noted it is too early to say Omicron only causes mild cases. The next couple of weeks will likely see risk appetite take a cue from incremental Omicron updates, supply chain issues, and every inflation reading. A second day of Powell at Capitol Hill saw him stick to his faster taper talk and uncertainty over when will inflation come down. Stocks gave up most of their gains after the US confirmed its first case of the Omicron variant. We've seen this movie before and Wall Street will likely remain COVID variant headline driven until a clear assessment over this wave can be made. US Data The ADP private payroll report showed 534,000 jobs were created in November, a beat of the 525,000 estimate, but lower than the 570,000 prior reading.  Leisure and hospitality jobs were over 30% of the positions added to the service sector, but that rebound could be in jeopardy if Omicron continues to increase. The ISM manufacturing report was somewhat positive, but nothing to brag about as the headline index rose marginally from 60.8 to 61.1 and as both new orders and employment posted modest increases. Supply chain issues appear to be improving, but orders are still below their recent highs. Oil Crude oil prices pared gains after the EIA reported a small headline draw with crude inventories, but more importantly showed a massive build with gasoline and diesel stockpiles, a 100,000 bpd increase with US production, and a minimal rebound with exports. Nothing to really get excited from the EIA report, so WTI crude should consolidate here until tomorrow’s OPEC+ decision on output. WTI crude returned to session lows after CDC identified its first Omicron case in the US. It was inevitable that Omicron would make it to the US, but when you combine how quickly it appears to be spreading across South Africa, energy traders are getting more concerned about the short-term crude demand outlook. With just under 30% of the US population being unvaccinated, nervousness about large parts of the country entering lockdown mode could grow if Omicron is proven to be much more transmissible than delta. Crude prices may get a boost from OPEC+ delay in delivering an increase in output, but the Omicron variant will likely wreak havoc over the short-term demand outlook. Gold Gold is struggling here as Wall Street can’t agree on a clear path for the dollar following Fed Chair Powell’s hawkish pivot and mounting fears Omicron might disrupt growth over the short-term. Fed rate hike expectations are constantly moving as traders grapple with the question, can the Fed really signal rate hikes are imminent as the economy potentially faces another COVID wave? Gold prices are facing plenty of technical resistance from the three key (200-, 100- and 50-day) SMAs and the psychological $1800 level.  Real yields are rising today and that is another reason why gold can’t really benefit from the risk-off Omicron environment. Gold will likely consolidate here until the dollar takes a clear path. Cryptos Bitcoin is bouncing back alongside risky assets as crypto traders grow optimistic regulators will soon form crypto-banking guidelines that could help deliver the next wave of investment. Bitcoin extended gains after SEC reiterated calls for cryptocurrency exchanges to register with the SEC. The cryptoverse is stuck in wait-and-see mode over what inflation will force the Fed to do and with how the regulatory environment will look. Cryptos are the top performing asset class again heading into year end, so any fears that the Fed may have to accelerate their rate hiking plans could prove to be short-term negative for Bitcoin and Ethereum. Article By Edward Moya, OANDA Updated on Dec 1, 2021, 4:07 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 1st, 2021

It’s the Fed, Not Omicron

S&P 500 plunged on accelerated tapering intentions, and much of the risk-on sectors and commodities followed – even precious metals declined a little in sympathy. But where is the larger reasoning? If the Fed truly intends to taper faster in its belated fight against inflation, it‘s a question of not only markets throwing a tantrum, […] S&P 500 plunged on accelerated tapering intentions, and much of the risk-on sectors and commodities followed – even precious metals declined a little in sympathy. But where is the larger reasoning? If the Fed truly intends to taper faster in its belated fight against inflation, it‘s a question of not only markets throwing a tantrum, but of the real economy keeling over. Inflation is a serious problem, including a political one, and here come the Omicron demand-choking effects if the fear card gets played too hard. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Thankfully, reports indicate that the alleged variant is merely more contagious and having comparatively milder effects. That‘s how it is usually turns out with mutations by the way – remember that before the number 30 frequently thrown around, shuts off thinking including in the markets. The world‘s economic activity didn‘t come to a standstill with Delta, and it appears such a policy route won‘t be taken with Omicron either. That‘s why I was telling you on Monday that any inflation reprieve the scary news buys, would likely turn out only temporary. Unless the Fed decides to make it permanent, which is what I am doubting based on its track record and the more rocky landscape ahead that I talked in mid Nov extensive article. For now, the Fed‘s pressure is real, and premarket rallies that are sold into during regular sessions, must be viewed with suspicion. It‘s not that we‘ve flipped into a (secular) bear market, but the correction is palpable and real – I‘m not looking for the habitual Santa Claus rally this year. Big picture, the precious metals resilience is a good sign, and return of cyclicals with commodities is the all-clear signal that I‘m however not expecting this or next week. Cryptos resilience is encouraging as much as various stock market ratios (XLY:XLP offers a more bullish view than XLF:XLU – I‘ve been covering these helpful metrics quite often through 2020), which makes me think we‘re in mostly sideways markets for now. At least as I told you on Monday, the (rational / irrational) fears started getting ignored by the markets, meaning we‘re on a gradually improving track. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 isn‘t out of the hot water, and it‘s still just a close in the 4670s that would mark the end of peril to me. The financial sector has to turn, strength has to come to smallcaps simultaneously – the 500-strong index is still performing in a too risk-off way. Credit Markets Positive HYG divergence isn‘t enough – the broad underperformance of S&P 500 must be reversed to establish stronger stock market foundations. Powell just added to the risk-off posture in bonds, and I‘m looking keenly at the expected, ensuing (in)ability to absorb less loose monetary conditions. Gold, Silver and Miners Precious metals are acting weak, but not overly weak. When the markets get fed up with having to bear the tapering / tightening (real and verbal) interventions, it would be gold and silver that rise first. Crude Oil Crude oil turned out indeed weakest of the weak when fear overruled everything. Capitulation is a process, and it‘s quite underway already in my view. The way black gold crashed, the way it would rise once the sky meaningfully clears. Copper Copper weakness is what I don‘t trust here as other base metals did quite better. But again, yesterday was an overreaction to the Fed news that it would discuss speeding up taper. Just discuss. Bitcoin and Ethereum Bitcoin and Ethereum holding relatively high ground, is a reason to think the risk-on scales would tip positive. While BTC is still correcting, I‘m looking for it to join Ethereum. Summary S&P 500, risk-on and commodities aren‘t yet on solid footing as Powell pronouncements outweighed the dissipating corona uncertainty. Either way, the effects on inflation would be rather temporary – inflation indicators clearly haven‘t topped yet as the implicit Fed admission of dropping the word temporary confirms. Once the tightening mirage gets a reality check in the economy and markets, look for precious metals to truly shine. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Dec 1, 2021, 10:27 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 1st, 2021

Private Payrolls’ Growth Surpasses November Expectations

Private payrolls in the U.S. grew by 534,000 in November, beating the 506,000 expectations according to payroll processing company ADP on Wednesday. The data shows businesses were successful at hiring staff despite rising concerns about inflation and the fear of a sluggish winter in economic terms. Q3 2021 hedge fund letters, conferences and more Private […] Private payrolls in the U.S. grew by 534,000 in November, beating the 506,000 expectations according to payroll processing company ADP on Wednesday. The data shows businesses were successful at hiring staff despite rising concerns about inflation and the fear of a sluggish winter in economic terms. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Private Payrolls Grow In November As reported by CNBC, private hiring in the U.S. increased by 534,000 last month, well beyond the Dow Jones estimate of 506,000. Despite the slight recovery, “The total was a decline from the October growth of 570,000, which was revised lower by 1,000.” Growth was driven by big companies in terms of size, while sector-wise hospitality and leisure depicted the best figures. The hospitality business –bars, restaurants, and hotels– scored 136,000 new positions for the month within a service sector total of 424,000. Firms with 500 employees or more bagged 277,000 while those with more than 1,000 workers performed very well, contributing 234,000. Medium-sized companies secured 142,000 while those with fewer than 50 employees seized 115,000. “Those also posting strong gains included professional and business services with 110,000, trade transportation and utilities with 78,000, and education and health services, which added 55,000,” CNBC, informs. Labor Market On the private payrolls increase, ADP chief economist Nela Richardson said: “The labor market recovery continued to power through its challenges last month. Service providers, which are more vulnerable to the pandemic, have dominated job gains this year. It’s too early to tell if the Omicron variant could potentially slow the jobs recovery in coming months.” “According to ADP’s count, which can differ substantially from the Labor Department’s official numbers, private job growth has averaged 543,000 for the past three months and 491,000 for all of 2021,” CNBC reports. “The Labor Department’s monthly payrolls report, which includes government jobs, has averaged 529,000 this year.” The Bureau of Labor Statistics will release its November report on Friday, with job growth expectations around 573,000 after the 531,000 reported the previous month. Dow Jones estimates state that the unemployment rate is estimated to tail off to 4.5%. Updated on Dec 1, 2021, 10:32 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkDec 1st, 2021

Feeling The Quickly Changing Pulse

S&P 500 rebound still ran into selling pressure before the close – the bulls lost momentum however well the government and Fed‘s words were received. Credit markets hold the key – specifically, how corporate bonds and Treasuries perform compared to each other. This would be also reflected in the yield spreads, dollar moves, or cylicals […] S&P 500 rebound still ran into selling pressure before the close – the bulls lost momentum however well the government and Fed‘s words were received. Credit markets hold the key – specifically, how corporate bonds and Treasuries perform compared to each other. This would be also reflected in the yield spreads, dollar moves, or cylicals vs. stay-at-home stocks. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Warren Buffett Series in PDF Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Today‘s analysis will be shorter than usually, so let‘s dive into the charts to fulfill my title‘s objective (all charts courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is still far out of the woods, and the bulls have to decidedly repel any selling pressure - a good sign of which would be a close in the 4,670s. Credit Markets As encouraging as the HYG upswing is, it‘s too early to call a budding reversal a done deal. LQD to TLT performance is a good start, which however needs to continue. The worst for the bulls would be renewed rush into Treasuries, sending other parts of the bond market relatively down. Gold, Silver and Miners Precious metals retreated again, but the bullish case is very far from lost. As discussed in the caption, the upswing appears a question of time – gold and silver are ready to turn on soothing language of fresh accomodation. Crude Oil Crude oil upswing left a lot to be desired and as I tweeted yesterday, remains the most vulnerable within commodities. The dust clearly hasn‘t settled yet within energy broadly speaking. Copper Copper held up considerably better than many other commodities, and gives the impression of sideways trading followed by a fresh upswing as having the highest probability to happen next. Bitcoin and Ethereum Bitcoin and Ethereum marching up today, is a positive omen for gradual and picky return of risk-on trades. The overall mood is still one of catious optimism. Summary Friday‘s rout hasn‘t been reversed entirely, and markets remain vulnerable to fresh negative headlines. The degree to which current ones (relatively positive ones, it must be said) helped, is a testament of volatility being apt to return at a moment‘s notice. I‘m certainly not looking for the developments to break inflation‘s back – CPI clearly hasn‘t peaked. Precious metals are well positioned to appreciate when faced with any grim news necessitating fresh monetary or fiscal activism. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Thank you, Monica Kingsley Stock Trading Signals Gold Trading Signals Oil Trading Signals Copper Trading Signals Bitcoin Trading Signals www.monicakingsley.co mk@monicakingsley.co All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice. Updated on Nov 30, 2021, 11:23 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 30th, 2021

The Fed Worries About Inflation. Should We Worry About Gold?

