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2021-03-23

What a shill

Why AMC, GameStop, and Sundial Are 3 of the Worst Stocks to Buy

2021-03-20

...

Fed Disappoints Market, Lets SLR Relief Expire: What Happens Next

2021-03-16

Thanks

How To Spot A Bubble

2021-03-15

Fubo ftw

Toplines Before US Market Open on Monday

2021-03-15

Seriously?

‘There will be no peace’ until 10-year Treasury yield hits 2%, strategist says

2021-03-12

Nice

Tencent and Baidu Fined by Antitrust Regulator For Previous Deals

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{"i18n":{"language":"en_US"},"userPageInfo":{"id":"3577588192452574","uuid":"3577588192452574","gmtCreate":1614579070261,"gmtModify":1614579070261,"name":"RyanKei212","pinyin":"ryankei212","introduction":"","introductionEn":null,"signature":"","avatar":"https://static.laohu8.com/default-avatar.jpg","hat":null,"hatId":null,"hatName":null,"vip":1,"status":2,"fanSize":0,"headSize":128,"tweetSize":9,"questionSize":0,"limitLevel":999,"accountStatus":4,"level":{"id":0,"name":"","nameTw":"","represent":"","factor":"","iconColor":"","bgColor":""},"themeCounts":0,"badgeCounts":0,"badges":[],"moderator":false,"superModerator":false,"manageSymbols":null,"badgeLevel":null,"boolIsFan":false,"boolIsHead":false,"favoriteSize":0,"symbols":null,"coverImage":null,"realNameVerified":"success","userBadges":[{"badgeId":"1026c425416b44e0aac28c11a0848493-1","templateUuid":"1026c425416b44e0aac28c11a0848493","name":"Debut Tiger","description":"Join the tiger community for 500 days","bigImgUrl":"https://static.tigerbbs.com/0e4d0ca1da0456dc7894c946d44bf9ab","smallImgUrl":"https://static.tigerbbs.com/0f2f65e8ce4cfaae8db2bea9b127f58b","grayImgUrl":"https://static.tigerbbs.com/c5948a31b6edf154422335b265235809","redirectLinkEnabled":0,"redirectLink":null,"hasAllocated":1,"isWearing":0,"stamp":null,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2022.09.13","exceedPercentage":null,"individualDisplayEnabled":0,"backgroundColor":null,"fontColor":null,"individualDisplaySort":0,"categoryType":1001},{"badgeId":"a83d7582f45846ffbccbce770ce65d84-1","templateUuid":"a83d7582f45846ffbccbce770ce65d84","name":"Real Trader","description":"Completed a transaction","bigImgUrl":"https://static.tigerbbs.com/2e08a1cc2087a1de93402c2c290fa65b","smallImgUrl":"https://static.tigerbbs.com/4504a6397ce1137932d56e5f4ce27166","grayImgUrl":"https://static.tigerbbs.com/4b22c79415b4cd6e3d8ebc4a0fa32604","redirectLinkEnabled":0,"redirectLink":null,"hasAllocated":1,"isWearing":0,"stamp":null,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2021.12.21","exceedPercentage":null,"individualDisplayEnabled":0,"backgroundColor":null,"fontColor":null,"individualDisplaySort":0,"categoryType":1100}],"userBadgeCount":2,"currentWearingBadge":null,"individualDisplayBadges":null,"crmLevel":1,"crmLevelSwitch":0,"location":null,"starInvestorFollowerNum":0,"starInvestorFlag":false,"starInvestorOrderShareNum":0,"subscribeStarInvestorNum":0,"ror":null,"winRationPercentage":null,"showRor":false,"investmentPhilosophy":null,"starInvestorSubscribeFlag":false},"baikeInfo":{},"tab":"post","tweets":[{"id":353310017,"gmtCreate":1616460526239,"gmtModify":1704794347428,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"What a shill","listText":"What a shill","text":"What a shill","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/353310017","repostId":"2121120348","repostType":4,"repost":{"id":"2121120348","kind":"news","pubTimestamp":1616427011,"share":"https://ttm.financial/m/news/2121120348?lang=&edition=fundamental","pubTime":"2021-03-22 23:30","market":"us","language":"en","title":"Why AMC, GameStop, and Sundial Are 3 of the Worst Stocks to Buy","url":"https://stock-news.laohu8.com/highlight/detail?id=2121120348","media":"Motley Fool ","summary":"Don't let the Reddit frenzy lure you into buying terrible businesses.","content":"<p>Don't let the Reddit frenzy lure you into buying terrible businesses.</p>\n<p>Whether you're a relatively new investor or someone who's been putting your money to work in the market for five decades, there's always something new or unforeseen happening that keeps things interesting.</p>\n<p>In 2021, it's been the rise of the Reddit trader.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/77f6df9d5cb2415372006deee1d65d6d\" tg-width=\"2000\" tg-height=\"1333\"><span>Image source: Getty Images.</span></p>\n<p>Beginning in mid-January, retail investors -- mostly millennials who are relatively new to investing -- on Reddit's WallStreetBets (WSB) community chatroom began banding together to buy shares and out-of-the-money call options in highly short-sold stocks. Short-sellers are investors who are betting against a stock and hoping for its share price to decline. Since gains are capped at 100% while losses are unlimited, short-sellers tend not to stick around if a stock begins to gain a lot of upside momentum.</p>\n<p>Reddit's WSB community was able to effect short squeezes in dozens of short-sold stocks. In order for short-sellers to exit their positions, they must buy to cover. Buying stock only exacerbates the runaway train effect to the upside.</p>\n<p>Since mid-January, movie theater chain&nbsp;<b>AMC Entertainment</b> (NYSE:AMC), video game and accessories retailer&nbsp;<b>GameStop</b> (NYSE:GME), and Canadian marijuana stock&nbsp;<b>Sundial Growers</b> (NASDAQ:SNDL) have been the three most-popular plays of Reddit's retail investors. Unfortunately, they're also three of the worst stocks money can buy.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/bee505c562dafe3e29f86496a282e43d\" tg-width=\"700\" tg-height=\"470\"><span>Image source: Getty Images.</span></p>\n<p><b>Here's why it could be lights-out for AMC</b></p>\n<p>AMC's popularity has to do with its perceived-to-be low share price, as well as the reopening of 99% of its theaters by March 26, according to the company. As many folks have also pointed out to me on social media, technical analysis (i.e., chart patterns) is also driving interest.</p>\n<p>However, none of these catalysts offers true substance.</p>\n<p>For instance, AMC Entertainment was on the verge of bankruptcy in mid-January, and was ultimately saved by issuing close to 165 million new shares of stock and taking on over $400 million in debt capital. The company may have more than $1 billion in cash on hand now, but it's facing aggregate operating losses over the next two years that, by Wall Street's consensus, will come in around a median of $1.7 billion. This is a fancy way of saying that AMC Entertainment almost certainly doesn't have enough cash to make it through the next 12-to-24 months, based on projected losses.</p>\n<p>Another thing to keep in mind is that AMC's theaters reopening doesn't mean things are back to normal. A vast majority of its theaters will be operating at limited capacity, and there's always the possibility that coronavirus variants lead to certain cities, counties, or states scaling back their reopening plans.</p>\n<p>But maybe the biggest slap in the face for shareholders is that AMC executives pocketed $8.3 million in bonuses just a month after stepping back from the bankruptcy ledge for their \"extraordinary efforts\" to keep AMC afloat during these challenging times.</p>\n<p>If you still need <a href=\"https://laohu8.com/S/AONE\">one</a> more damning reason to avoid AMC like the plague, here it is: The model is being disrupted. Both&nbsp;<b>AT&amp;T</b>'s WarnerMedia and&nbsp;<b>Walt Disney</b>&nbsp;are releasing new movies in 2021 on their respective streaming platforms (HBO Max and Disney+) the same day they'll hit theaters. The growth heyday for movie chains is over, and so are AMC's chances for success, in my view.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4cd041c3c1a321e640648ee5c35dd06e\" tg-width=\"700\" tg-height=\"466\"><span>Image source: Getty Images.</span></p>\n<p><b>Game over for GameStop?</b></p>\n<p>Even though it's the stock that began the Reddit frenzy, GameStop is not a company that any investors should desire to own at its current valuation.</p>\n<p>The primary buy thesis for GameStop has been its high level of short interest. When the short squeeze began in mid-January, the company's short interest, relative to float, was by far the highest on Wall Street. It's come down substantially since then, but GameStop's share price has not.</p>\n<p>If I could grasp at straws and perhaps find <a href=\"https://laohu8.com/S/AONE.U\">one</a> shred of good news to share, it's that the company's e-commerce sales have been soaring of late. During the 2020 holiday season, digital gaming sales rose by 309%. But here's the kicker: Even with a more-than-quadrupling in e-commerce sales, total sales during the holiday season still declined by 3.1%. That's primarily because GameStop shuttered 11% of its stores between the 2019 and 2020 holiday seasons.</p>\n<p>The plain-as-day issue here is that GameStop waited far too long to shift its operating focus to digital gaming. With fewer people trading in or buying used games, which used to be GameStop's high-margin, bread-and-butter growth driver, GameStop's only recourse is to attempt to backpedal its way back into the profit column. This means closing hundreds of stores annually to reduce expenses. But in spite of these precipitous closures, GameStop is likely looking at its fourth-consecutive annual loss in 2021.</p>\n<p>While it may not be game over for GameStop, the company's glory days are long gone. Its market cap today is roughly two times higher than its previous all-time high set back in 2007. The thing is, revenue has gone nowhere, and the company has pushed from recurring profits to ongoing losses. There's no way to logically justify this valuation.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/084d89ada48e3614d1b0f7ca9fd0aa9c\" tg-width=\"700\" tg-height=\"467\"><span>Image source: Getty Images.</span></p>\n<p><b>Sundial might go up in smoke</b></p>\n<p>Finally, there's Sundial Growers, which I believe is the worst marijuana stock money can buy.</p>\n<p>Similar to GameStop and AMC, Sundial has been buoyed by the Reddit crowd for its high short interest and the lure of its penny stock share price. Canadian pot stocks have also received a boost following the election of Joe Biden as President and Democrats retaking the Senate by the slimmest of majorities. There's hope that cannabis legalization in the U.S. would allow Canadian players like Sundial to enter the more lucrative U.S. market.</p>\n<p>But if there's one thing tenured investors are acutely familiar with, it's that next-big-thing investments always have losers. Sundial looks like one of those losing investment.</p>\n<p>To begin with, Sundial just might be the worst share-based diluter I've seen in years. Since the end of September, Sundial has boosted its cash on hand to $719 million Canadian, but has done so by issuing more than 1.15 billion shares (yes, with a 'b') through a combination of direct share offerings, debt-to-equity swaps, and at-the-market issuances. Were this not enough, its board approved another $1 billion (that's U.S.) mixed-shelf offering. In theory, Sundial could issue hundreds of millions of additional shares.</p>\n<p>Because of its 1.66 billion outstanding shares, Sundial has virtually no chance of ever generating a meaningful per-share profit, and it probably runs the risk of being delisted if it falls back below $1 a share. Sundial could enact a reverse split to bump up its share price and shrink its outstanding share count, but companies that utilize reverse splits are historically viewed as struggling businesses.</p>\n<p>What's more, Sundial isn't anywhere near profitability, and investors are paying close to $1.9 billion for it, excluding cash. That's close to 38 times sales for a company that's lagging the vast majority of its Canadian and U.S. peers.</p>\n<p>AMC, GameStop, and Sundial might be today's buzzy stocks, but they lack substance and have little long-term staying power. That makes all three terrible buys.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why AMC, GameStop, and Sundial Are 3 of the Worst Stocks to Buy</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy AMC, GameStop, and Sundial Are 3 of the Worst Stocks to Buy\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-22 23:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/03/22/amc-gamestop-and-sundial-3-of-worst-stocks-to-buy/><strong>Motley Fool </strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Don't let the Reddit frenzy lure you into buying terrible businesses.\nWhether you're a relatively new investor or someone who's been putting your money to work in the market for five decades, there's ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/03/22/amc-gamestop-and-sundial-3-of-worst-stocks-to-buy/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"GME":"游戏驿站","AMC":"AMC院线","SNDL":"SNDL Inc."},"source_url":"https://www.fool.com/investing/2021/03/22/amc-gamestop-and-sundial-3-of-worst-stocks-to-buy/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2121120348","content_text":"Don't let the Reddit frenzy lure you into buying terrible businesses.\nWhether you're a relatively new investor or someone who's been putting your money to work in the market for five decades, there's always something new or unforeseen happening that keeps things interesting.\nIn 2021, it's been the rise of the Reddit trader.\nImage source: Getty Images.\nBeginning in mid-January, retail investors -- mostly millennials who are relatively new to investing -- on Reddit's WallStreetBets (WSB) community chatroom began banding together to buy shares and out-of-the-money call options in highly short-sold stocks. Short-sellers are investors who are betting against a stock and hoping for its share price to decline. Since gains are capped at 100% while losses are unlimited, short-sellers tend not to stick around if a stock begins to gain a lot of upside momentum.\nReddit's WSB community was able to effect short squeezes in dozens of short-sold stocks. In order for short-sellers to exit their positions, they must buy to cover. Buying stock only exacerbates the runaway train effect to the upside.\nSince mid-January, movie theater chain AMC Entertainment (NYSE:AMC), video game and accessories retailer GameStop (NYSE:GME), and Canadian marijuana stock Sundial Growers (NASDAQ:SNDL) have been the three most-popular plays of Reddit's retail investors. Unfortunately, they're also three of the worst stocks money can buy.\nImage source: Getty Images.\nHere's why it could be lights-out for AMC\nAMC's popularity has to do with its perceived-to-be low share price, as well as the reopening of 99% of its theaters by March 26, according to the company. As many folks have also pointed out to me on social media, technical analysis (i.e., chart patterns) is also driving interest.\nHowever, none of these catalysts offers true substance.\nFor instance, AMC Entertainment was on the verge of bankruptcy in mid-January, and was ultimately saved by issuing close to 165 million new shares of stock and taking on over $400 million in debt capital. The company may have more than $1 billion in cash on hand now, but it's facing aggregate operating losses over the next two years that, by Wall Street's consensus, will come in around a median of $1.7 billion. This is a fancy way of saying that AMC Entertainment almost certainly doesn't have enough cash to make it through the next 12-to-24 months, based on projected losses.\nAnother thing to keep in mind is that AMC's theaters reopening doesn't mean things are back to normal. A vast majority of its theaters will be operating at limited capacity, and there's always the possibility that coronavirus variants lead to certain cities, counties, or states scaling back their reopening plans.\nBut maybe the biggest slap in the face for shareholders is that AMC executives pocketed $8.3 million in bonuses just a month after stepping back from the bankruptcy ledge for their \"extraordinary efforts\" to keep AMC afloat during these challenging times.\nIf you still need one more damning reason to avoid AMC like the plague, here it is: The model is being disrupted. Both AT&T's WarnerMedia and Walt Disney are releasing new movies in 2021 on their respective streaming platforms (HBO Max and Disney+) the same day they'll hit theaters. The growth heyday for movie chains is over, and so are AMC's chances for success, in my view.\nImage source: Getty Images.\nGame over for GameStop?\nEven though it's the stock that began the Reddit frenzy, GameStop is not a company that any investors should desire to own at its current valuation.\nThe primary buy thesis for GameStop has been its high level of short interest. When the short squeeze began in mid-January, the company's short interest, relative to float, was by far the highest on Wall Street. It's come down substantially since then, but GameStop's share price has not.\nIf I could grasp at straws and perhaps find one shred of good news to share, it's that the company's e-commerce sales have been soaring of late. During the 2020 holiday season, digital gaming sales rose by 309%. But here's the kicker: Even with a more-than-quadrupling in e-commerce sales, total sales during the holiday season still declined by 3.1%. That's primarily because GameStop shuttered 11% of its stores between the 2019 and 2020 holiday seasons.\nThe plain-as-day issue here is that GameStop waited far too long to shift its operating focus to digital gaming. With fewer people trading in or buying used games, which used to be GameStop's high-margin, bread-and-butter growth driver, GameStop's only recourse is to attempt to backpedal its way back into the profit column. This means closing hundreds of stores annually to reduce expenses. But in spite of these precipitous closures, GameStop is likely looking at its fourth-consecutive annual loss in 2021.\nWhile it may not be game over for GameStop, the company's glory days are long gone. Its market cap today is roughly two times higher than its previous all-time high set back in 2007. The thing is, revenue has gone nowhere, and the company has pushed from recurring profits to ongoing losses. There's no way to logically justify this valuation.\nImage source: Getty Images.\nSundial might go up in smoke\nFinally, there's Sundial Growers, which I believe is the worst marijuana stock money can buy.\nSimilar to GameStop and AMC, Sundial has been buoyed by the Reddit crowd for its high short interest and the lure of its penny stock share price. Canadian pot stocks have also received a boost following the election of Joe Biden as President and Democrats retaking the Senate by the slimmest of majorities. There's hope that cannabis legalization in the U.S. would allow Canadian players like Sundial to enter the more lucrative U.S. market.\nBut if there's one thing tenured investors are acutely familiar with, it's that next-big-thing investments always have losers. Sundial looks like one of those losing investment.\nTo begin with, Sundial just might be the worst share-based diluter I've seen in years. Since the end of September, Sundial has boosted its cash on hand to $719 million Canadian, but has done so by issuing more than 1.15 billion shares (yes, with a 'b') through a combination of direct share offerings, debt-to-equity swaps, and at-the-market issuances. Were this not enough, its board approved another $1 billion (that's U.S.) mixed-shelf offering. In theory, Sundial could issue hundreds of millions of additional shares.\nBecause of its 1.66 billion outstanding shares, Sundial has virtually no chance of ever generating a meaningful per-share profit, and it probably runs the risk of being delisted if it falls back below $1 a share. Sundial could enact a reverse split to bump up its share price and shrink its outstanding share count, but companies that utilize reverse splits are historically viewed as struggling businesses.