Oops!… Gold did it again and declined below $1,800 last week. What’s happening in the gold market? Q3 2021 hedge fund letters, conferences and more Gold Prices Decline Did you enjoy your roast turkey? I hope so, and I hope that its taste – and Thanksgiving in general – sweetened the recent declines in gold […] Oops!… Gold did it again and declined below $1,800 last week. What’s happening in the gold market? if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Gold Prices Decline Did you enjoy your roast turkey? I hope so, and I hope that its taste – and Thanksgiving in general – sweetened the recent declines in gold prices. As the chart below shows, the price of the yellow metal (London P.M. Fix) plunged from above $1,860 two weeks ago to above $1,780 last week. It has slightly rebounded since then, but, well, only slightly. What exactly happened? Funny thing, but actually nothing revolutionary. After all, the reappointment of the same man as the Fed Chair and the publication of the FOMC minutes from the meeting that had already took place earlier in November, were the highlights before Thanksgiving. Well, sometimes lack of changes is a change itself and information about the past can shed some light on the future. Let’s start from Powell’s renomination for the second term as the Federal Reserve chair. In response, the market bets that the Fed will hike interest rates more aggressively in 2022 have increased. At first glance, the strong investors’ reaction seems strange, given that the monetary policy shouldn’t radically change with Powell still at the helm. However, the continuation of Powell’s leadership implies that Lael Brainard, regarded as more dovish than Powell, won’t become the new Fed Chair – what was expected by some market participants. Hence, the dovish scenario won’t materialize, which is hawkish for gold. Just two days later, the FOMC revealed the minutes from its November meeting. The main message – the Fed decided to taper its quantitative easing – was, of course, included in the post-meeting statement. The minutes revealed, however, that the Fed officials had become more worried about inflation and had expressed a more hawkish stance than the statement suggested. First of all, we learned from the minutes that some central bankers opted for more aggressive tapering and a more flexible approach that would allow for adjustments in the face of high and persistent inflation: Some participants preferred a somewhat faster pace of reductions that would result in an earlier conclusion to net purchases (…). Some participants suggested that reducing the pace of net asset purchases by more than $15 billion each month could be warranted so that the Committee would be in a better position to make adjustments to the target range for the federal funds rate, particularly in light of inflation pressures. Various participants noted that the Committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the Committee's objectives (…) participants noted that the Committee would not hesitate to take appropriate actions to address inflation pressures that posed risks to its longer-run price stability and employment objectives. This is because the FOMC members’ concerns about inflation strengthened. As we can read in the minutes, They indicated that their uncertainty regarding this assessment had increased. Many participants pointed to considerations that might suggest that elevated inflation could prove more persistent. These participants noted that average inflation already exceeded 2 percent when measured on a multiyear basis and cited a number of factors—such as businesses' enhanced scope to pass on higher costs to their customers, the possibility that nominal wage growth had become more sensitive to labor market pressures, or accommodative financial conditions—that might result in inflation continuing at elevated levels. Last but not least, the Fed officials also made other hawkish comments. Some participants argued that labor force participation would be lower than before the pandemic because of structural reasons. It implies that we are closer to reaching the “full employment”, so monetary policy could be less accommodative. What’s more, “some participants highlighted the fact that price increases had become more widespread”, while a couple of them noted possible signs that inflation expectations had become less anchored. So, the Fed officials’ worries about inflation strengthened. Implications for Gold What does it all imply for the gold market? Well, both the reappointment of Powell as the Fed Chair and the latest FOMC minutes were interpreted as hawkish, which pushed gold prices down. The more upbeat prospects for monetary tightening are clearly negative for the yellow metal, as they boosted the bond yields (see the chart below). This is something I warned investors against earlier this month. I wrote in the Fundamental Gold Report on November 16 that “when something reaches the bottom, it should rebound later. And if real interest rates start to rally, then gold could struggle again.” This is exactly