\nWhat's more, Sundial isn't anywhere near profitability, and investors are paying close to $1.9 billion for it, excluding cash. That's close to 38 times sales for a company that's lagging the vast majority of its Canadian and U.S. peers.\nAMC, GameStop, and Sundial might be today's buzzy stocks, but they lack substance and have little long-term staying power. That makes all three terrible buys.","news_type":1},"isVote":1,"tweetType":1,"viewCount":305,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":350808903,"gmtCreate":1616171321002,"gmtModify":1704791910040,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"...","listText":"...","text":"...","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/350808903","repostId":"1199154789","repostType":4,"repost":{"id":"1199154789","kind":"news","pubTimestamp":1616164372,"share":"https://ttm.financial/m/news/1199154789?lang=&edition=fundamental","pubTime":"2021-03-19 22:32","market":"us","language":"en","title":"Fed Disappoints Market, Lets SLR Relief Expire: What Happens Next","url":"https://stock-news.laohu8.com/highlight/detail?id=1199154789","media":"zerohedge","summary":"As washinted at, and discussed in depth here,the Fed decided - under political pressure from progressive Democrats such asElizabeth Warren and Sherrod Brown- to let the temporary Supplementary Leverage Ratio  exemption expire as scheduled on March 31, the one year anniversary of the rule change.The federal bank regulatory agencies today announced that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020, will expire as scheduled on ","content":"<p>As washinted at, and discussed in depth here,the Fed decided - under political pressure from progressive Democrats such asElizabeth Warren and Sherrod Brown- to let the temporary Supplementary Leverage Ratio (SLR) exemption expire as scheduled on March 31, the one year anniversary of the rule change.</p><blockquote>The federal bank regulatory agencies today announced that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020, will expire as scheduled on March 31, 2021.The temporary change was made to provide flexibility for depository institutions to provide credit to households and businesses in light of the COVID-19 event.</blockquote><p><img src=\"https://static.tigerbbs.com/b822960da59d651f093b5113cd0c3fd0\" tg-width=\"500\" tg-height=\"319\" referrerpolicy=\"no-referrer\">This outcome is theone (again) correctly predictedby former NY Fed guru Zoltan Pozsar who following the FOMC said that \"the fact that the Fed made this adjustment practically preemptively – the o/n RRP facility is not being used at the moment, so there are no capacity constraints yet, while repo and bill yields aren’t trading negative yet –<b>suggests that the Fed is “foaming the runway” for the end of SLR exemption</b>.\"</p><p>Knowing well this would be a very hot button issue for the market, the Fed published thefollowing statementto ease trader nerves, noting that while the SLR special treatment will expire on March 31, the Fed is \"inviting public comment on several potential SLR modifications\" and furthermore, \"<b>Board may need to address the current design and calibration of the SLR over time to prevent strains from developing that could both constrain economic growth and undermine financial stability</b>\" - in short, if yields spike, the Fed will re-introduce the SLR without delay:</p><blockquote>The Federal Reserve Board on Friday announced that the temporary change to its supplementary leverage ratio, or SLR, for bank holding companies will expire as scheduled on March 31. <b>Additionally, the Board will shortly seek comment on measures to adjust the SLR. The Board will take appropriate actions to assure that any changes to the SLR do not erode the overall strength of bank capital requirements.</b>To ease strains in the Treasury market resulting from the COVID-19 pandemic and to promote lending to households and businesses, the Board temporarily modified the SLR last year to exclude U.S. Treasury securities and central bank reserves. Since that time, the Treasury market has stabilized. <b>However, because of recent growth in the supply of central bank reserves and the issuance of Treasury securities, the Board may need to address the current design and calibration of the SLR over time to prevent strains from developing that could both constrain economic growth and undermine financial stability.To ensure that the SLR—which was established in 2014 as an additional capital requirement—remains effective in an environment of higher reserves, the Board will soon be inviting public comment on several potential SLR modifications.</b>The proposal and comments will contribute to ongoing discussions with the Department of the Treasury and other regulators on future work to ensure the resiliency of the Treasury market.</blockquote><p>The Fed's soothing wods notwithstanding,<b>having been primed for a favorable outcome, the Fed's disappointing announcement was hardly the news traders were hoping for and stocks tumbled...</b></p><p><img src=\"https://static.tigerbbs.com/c341c3843a5031cd1599c2c89e198050\" tg-width=\"500\" tg-height=\"305\" referrerpolicy=\"no-referrer\">Bond yields spiked...</p><p><img src=\"https://static.tigerbbs.com/14173c1ce587fb45efe4c30ecc1dfbab\" tg-width=\"500\" tg-height=\"284\" referrerpolicy=\"no-referrer\">... while the stock of JPM, which is the most exposed bank to SLR relief (as noted yesterday in \"Facing Up To JP Morgan's Leverage Relief Threats\")...</p><p><img src=\"https://static.tigerbbs.com/32811183fba3dbddf1c440836298c7f3\" tg-width=\"500\" tg-height=\"602\" referrerpolicy=\"no-referrer\">.... slumped.</p><p><img src=\"https://static.tigerbbs.com/2fba41463f15e79d2b8436cdd6a526fc\" tg-width=\"500\" tg-height=\"306\" referrerpolicy=\"no-referrer\">In case you've been living under a rock, here's why you should care about the SLR decision: First, for those whomissed our primer on the issue, some background from JPM (ironically the one bank that has the most to lose from the Fed's decision) the bottom line is that without SLR relief,<b>banks may have to delever, raise new capital, halt buybacks, sell preferred stock, turn down deposits and generally push back on reserves (not necessarily all of these, and not in that order) just as the Fed is injecting hundreds of billions of reserves into the market as the Treasury depletes its TGA account.</b></p><blockquote>The massive expansion of the Fed’s balance that has occurred implied an equally massive growth in bank reserves held at Federal Reserve banks. <b>The expiration of the regulatory relief would add ~$2.1tn of leverage exposure across the 8 GSIBs. As well, TGA reduction and continued QE could add another ~$2.35tn of deposits to the system during 2021.</b></blockquote><p><img src=\"https://static.tigerbbs.com/392342c2f3e1dd008b2276172a9b3ecf\" tg-width=\"500\" tg-height=\"253\" referrerpolicy=\"no-referrer\">While the expiry of the carve-out on March 31 would not have an immediate impact on GSIBs, the continued increase in leverage assets throughout the course of the year would increase long-term debt (LTD) and preferred requirements. Here, JPM takes an optimistic view and writes that<b>\"even the “worst” case issuance scenario as very manageable, with LTD needs of $35bn for TLAC requirements and preferred needs of $15-$20bn to maintain the industry-wide SLR at 5.6%.</b></p><p>The constraint is greater at the bank entity, where the capacity to grow leverage exposure to be ~$765bn at 6.2% SLR.\"Goldman's take was more troubling: the bank estimated that under the continued QE regime, there would be a shortfall of some $2 trillion in reserve capacity, mainly in the form of deposits which the banks would be unable to accept as part of ongoing QE (much more in Goldman'sfull take of the SLR quandary).</p><p><b>So what happens next?</b></p><p>Addressing this topic, yesterday Curvature's Scott Skyrm wrote that \"<i>the largest banks are enjoying much larger balance sheets, but there are political factors in Washington that are against an extension of the exemption.... Here are a couple of scenarios and their implications on the Repo market</i>:</p><blockquote>The exemption is extended 3 months or 6 months - No impact on the Repo market. It's already fully priced-in.The exemption is continued for reserves, but ended for Treasurys. <b>Since large banks are the largest cash providers in the Repo market, less cash is intermediated into the market and Repo rates rise. Volatility increases as Repo assets move from the largest banks to the other Repo market participants.The exemption is ended for both reserves and Treasurys. Same as above.</b></blockquote><p>In other words, Skyrm has a relatively downbeat view, warning that \"since large banks are the largest cash providers in the Repo market, less cash is intermediated into the market and Repo rates rise.\" Additionally, volatility is likely to increase as repo assets move from the largest banks to the other Repo market participants...</p><p>Perhaps a bit too draconian? Well, last week, JPMorgan laid out 5 scenarios for SLR, of which two predicted the end of SLR relief on March 31, as follow:</p><blockquote><u><b>3. Relief ends March 31, banks fully raise capital</b></u> <b>Impact on BanksRatesFront-End Rates</b> <u><b>4. Relief ends March 31, banks raise capital &amp; de-lever</b></u> <b>Impact on BanksRatesFront-End Rates</b></blockquote><p>Going back to Zoltan, let's recallthat the repo gurualso cautioned that \"ending the exemption of reserves and Treasuries from the calculation of the SLR may mean that U.S. banks will turn away deposits and reserves on the margin (not Treasuries) to leave more room for market-making activities,<b>and these flows will swell further money funds’ inflows coming from TGA drawdowns.</b>\"</p><p>More importantly, Zoltan does not expect broad chaos in repo or broader markets, and instead provides a more benign view on the negligible impact the SLR has had (and will be if it is eliminated), as he explained in a note from Tuesday.</p><p><img src=\"https://static.tigerbbs.com/caeeb2b1290e084832f29d61cea6a90b\" tg-width=\"500\" tg-height=\"534\" referrerpolicy=\"no-referrer\">How to determine if Zoltan's benign view is correct? He concluded his note by writing that \"given that our call for a zero-to-negative FRA-OIS spread by the end of June was predicated on the end of SLR extension and an assumption that the Fed will try to fix a quantity problem with prices, not quantities, today’s adjustments mean that FRA-OIS won’t trade all the way down to zero or negative territory.\"</p><blockquote>FRA-OIS from here will be a function of how tight FX swaps will trade relative to OIS, but Treasury bills trading at deeply sub-zero rates is no longer a risk...</blockquote><p>While Bills have occasionally dipped into the negative territory on occasion, so far they have avoided a fullblown plunge into NIRP, which may be just the positive sign the market is waiting for to ease the nerves associated with the sudden and largely unexpected end of the SLR exemption.</p><p>* *&nbsp; *</p><p>Finally, for those curious what the immediate market impact will be, NatWest strategist Blake Gwinn writes that the Fed announcement that they’re letting regulatory exemptions for banks expire at the end of the month \"really threads the needle and \"assuages concerns about the potential long-term impact on the markets\" as<b>the SLR \"ends it but defuses a lot of the knee-jerk market reaction” by pledging to address the current design and calibration of the supplementary leverage ratio to prevent strains from developing</b>.</p><p>“I was never worried about a day-one bank puke of Treasuries or drawdown in repo or anything like that on no renewal,” Gwinn said. “My concern was the longer run,” like as reserves continue to rise, would the SLR “become a nuisance and drag on Treasuries and spreads” Gwinn concludes that with the statement, the Fed is<b>\"really speaking to those fears and basically saying, ‘don’t worry, we are on it’.”</b></p><p>Well, with yields spiking to HOD in early quad-witch trading, the market sure seems quite skeptical that the Fed is on anything.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Fed Disappoints Market, Lets SLR Relief Expire: What Happens Next</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; 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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFed Disappoints Market, Lets SLR Relief Expire: What Happens Next\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-19 22:32 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.zerohedge.com/markets/stocks-bopnds-tank-after-fed-lets-slr-relief-expire><strong>zerohedge</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>As washinted at, and discussed in depth here,the Fed decided - under political pressure from progressive Democrats such asElizabeth Warren and Sherrod Brown- to let the temporary Supplementary ...</p>\n\n<a href=\"https://www.zerohedge.com/markets/stocks-bopnds-tank-after-fed-lets-slr-relief-expire\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.zerohedge.com/markets/stocks-bopnds-tank-after-fed-lets-slr-relief-expire","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1199154789","content_text":"As washinted at, and discussed in depth here,the Fed decided - under political pressure from progressive Democrats such asElizabeth Warren and Sherrod Brown- to let the temporary Supplementary Leverage Ratio (SLR) exemption expire as scheduled on March 31, the one year anniversary of the rule change.The federal bank regulatory agencies today announced that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020, will expire as scheduled on March 31, 2021.The temporary change was made to provide flexibility for depository institutions to provide credit to households and businesses in light of the COVID-19 event.This outcome is theone (again) correctly predictedby former NY Fed guru Zoltan Pozsar who following the FOMC said that \"the fact that the Fed made this adjustment practically preemptively – the o/n RRP facility is not being used at the moment, so there are no capacity constraints yet, while repo and bill yields aren’t trading negative yet –suggests that the Fed is “foaming the runway” for the end of SLR exemption.\"Knowing well this would be a very hot button issue for the market, the Fed published thefollowing statementto ease trader nerves, noting that while the SLR special treatment will expire on March 31, the Fed is \"inviting public comment on several potential SLR modifications\" and furthermore, \"Board may need to address the current design and calibration of the SLR over time to prevent strains from developing that could both constrain economic growth and undermine financial stability\" - in short, if yields spike, the Fed will re-introduce the SLR without delay:The Federal Reserve Board on Friday announced that the temporary change to its supplementary leverage ratio, or SLR, for bank holding companies will expire as scheduled on March 31. Additionally, the Board will shortly seek comment on measures to adjust the SLR. The Board will take appropriate actions to assure that any changes to the SLR do not erode the overall strength of bank capital requirements.To ease strains in the Treasury market resulting from the COVID-19 pandemic and to promote lending to households and businesses, the Board temporarily modified the SLR last year to exclude U.S. Treasury securities and central bank reserves. Since that time, the Treasury market has stabilized. However, because of recent growth in the supply of central bank reserves and the issuance of Treasury securities, the Board may need to address the current design and calibration of the SLR over time to prevent strains from developing that could both constrain economic growth and undermine financial stability.To ensure that the SLR—which was established in 2014 as an additional capital requirement—remains effective in an environment of higher reserves, the Board will soon be inviting public comment on several potential SLR modifications.The proposal and comments will contribute to ongoing discussions with the Department of the Treasury and other regulators on future work to ensure the resiliency of the Treasury market.The Fed's soothing wods notwithstanding,having been primed for a favorable outcome, the Fed's disappointing announcement was hardly the news traders were hoping for and stocks tumbled...Bond yields spiked...... while the stock of JPM, which is the most exposed bank to SLR relief (as noted yesterday in \"Facing Up To JP Morgan's Leverage Relief Threats\")....... slumped.In case you've been living under a rock, here's why you should care about the SLR decision: First, for those whomissed our primer on the issue, some background from JPM (ironically the one bank that has the most to lose from the Fed's decision) the bottom line is that without SLR relief,banks may have to delever, raise new capital, halt buybacks, sell preferred stock, turn down deposits and generally push back on reserves (not necessarily all of these, and not in that order) just as the Fed is injecting hundreds of billions of reserves into the market as the Treasury depletes its TGA account.The massive expansion of the Fed’s balance that has occurred implied an equally massive growth in bank reserves held at Federal Reserve banks. The expiration of the regulatory relief would add ~$2.1tn of leverage exposure across the 8 GSIBs. As well, TGA reduction and continued QE could add another ~$2.35tn of deposits to the system during 2021.While the expiry of the carve-out on March 31 would not have an immediate impact on GSIBs, the continued increase in leverage assets throughout the course of the year would increase long-term debt (LTD) and preferred requirements. Here, JPM takes an optimistic view and writes that\"even the “worst” case issuance scenario as very manageable, with LTD needs of $35bn for TLAC requirements and preferred needs of $15-$20bn to maintain the industry-wide SLR at 5.6%.The constraint is greater at the bank entity, where the capacity to grow leverage exposure to be ~$765bn at 6.2% SLR.\"Goldman's take was more troubling: the bank estimated that under the continued QE regime, there would be a shortfall of some $2 trillion in reserve capacity, mainly in the form of deposits which the banks would be unable to accept as part of ongoing QE (much more in Goldman'sfull take of the SLR quandary).So what happens next?Addressing this topic, yesterday Curvature's Scott Skyrm wrote that \"the largest banks are enjoying much larger balance sheets, but there are political factors in Washington that are against an extension of the exemption.... Here are a couple of scenarios and their implications on the Repo market:The exemption is extended 3 months or 6 months - No impact on the Repo market. It's already fully priced-in.The exemption is continued for reserves, but ended for Treasurys. Since large banks are the largest cash providers in the Repo market, less cash is intermediated into the market and Repo rates rise. Volatility increases as Repo assets move from the largest banks to the other Repo market participants.The exemption is ended for both reserves and Treasurys. Same as above.In other words, Skyrm has a relatively downbeat view, warning that \"since large banks are the largest cash providers in the Repo market, less cash is intermediated into the market and Repo rates rise.