what happened. Later, in the article on November 18, I added that “I will feel more confident about the strength of the recent rally when gold rises above $1,900”. Well, gold failed to do this, so I’m not particularly bullish on gold right now. We could say that gold did it again: it played with the hearts of gold bulls but got lost in the game, as it didn’t resist the pressure. Yes, the new Omicron variant of coronavirus has been noted, and uncertainty about this strain could provide short-term support for the yellow metal. However, it seems that the prospects of monetary tightening and higher real interest rates will continue to put downward pressure on gold prices. I agree, the rally looked refreshing after months of disappointment. However, it seems that we have to wait longer, possibly for the start of the Fed’s increasing the interest rates, to see gold truly shining. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care Updated on Nov 30, 2021, 11:57 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 30th, 2021

Covid Woes And Supply Chain Issues Among The Drivers In FTSE Reshuffle

The FTSE All Share Index Quarterly Review is based on closing prices today and is due to be announced on Wednesday 1 December, with the changes effective after the close on Friday 17 December. Q3 2021 hedge fund letters, conferences and more A sparky performance by Electrocomponents pushes it into a prime position to move into […] The FTSE All Share Index Quarterly Review is based on closing prices today and is due to be announced on Wednesday 1 December, with the changes effective after the close on Friday 17 December. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Walter Schloss Series in PDF Get the entire 10-part series on Walter Schloss in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues. (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more A sparky performance by Electrocomponents pushes it into a prime position to move into the FTSE 100. Dechra pharma, another FTSE 100 contender has clawed opportunity from the soaring popularity for pets. Cyber Security firm DarkTrace set to slip out of the FTSE 100 following a share slide as the lock-in IPO period ended. Johnson Matthey’s position in the FTSE 100 looks shaky after it abandoned its battery plans. Supply chain issues plague electrical retailer AO World as it looks set to slide from FTSE 250. Petershill Partners eyes up a FTSE 250 position and fresh acquisitions of private equity assets. Fresh Covid woes hit The Restaurant Group as it looks set to slide out of the FTSE 250. Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown summarises the runners and riders: Electrocomponents – Contender To Enter The FTSE 100 "The sparky performance by Electrocomponents plc (LON:ECM), with adjusted pre-tax profits up 91% for the first half of the year, has led to a surge in its share price, pushing it into a prime position to move into FTSE 100 territory. The vast range of industrial and electronics products held by the distributor is partly behind its success, as well as its smooth online operations fulfilling the lucrative business-to-business segment. It’s not been immune from higher transport and labour costs, and global supply chain issues, but it appears to have deftly managed its inventory and kept margins intact. Although there are likely to be further cost pressures ahead, Electrocomponents appears in a robust position, particularly given that demand for electrical parts shows little sign of waning." Dechra Pharma - Contender To Enter The FTSE 100 "Dechra Pharmaceuticals plc (LON:DPH) has clawed opportunity from the soaring popularity for pets during the pandemic. Its share price has bounded upwards and it is a prime contender to take a walk into the FTSE 100. With so many more people working from home, it’s been an ideal opportunity to settle in a new furry friend and Dechra is in the business of keeping them healthy throughout their lifetimes. Demand for the pharmaceutical company’s veterinary products has been strong, with full year results showing pre-tax profits almost doubling. There is a risk that with incomes facing a squeeze from rising inflation, spending per head could decline, so there could be headwinds to navigate. But other results from pet orientated companies indicate that demand for pets doesn’t seem to be falling away, which bodes well for future revenues streams." Darktrace – Likely To Be Demoted From The FTSE 100 "Cyber security firm Darktrace PLC (LON:DARK) made a stealthy entry into the top-flight at the last reshuffle, but it’s a leading contender to leave the blue chip index given that shares have fallen by 52% since reaching a record high in September. This appears to be down to the end of the lock-up period following its IPO, with big chunks of new shares flooding the market prompting the falls. Darktrace is not alone in being a former IPO darling, now experiencing the pain of a rapid deceleration in its share price. Its successful launch in the spring was seen as a coup for the London market, and if it exits the top-flight it will leave a big tech gap in the FTSE 100. However, given ongoing growth reported by the company and some pretty upbeat trading updates, it may not stay outside the top-flight for long.  