\" Additionally, volatility is likely to increase as repo assets move from the largest banks to the other Repo market participants...Perhaps a bit too draconian? Well, last week, JPMorgan laid out 5 scenarios for SLR, of which two predicted the end of SLR relief on March 31, as follow:3. Relief ends March 31, banks fully raise capital Impact on BanksRatesFront-End Rates 4. Relief ends March 31, banks raise capital & de-lever Impact on BanksRatesFront-End RatesGoing back to Zoltan, let's recallthat the repo gurualso cautioned that \"ending the exemption of reserves and Treasuries from the calculation of the SLR may mean that U.S. banks will turn away deposits and reserves on the margin (not Treasuries) to leave more room for market-making activities,and these flows will swell further money funds’ inflows coming from TGA drawdowns.\"More importantly, Zoltan does not expect broad chaos in repo or broader markets, and instead provides a more benign view on the negligible impact the SLR has had (and will be if it is eliminated), as he explained in a note from Tuesday.How to determine if Zoltan's benign view is correct? He concluded his note by writing that \"given that our call for a zero-to-negative FRA-OIS spread by the end of June was predicated on the end of SLR extension and an assumption that the Fed will try to fix a quantity problem with prices, not quantities, today’s adjustments mean that FRA-OIS won’t trade all the way down to zero or negative territory.\"FRA-OIS from here will be a function of how tight FX swaps will trade relative to OIS, but Treasury bills trading at deeply sub-zero rates is no longer a risk...While Bills have occasionally dipped into the negative territory on occasion, so far they have avoided a fullblown plunge into NIRP, which may be just the positive sign the market is waiting for to ease the nerves associated with the sudden and largely unexpected end of the SLR exemption.* *  *Finally, for those curious what the immediate market impact will be, NatWest strategist Blake Gwinn writes that the Fed announcement that they’re letting regulatory exemptions for banks expire at the end of the month \"really threads the needle and \"assuages concerns about the potential long-term impact on the markets\" asthe SLR \"ends it but defuses a lot of the knee-jerk market reaction” by pledging to address the current design and calibration of the supplementary leverage ratio to prevent strains from developing.“I was never worried about a day-one bank puke of Treasuries or drawdown in repo or anything like that on no renewal,” Gwinn said. “My concern was the longer run,” like as reserves continue to rise, would the SLR “become a nuisance and drag on Treasuries and spreads” Gwinn concludes that with the statement, the Fed is\"really speaking to those fears and basically saying, ‘don’t worry, we are on it’.”Well, with yields spiking to HOD in early quad-witch trading, the market sure seems quite skeptical that the Fed is on anything.","news_type":1},"isVote":1,"tweetType":1,"viewCount":299,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":325139754,"gmtCreate":1615872827478,"gmtModify":1704787758050,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"Thanks","listText":"Thanks","text":"Thanks","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/325139754","repostId":"1172271196","repostType":4,"repost":{"id":"1172271196","kind":"news","pubTimestamp":1615871336,"share":"https://ttm.financial/m/news/1172271196?lang=&edition=fundamental","pubTime":"2021-03-16 13:08","market":"us","language":"en","title":"How To Spot A Bubble","url":"https://stock-news.laohu8.com/highlight/detail?id=1172271196","media":"Hussman Funds","summary":"Summary\n\nThe defining feature of a bubble is inconsistency between expected returns based on price b","content":"<p><b>Summary</b></p>\n<ul>\n <li>The defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations.</li>\n <li>If we compare our most reliable valuation measures with the valuation measures that one would obtain from a proper long-term discounted cash flow analysis, we find that they're nearly identical.</li>\n <li>One of the unfortunate bits of financial illiteracy that Wall Street has pushed into the heads of investors is the idea that extreme valuations are \"justified\" by low interest rates.</li>\n <li>It's undoubtedly true that profit margins, expected growth, and other factors have an effect on future deliverable cash flows and the valuations that investors place on stocks.</li>\n <li>To understand why extreme valuations imply high volatility, and require extremely long investment horizons, it's useful to consider the concept of \"duration.\"</li>\n</ul>\n<blockquote>\n I can show, really precisely, that there are two warranted prices for a share. The one I prefer is based on such fundamentals as earnings and growth rates, but the bubble is rational in a certain sense. The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.- Nobel Laureate Franco Modigliani, New York Times, March 30, 2000\n</blockquote>\n<p>The word \"bubble\" is tossed around quite a bit in the financial markets, but it's rarely used correctly. See, the thing that defines a bubble isn't that valuations are extremely high, or that expected returns are extremely low. Instead, what defines a bubble is that investors drive valuations higher without simultaneously adjusting expectations for returns lower. That is, investors extrapolate past returns based on price behavior, even though those expectations are inconsistent with the returns that would equate price with discounted cash flows.</p>\n<p>In March 2000, at the height of the technology bubble, I noted: \"Over time, price/revenue ratios come back in line. Currently, that would imply an 83% plunge in tech stocks. If you understand values and market history, you know we're not joking.\" The following month, I discussed Modigliani's quote above, and detailed the dynamics he was describing. The collapse of the 2000 bubble would ultimately erase half the value of the S&amp;P 500, and would take the tech-heavy Nasdaq 100 down an implausibly precise 83%.</p>\n<p>The defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations. If investors pay $150 today for a security that will deliver a single $100 payment a decade from now, but they also fully understand that they'll lose 4% annually on the deal, without extrapolating past gains into the future, then we might say the security is overvalued, and we might question why investors would accept that trade, but we can't call it a bubble.</p>\n<p>But if investors pay $150 today for that security, because they look back in the rear-view mirror, decide that it \"always goes up\" over time, and convince themselves that expected future returns are always positive, then you've got a bubble. Discounting the future $100 cash flow of the security using any positive expected return would produce a price less than $100. So the positive returns expected by investors are inconsistent with the returns that would equate price with discounted cash flows. The size of the bubble is the fraction of the market price that represents expectational \"hot air.\"</p>\n<p>Likewise, the willingness of investors to embrace \"passive investments\" like ETFs and asset-backed securities based on past performance, with little concern about the valuations, yields, or credit risk of the securities inside, is the very soap from which bubbles repeatedly emerge. Amid the current enthusiasm for special purpose acquisition companies (SPACS), investors might recall the bubble in \"incubators\" at the 2000 peak, the \"conglomerates\" of the late-1960s Go-Go bubble, and even the South Sea Company in the early 1700s, along with similar companies formed at the time \"for carrying on an undertaking of great advantage, but nobody to know what it is.\"</p>\n<p>If investors price the S&amp;P 500 at levels that are highly likely to produce negative returns for a decade, as they did in 1929 and 2000, and as I believe they are doing at present, yet investors continue to press stock prices higher on the expectation that they will provide historically normal levels of future return regardless of valuations, then you have the sort of inconsistency that defines a bubble.</p>\n<p>Likewise, if the expected return of a conventional passive investment mix is negative on a 10-12 year horizon (based on reliable valuation measures strongly correlated with actual subsequent returns over a century of market history), yet pension return assumptions remain locked near 7% annually, you've got a bubble, and most likely a future pension funding crisis, on your hands.</p>\n<p>This is how very bad things have repeatedly happened in the financial markets across history, enabled by what Galbraith called \"the extreme brevity of the financial memory.\"</p>\n<p>When Modigliani says that there are two \"warranted\" prices, he means that - at least in the short run - there are two ways that prices can fulfill the expectations of investors. In one case, investors have expectations about future returns, and those expectations are informed by the level of valuations. If prices rise, and expected cash flows haven't changed, investors recognize that future returns will be lower. In the \"bubble\" case, investors have high expectations about future returns, mainly based on past returns, and they act on those expectations by driving prices up further. So the expectation of additional price increases is simply reinforced. \"The expectation of growth produces the growth, which confirms the expectation.\"</p>\n<p>Only one of these prices is consistent, in that the rate of return expected by investors is also the rate of return that equates price with discounted future cash flows. The other price becomes increasingly detached from fundamentals, as a larger and larger fraction of the price represents hot air, and it ultimately collapses as the gap becomes untenably wide.