There is growing demand for sophisticated technology to counter the growing armies of cyber criminals and Darktrace uses AI to scan regular business operations and detect tiny irregularities, providing an early warning system of cyber-attacks. The ongoing shift to digital is likely to keep opening up new opportunities and markets for Darktrace as firms scale up their operations to meet demand, whilst trying to ensure their systems stay secure." Johnson Matthey – Likely To Be Demoted From The FTSE 100 "Investors are clearly worried about Johnson Matthey PLC (LON:JMAT)’s strategy for the future and amid this uncertainty, the company risks sliding out of the FTSE 100. The engineering company’s decision to abandon plans to become a battery supplier by selling off its eLNO business saw shares slide, because this appeared to be JMAT’s answer to the shift towards electric vehicles and away from combustion engines, for which it makes catalytic converters. Management says it will focus on other potential growth avenues, but ultimately the group will be starting from scratch as it looks for new opportunities alongside the new greener auto industry. Although catalytic converters won’t be rendered obsolete immediately, the clock is ticking and as the transition to electric vehicles speeds up, Johnson Matthey will need to quickly find a new sense of direction." AO World – Likely To Be Demoted From The FTSE 250 "Online electrical retailer AO World PLC (LON:AO) was well set up to capitalise on the accelerated shift to e-commerce during the first stages of the pandemic, with profits soaring as demand for white goods and IT equipment bounded higher. But the company has come down to earth with a bump, falling to a £10 million half year loss, sending shares plummeting, and this dramatic reversal of fortunes is likely to see it kicked out of the FTSE 250. Its rapid growth seems to have been part of the problem, given that it hasn’t had as much time to build up deep relationships with suppliers, so when the supply crunch hit for electrical goods, it was lower down on the list of priorities. Higher labour and transport costs exacerbated by the shortage of drivers have also dented margins, given that it’s so reliant on its delivery network to make sales and provide after care. A quick turnaround is unlikely given that the company has warned that the crucial Christmas trading period will be tough, with supply chain issues lingering, so AO World may find it hard to climb back up the ladder into FTSE 250 territory for some time." The Restaurant Group – Likely To Be Demoted From The FTSE 250 "As fears about the Omicron variant swirl, there are fresh concerns that restrictions could be tightened on hospitality firms and The Restaurant Group PLC (LON:RTN) hasn’t escaped this fresh round of volatility. Although shares are up marginally today, they have fallen by 35% over the past month as investors worry that despite a big round of cost cutting and the slimming down of its restaurant footprint, a big bounce back in fortunes remains elusive.  Although its star brand Wagamama is dishing out fast food as fast as it can make it to crowds queuing outside restaurants or ordering in from home, its airport concessions arm has struggled with a 53% fall in like-for-like sales at the last quarterly reading, as tourism has been slow to recover. Like many other firms in the sector the company is also facing the challenges of higher costs and wage pressures, amid a shortage of staff and those problems look set to linger." Provident Financial - Contender For The FTSE 250 "Provident Financial plc (LON:PFG), the sub-prime firm known for specialising in credit cards, online loans and consumer car finance is likely to gain a foothold in the FTSE 250 after its valuation recovered as it’s pivoted the business. The company called time on its doorstep lending business earlier this year as part of its attempt to climb out of a financial black hole, after being forced to pay compensation for mis-selling its products. Shifting its business model away from riskier high interest loans towards a mid-cost credit model is now more of a focus for the company and it’s a direction of travel investors have embraced. Although the shine has come off the share price in recent days, which may be partly due to fears that if the new variant leads to another downturn, the potential for bad loans could increase, shares are still up by 41% over the past six months." Petershill Partners – Contender For The FTSE 250 "Petershill Partners PLC (LON:PHLL) only started trading on the London Stock Exchange in September but already it’s a leading contender to step into the FTSE 250. Petershill owns minority stakes in a range of alternative asset managers such as venture capital firms and private equity companies, many of which had been managed by Goldman Sachs for a decade or more.  Assets under management at the investment firm increased by 8% in the third quarter, and it has its eye on fresh prizes with new acquisitions being sized up. Petershill has capitalised on the hunger for private equity investments in an era of ultra-low rates, enabling firms to borrow cheaply to finance takeovers.  With an increase in interest rates looming there is a risk that appetite for such assets may wane, and that might partly account for a slight nudging downwards in the share price over the past month." About Hargreaves Lansdown Over 1.67 million clients trust us with £138.0 billion (as at 30 September 2021), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month. Updated on Nov 30, 2021, 12:19 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 30th, 2021