</p>\n<p>During speculative segments of the market cycle, there's nothing that forces investors to recognize that higher valuations imply lower returns, or to change their expectation of high returns as far as the eye can see. That, of course, is why we use measures of market internals to gauge the inclination of investors toward speculation or risk-aversion. Valuation provides an enormous amount of information about likely long-term returns and potential market losses over the complete cycle. But valuation isn't a timing tool. In recent years, it hasn't even imposed a limit on speculative recklessness.</p>\n<p>Still, with each price advance, the actual long-term return implied by future cash flows - what investors will ultimately realize as those cash flows are delivered - collapses further, even while investors act on their delusion that long-term returns have nothing to do with price. Eventually, the bulk of the security price represents a bubble component, not the price that would actually need to exist in order for the long-term expectations of investors to be accurate.</p>\n<p>As I wrote at the 2000 market peak:</p>\n<blockquote>\n \"As long as investors focus on year-to-year returns and not discounted cash flow calculations, the bubble can continue to grow in self-reinforcing fashion. Investors anticipate a high return, and the price behavior reinforces the expectation. The true long-term return becomes increasingly detached from the long-term return imagined by investors, and the bubble component accounts for an increasingly large proportion of the total price.\"\n</blockquote>\n<p>By our most reliable measures, run-of-the-mill historical valuation norms are roughly 70% below current levels. I know you don't want to believe that.</p>\n<p><img src=\"https://static.tigerbbs.com/493c338076df85e2a04ebf892af4762f\" tg-width=\"1280\" tg-height=\"713\"></p>\n<p>The trap door quietly swings open when valuations are extreme and market internals begin to deteriorate. That's the situation we've observed in our measures in recent weeks, with the initial deterioration largely driven by debt securities, but with increasing divergences in equities as well.</p>\n<p><b>Valuations and discounted cash flows</b></p>\n<blockquote>\n Valuations measure the tradeoff between current prices and a very long-term stream of expected future cash flows. Every useful valuation ratio is just shorthand for that calculation. Every valuation ratio that fails that criterion is inferior, and you can show it in historical data.\n</blockquote>\n<blockquote>\n - John P. Hussman, Ph.D., The Meaning of Valuation, December 2019\n</blockquote>\n<p>I've often noted that the denominator of every good valuation measure is just shorthand for the decades and decades of cash flows that the security is likely to deliver in the future. In fact, we always test the validity of the valuation measures we use by examining:</p>\n<p>a) how strongly the resulting valuation measures are correlated with actual subsequent total returns, and;</p>\n<p>b) how closely they replicate an explicit discounted cash flow analysis.</p>\n<p>Below, we'll examine a variety of valuation measures that offer some perspective on why I view the U.S. equity market as a bubble near the breaking point. Along the way, I'll point out some interesting features of valuations and their relationship with subsequent returns. If math gives you hives, feel free to skim over the small amount that I've included here and there.</p>\n<p>Consider first the relationship between valuations and subsequent returns. I'll state the following, which you can prove to yourself by toying around a bit with present value models: the logarithm of a good valuation measure should have an inverse and roughly linear relationship with the expected subsequent investment return.</p>\n<p>Here's a simple example of what this looks like.</p>\n<p><img src=\"https://static.tigerbbs.com/d1e5bdf4391c9c91a8b9a051f6635116\" tg-width=\"819\" tg-height=\"708\"></p>\n<p>Here's what this looks like for MarketCap/GVA, our most reliable stock market valuation measure</p>\n<p><img src=\"https://static.tigerbbs.com/485141919c853722522159d2e9d05e85\" tg-width=\"1280\" tg-height=\"720\"></p>\n<p>During the past three decades, we've studied and introduced a broad range of valuation measures. Most can be calculated back to 1947. Some can be evaluated over a century or more. Across history, even in recent decades, we find that the valuation measures that are best correlated with actual subsequent returns are those with muted sensitivity to cyclical fluctuations in profit margins, and that behave largely like broad, market-wide price/revenue ratios.</p>\n<p>If we compare our most reliable valuation measures with the valuation measures that one would obtain from a proper long-term discounted cash flow analysis, we find that they're nearly identical. Here's what this comparison looks like for the actual stream of dividends (including the impact of repurchases) delivered by the S&amp;P 500 since 1900, discounted at a fixed 10% rate (see the chart text for additional details).</p>\n<p>The reason we use a fixed rate of return is that a multiple of 1.0 is then, by definition, the level at which the S&amp;P 500 would have been priced for that particular level of expected return. Any deviation in the valuation multiple from 1.0 then gauges how far likely future returns are from that \"typical\" expected return. We're currently farther away from \"typical\" expected returns than at any moment in history, including the 1929 and 2000 market peaks.</p>\n<p><img src=\"https://static.tigerbbs.com/e6f61d2794095c2545d0d2c130320e45\" tg-width=\"1280\" tg-height=\"722\"></p>\n<p>One of the unfortunate bits of financial illiteracy that Wall Street has pushed into the heads of investors is the idea that extreme valuations are \"justified\" by low interest rates. Now, it's certainly true that holding future cash flows constant, raising the price of an investment will lower the embedded rate of return, and vice versa. If you pay $32 today for $100 a decade from today, you can expect a 12% annual return. If you pay $82 for the same security, you can expect a 2% annual return. If you pay $100 today, you can expect nothing. So it's clearly true that holding future cash flows constant, a lower rate of return implies a higher level of valuation.</p>\n<p>The reason the statement \"low interest rates justify high valuations\" contributes to financial illiteracy is that the statement has been learned entirely out of context of the arithmetic. As a result, investors seem to imagine that, as long as high valuations can be \"justified,\" stocks can be expected to provide historically normal rates of return in the future. Likewise, investors seem to have no concept that if interest rates are low because growth rates are low, no valuation premium is \"justified\" for stocks, because the lower growth is already sufficient to bring future stock returns down to levels that are commensurate with the low level of interest rates.</p>\n<p>The truth is simple but uncomfortable. If interest rates are low and expected growth is held constant, higher valuations imply lower long-term returns. If interest rates are low because expected future growth is also low, higher valuations are not required. Long-term returns will be lower anyway. A valuation premium just makes future returns even worse.</p>\n<p>Saying that extremely low interest rates \"justify\" extremely high stock valuations is identical to saying that extremely low future returns on bonds \"justify\" extremely low future returns on stocks. I don't really think that's something Wall Street cares to clarify when it tells investors that stock market valuations are \"justified.\"</p>\n<p>Investment valuation is concerned with the relationship between three objects: the current price, the future cash flows, and the rate of return that connects the two like a string. The lower the current price and the higher the future cash flows, the steeper the string. The higher the current price and the lower the future cash flows, the flatter the string. Raise the current price above the future cash flows, and the string will point down instead of up. Given any two of these objects, you can calculate the third one.</p>\n<p>For example, if you want to estimate expected long-term returns, you need two objects: a) the current price and b) the expected stream of future cash flows. A good valuation ratio is just shorthand for those two objects, so you can estimate the long-term return directly from the level of valuation. Then, if you like, you can compare it with the level of interest rates. That comparison can be useful, because even when investors realize that high stock market valuations imply low long-term returns, it's not at all clear that they realize how low long-term return prospects have been driven.</p>\n<p>The chart below shows our estimate of expected 12-year S&amp;P 500 total returns over-and-above Treasury bond yields, across a century of market history. Compare this with the nearly useless drivel that Wall Street passes off as the \"equity risk premium\" (typically quoted as the S&amp;P 500 forward earnings yield minus the 10-year Treasury yield). Yes, you're reading the chart correctly. Given current valuations, we expect the total return of the S&amp;P 500 to underperform the lowly yield on Treasury bonds by roughly -6% annually over the coming 12-year period.</p>\n<p><img src=\"https://static.tigerbbs.com/42561963df9d259a93fe0d4f2502c13e\" tg-width=\"1024\" tg-height=\"577\"></p>\n<p>Many investors confuse the estimation of expected returns (which requires only expected cash flows and the observed price) with a different problem - the estimation of \"fair value.\" See, interest rates come into the picture when you have an expected stream of future cash flows and you want to calculate a \"fair\" current price. In that case, rather than picking an arbitrary rate of return from a hat, it's common to use the level of interest rates, plus some risk premium, as the expected long-term return (or discount rate, or capitalization rate). This sort of calculation can be super-sensitive to arbitrary choices.</p>\n<p>In particular, Wall Street loves to combine super-high growth rates, super-low discount rates, and super-long time horizons, which allows one to calculate a \"fair value\" that's as close to infinity as possible. The thing to remember is that whatever rate of return an analyst embeds into the fair value calculation is also the long-term rate of return you'll earn over time if you pay that price, assuming the future cash flows are delivered as expected.</p>\n<p>Among scores of measures we've evaluated or introduced over time, MarketCap/GVA (nonfinancial market capitalization to corporate gross value-added, including our estimate of foreign revenues) has the highest correlation with actual subsequent 10-12 year S&amp;P 500 total returns, followed by our Margin-Adjusted P/E (MAPE). I find it hilarious that the various valuation measures I've introduced over time are sometimes described as products of \"machine learning,\" \"data mining,\" and \"curve fitting\" when they are, in fact, just different versions of an apples-to-apples economy-wide price/revenue ratio.</p>\n<p><img src=\"https://static.tigerbbs.com/75dac426a3ad2f3830f9dce50f7c0a1c\" tg-width=\"1265\" tg-height=\"712\"></p>\n<p>The S&amp;P 500 price/revenue ratio and nonfinancial market capitalization to GDP (the \"Buffett indicator\") also perform well, and better than earnings-based alternatives like price/forward earnings, the Fed Model, and even the Shiller CAPE. See, while earnings are necessary to generate long-term cash flows, they are also subject to fluctuations in profit margins (both cyclically and even from decade to decade) that turn out to be highly uninformative.</p>\n<p>Economically, fluctuations in profit margins are driven primarily by fluctuations in real unit labor costs. Because companies compete on the basis of realized after-tax profits rather than pre-tax profits, changes in tax policy also have far less durable impact on corporate profits than investors seem to imagine. While corporate profits got a tremendous boost last year from CARES spending (the deficit of one sector always emerges as the surplus of another), here's what the relationship between corporate profits and real unit labor costs looks like historically.</p>\n<p>Real unit labor costs are presented on an inverted left scale. The upward pressure on labor costs (observed as a plunge in the blue line) isn't particularly auspicious for future profits. Still, there's so much distortion in recent quarters that I'd consider the jury to be out on how much of this will be sustained.</p>\n<p><img src=\"https://static.tigerbbs.com/3110e7d3c0468c39d343b20835566bcc\" tg-width=\"1157\" tg-height=\"652\"></p>\n<p>It's undoubtedly true that profit margins, expected growth, and other factors have an effect on future deliverable cash flows and the valuations that investors place on stocks. But even for technology stocks, these assumptions should be made explicit and tested against history. You'll find that observable measures like price/revenue are still very serviceable. In fact, the extreme price/revenue multiples of technology stocks helped to inform my March 2000 projection of an 83% loss in that sector.</p>\n<p>As Benjamin Graham wrote, \"The habit of relating what is paid to what is being offered is an invaluable trait in investment. The more dependent the valuation becomes on anticipations of the future - and the less it is tied to a figure demonstrated by past performance - the more vulnerable it becomes to possible miscalculation and serious error.\"</p>\n<p>The current 5.19 price/revenue multiple for the Nasdaq 100, is the most extreme level since February 2001, which was followed by a 60% loss in the index (after it had already dropped in half). The situation is actually a bit worse than 2001 here. If one examines the largest components of the index, it becomes clear that their annual growth rates have declined substantially over time.</p>\n<p>As a result, a dollar of current revenues should arguably command a smaller multiple than a dollar of revenues might have during earlier periods of emerging growth. Yet even if one takes the Nasdaq 100 price/revenue ratio at face value, and even if one restricts attention to the bubble period since 2000, it's difficult to expect the Nasdaq to produce total returns over the coming decade much better than zero.</p>\n<p><img src=\"https://static.tigerbbs.com/48dd88f74eaed48d53b237b4d0209d8e\" tg-width=\"963\" tg-height=\"542\"></p>\n<p>You don't really want to see what the same chart looks like for the S&amp;P 500.</p>\n<p><img src=\"https://static.tigerbbs.com/24f70ab683592ef20a8c6c75fc9bd1fc\" tg-width=\"963\" tg-height=\"543\"></p>\n<p>The same is true, unfortunately, for passive investment strategies. We presently estimate negative 12-year average annual total returns for a conventional passive investment mix invested 60% in the S&amp;P 500, 30% in Treasury bonds, and 10% in Treasury bills.</p>\n<p>In a 2019&nbsp;white paper, I detailed an approach to estimate a \"value-focused asset allocation\" by jointly considering prevailing stock market valuations and interest rates. It specifies an investment allocation based on which asset class is estimated to have the highest average annual expected return, adjusted for risk, to each point in a long-term investment horizon. That allocation can then be modified by a risk-management component, to adjust the exposure during segments of the market cycle where risk-aversion or speculation among market participants may temporarily drive valuations to depressed or elevated levels. The white paper includes numerous charts showing how this value-focused asset allocation has changed across market history, particularly at important peaks and troughs in the stock and bond markets.</p>\n<p>Along with those methods, I introduced our \"Endowment/spending multiple,\" which estimates the number of years of spending that a passive 60/30/10 investor requires up-front, in order to finance an expected 36-year stream of future inflation-adjusted spending. The idea here is that in a deeply undervalued market with high expected future returns, investors can finance a future stream of spending with far less than they require when valuations are extreme and prospective returns are low.</p>\n<p>You know you're in a bubble when funding a 36-year stream of expected inflation-adjusted spending requires over 38 years of money up-front.</p>\n<p><img src=\"https://static.tigerbbs.com/1adff1ad0dbaa2737f60cb7589d206fb\" tg-width=\"1230\" tg-height=\"693\"></p>\n<p>In the chart below, the Endowment/spending multiple is presented on an inverted log scale (left), along with the actual subsequent average annual total return of a 60/30/10 portfolio mix (right scale). Needless to say, we adhere to investment disciplines that are intended to address problems like this.</p>\n<p><img src=\"https://static.tigerbbs.com/1480e881b4d04ace81a96f31f6368796\" tg-width=\"1229\" tg-height=\"692\"></p>\n<p>As a testament to the breadth of this speculative episode, the median price/revenue ratio of S&amp;P 500 components now exceeds 3.3, easily a record, and extreme enough to provoke distress about the potential losses that innocent but poorly-informed investors may experience over the completion of this cycle.</p>\n<p><img src=\"https://static.tigerbbs.com/ffe0cc33bdaf0695dacb7ae1d817edab\" tg-width=\"1110\" tg-height=\"625\"></p>\n<p>The next chart shows the median price/revenue ratio of S&amp;P 500 components sorted into 10 deciles by valuation. The chart is presented on log scale to allow each line to be compared with its own history. Each segment on the vertical axis represents a doubling of valuations. Notice that every single decile of S&amp;P 500 components is at record valuation extremes. Investors now rely on a permanently high plateau in these extremes.</p>\n<p><img src=\"https://static.tigerbbs.com/cb7c995e64e3c9cba85d6e0fc9124223\" tg-width=\"1280\" tg-height=\"721\"></p>\n<p>It's interesting, but far less important, that the median price/earnings ratio of S&amp;P 500 components has also reached 32.4, the highest level in history. This compares with a median P/E of 19.4 at the 2000 market peak. The problem with P/E multiples, of course, is that they are substantially affected by earnings variability. In fact, prior to the current peak, the highest median P/E for the S&amp;P 500 was actually in March 2002, when the index was down 25% from the March 2000 bubble highs. That's because earnings were down far more by then, which boosted P/E ratios. Such is the danger of taking P/E multiples at face value.</p>\n<p>A crude but reasonably effective way to get around the cyclicality of earnings (but only for very broad indices), is to compare prices to the highest level of earnings achieved to-date. I introduced this metric back in 1998 as the price-to-peak-earnings ratio. The chart below shows a version of that. The blue line (left scale) shows the ratio of total U.S. equity market capitalization to GDP. The red line (right scale) shows the ratio of total U.S. equity market capitalization to the highest level of economy-wide U.S. profits to date. Investors have gotten themselves into trouble here.</p>\n<p><img src=\"https://static.tigerbbs.com/a6630cf8302360e1b4645870051b21de\" tg-width=\"989\" tg-height=\"557\"></p>\n<p><b>What if valuations remain extreme forever?</b></p>\n<p>Probably the single most frequent question I've heard from investors over the past couple of years is \"What happens if valuations remain extreme forever?\" It's actually a version of the \"permanently high plateau\" that Irving Fisher disastrously projected in 1929. Still, recent years have produced enormous confidence among investors that the Federal Reserve's purchases of Treasury debt can permanently \"backstop\" the stock market.