The Fed Put Is Still Very Much In Place

In his Daily Market Notes report to investors, while commenting on the Fed put, Louis Navellier wrote: Q3 2021 hedge fund letters, conferences and more Omicron owns the headlines today. Will it make the Fed (Jerome Powell speaks to the Senate Banking Committee this morning) change their tapering plans? Will it slow down holiday mall […] In his Daily Market Notes report to investors, while commenting on the Fed put, Louis Navellier wrote: if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles .af-body.af-standards input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Omicron owns the headlines today. Will it make the Fed (Jerome Powell speaks to the Senate Banking Committee this morning) change their tapering plans? Will it slow down holiday mall traffic?  Will it postpone travel plans?  Will it subdue reopening momentum significantly? Will people project that this might be the first of a long series of breakthrough variants and alter long-term plans? Mind The Treasury Yields While all this sounds a bit extreme, one only need look at the deep drop in US Treasury yields - the biggest market in the world - in the face of well-known inflation generating material negative yields to see that the market is very concerned by the Omicron development. In the trenches, the pullback in Treasury yields and fears of potential lockdowns finds tech in the green since the pre-Omicron November 24th, while Industrials, Energy, and especially Banks have been hit hard, down in the mid-single digits. This is clearly postponing the seasonal melt-up many people were positioned for, but hopefully will not cancel it. If by this time next week the medical gurus have concluded that existing vaccines are "sufficient" and/or the Omicron virulence is milder than the current Delta variant, the market should bounce strongly.  Conclusions the other way could weigh heavily on the current bullish outlook for 2022. Fed Put In Place Such uncertainty will likely push some people to the sidelines who want to lock in the strong gains they've already booked for 2021. In the big picture the Fed "put" (support) is still very much there as is fiscal support from Congress waiting in the wings, if needed. Unless Omicron turns out to be a very nasty variant, this will soon be seen as a buying opportunity, and desensitize investors to the inevitable occurrence of future variants. Overall, markets always tend to react first and research second, so they panic from time to time. Anytime there is an abrupt market sell-off like this, I go to Morningstar.com and check the ETF spreads to see if they have widened relative to their Intraday Indicative Value. Sure enough, there was an abnormally wide ETF spread after the opening on Friday for iShares Select Dividend ETF (DVY), the bellwether ETF that I usually check first, since it is the ETF that abruptly fell almost 35% intraday back in August 2015 during a “flash crash.” The good news is that even though the ETF spread widened for DVY on Friday, trading in the ETF appeared orderly, so I do not think there is any imminent risk of another flash crash. Reaction vs Research Another overreaction has been in energy. With new travel restrictions, oil use will be down, but the Biden Administration, as well as Britain, Japan, India, and South Korea, have all followed China by releasing crude oil from their strategic reserves in a coordinated attempt to push down crude oil prices. The White House said, “The president stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic.” But much of Europe is locking down again, so demand should moderate soon. In the meantime, Americans are spending up a storm with all the money that the Fed has pumped into the system. Black Friday deals are everywhere, and retailers are expected to remain super-aggressive with promotions through Cyber Monday. As a result, I am expecting a very strong holiday shopping season. Heard & Notable An animal shelter in Los Angeles is applying astrological traits to its dogs in the hopes of matching them with a compatible human, increasing foster applications submitted to the shelter by 120%. The dogs are assigned a star sign based off their personalities. Source: Reuters Updated on Nov 30, 2021, 2:18 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 30th, 2021