</p>\n<p>As I've detailed previously, quantitative easing supports the market only by creating zero interest hot potatoes that are uncomfortable for investors to hold (provided that they're inclined toward speculation), and that are impossible to get rid of in aggregate. Moreover, the Fed's purchases of corporate bonds during the pandemic were legally constrained to CARES funds provided by the Treasury, and ultimately amounted to $14 billion of bonds, in an economy with $11 trillion in corporate debt at $58 trillion in equity market capitalization.</p>\n<p>Suffice it to say that the \"Fed backstop\" is largely in the minds of investors, and relies almost exclusively on the psychological discomfort of holding low-yielding base money. Yet since perception can be indistinguishable from reality, particularly in the short run, it's important to entertain the question.</p>\n<p>My answer is that if the Fed is indeed able to maintain valuations at the highest levels in history, forever, stock prices would likely grow at roughly the same rate as nominal GDP. So figure 1.6% real structural growth plus 2% inflation gets you 3.6%. Let's call it 4%, which would match nominal GDP growth in both the 10-year and 20-year periods ending at the Q4 2019 economic peak, just before the pandemic. The first casualty of rising inflation is stock valuations, so it's not at all clear that assuming higher inflation would help stocks until valuations were roughly normalized, which would require consumer prices to roughly triple.</p>\n<p>The chart below is a reminder of how structural real GDP growth has progressed over recent decades (driven by demographic labor force growth and trend productivity), and the basis for that 1.6% figure for structural real GDP growth.</p>\n<p><img src=\"https://static.tigerbbs.com/cf63b9b8f5f3b55136c8523d73e864f3\" tg-width=\"1131\" tg-height=\"637\"></p>\n<p>Sticking with 4% nominal growth, and adding a 1.5% dividend yield, a \"permanently high plateau\" in market valuations would imply S&amp;P 500 total returns of about 5.5% annually. Again, this assumes that valuations never retreat from levels that presently stand at about 3.6 times their historical norms. Simply allow them to retreat to 2.4 times their historical norms a decade from now - which would still keep valuations among the highest 10% in U.S. history - and the resulting 10-year total return would drop to about 1.3%. I think this would actually be the best-case scenario even in a permanently overvalued world.</p>\n<p>At elevated valuations, even very small changes in expected return imply enormous changes in prices. So it's unlikely that a period of much higher average valuations will escape the prospect of relatively high volatility. Rather than a 70% market decline, which would presently be required for the S&amp;P 500 to simply touch historically run-of-the-mill valuation norms, investors could expect rather frequent market losses in the 20-35% range, which is essentially what we've seen even over the past few years.</p>\n<p>All of that would be fine with us. We've adapted our discipline sufficiently (especially in late-2017) to tolerate the possibility of permanently sustained overvaluation. My impression is that the impact of those adaptations has become more evident as we've had greater opportunities to live into them. I can't say that I believe for a second that investors will actually be spared from a 50-70% loss in the S&amp;P 500 in the coming years, but again, it will be fine with us if the market never approaches historical valuation norms again. With the adaptations we introduced in late-2017, our discipline is flexible enough to navigate a bubble even without embracing its premise.</p>\n<p><b>An unusual overlap of high-risk conditions</b></p>\n<p>Returning to Modigliani, my impression is that the advance of recent years to the most extreme valuations in history reflects exactly the bubble dynamics he described, and I expect that it will also end as he described (though not necessarily in one fell swoop): \"The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.\"</p>\n<p>One of our internal gauges tracks the correlation of market conditions with certain high-risk features that have preceded steep market collapses - a collection of measures capturing valuations, internals, sentiment, leverage, overextension, and yield pressures. Only a handful of instances in history overlap pre-crash conditions as well as they do at present. The current overlap is actually quite similar to August 1987. Meanwhile, the correlation of current conditions with features typically observed at market lows is the most negative in history.</p>\n<p>If you want my opinion, I suspect that a near-vertical market plunge on the order of 25-35% is coming, probably quite shortly, most likely out of the blue, as in 1987, driven by nothing more than the sudden concerted effort of overextended investors to sell, and the need for a large price adjustment in order to induce scarce buyers to take the other side.</p>\n<p>As usual, no forecasts are necessary. We'll align our investment stance in response to the valuations and market action that we observe at each point in time. Still, it's of particular concern that these overlaps are occurring in the context of the most extreme valuations in history, along with strikingly dysfunctional pockets of illiquidity in many individual issues. This dysfunctional behavior isn't about any particular video game retailer. I suspect it's actually about some sort of fragility or segmentation in order-flow mechanisms, possibly coupled with poorly managed derivatives exposure.</p>\n<p>As I used to teach my students, show me a financial debacle, and I'll show you someone who had a leveraged, mismatched position that they were suddenly forced to close into an illiquid market.</p>\n<p>Though my concerns run far beyond the amount of leverage in the system, it isn't helpful that the amount of leverage in the U.S. equity markets is now easily the highest in history. Some observers are inclined to bring this figure down by dividing instead by the market capitalization of equities. But here's some useful arithmetic:</p>\n<p>Margin Debt/GDP = Margin Debt/Market Cap x Market Cap/GDP</p>\n<p>To say that margin debt to GDP is at the highest level in history is to say not only that stocks are heavily owned on margin, but that those stocks are also breathtakingly overvalued. That combination is particularly worrisome.</p>\n<blockquote>\n All crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.\n</blockquote>\n<blockquote>\n - John Kenneth Galbraith, A Short History of Financial Euphoria\n</blockquote>\n<p><img src=\"https://static.tigerbbs.com/dc55dacbd5e01016cd9964422f941b0c\" tg-width=\"983\" tg-height=\"556\"></p>\n<p>The kind of event I'm suggesting would not bring valuations anywhere near historical valuation norms. Given current valuation extremes, it would be more like a palate cleanser. I have no particular expectation about what the next dish would be. In the event we do observe an abrupt market collapse, the Fed will undoubtedly respond with some new palliative. Whether or not it is effective will depend on the context of risk-aversion, inflation, credit risk, and other conditions at the time. The larger problem, as we've discussed, is that you can't \"save\" an overvalued asset by propping up its price. The value is in the future cash flows that will be delivered to investors over time. The elevated price only ensures that the long-term return between now and then will be dismal.</p>\n<p>Of course, nothing in our discipline relies on a market plunge. Given the combination of hypervaluation and divergent market internals (largely based on debt securities, but with increasing divergences in equities as well), I do believe that the stock market remains in a \"trap door\" situation. Still, that view will change as market conditions change. We'll refrain from adopting or amplifying a negative outlook if our measures of market internals improve. That discipline has served us well even amid record highs. Again, no forecasts are required, nor does this opinion drive our current investment stance. I just think the correlation with historical pre-crash conditions is worth noting.</p>\n<blockquote>\n How little, it will perhaps be agreed, was either original or otherwise remarkable about this history. Prices driven up on the expectation that they would go up, the expectation realized by the resulting purchases. Then the inevitable reversal of these expectations because of some seemingly damaging event or development or perhaps merely because the supply of intellectually vulnerable buyers was exhausted. Whatever the reason (and it is unimportant), the absolute certainty is that this world ends not with a whimper but with a bang. And so on to the moment of mass disillusion and the crash. This last, it will now be sufficiently evident, never comes gently. It is always accompanied by a desperate and largely unsuccessful effort to get out.\n</blockquote>\n<blockquote>\n - John Kenneth Galbraith on the 1929 collapse\n</blockquote>\n<p><b>Valuations and investment duration</b></p>\n<p>To understand why extreme valuations imply high volatility, and require extremely long investment horizons, it's useful to consider the concept of \"duration.\"</p>\n<p>Every security is a claim on a stream of future cash flows that can be expected to be delivered to the investor over time. While the concept of \"duration\" is most commonly used for bonds, it's actually applicable to any security, no matter how \"lumpy\" the stream of cash flows might be.</p>\n<p>If you don't like math, feel free to skim over the various equations and just read the pull quotes. I've provided the details just for completeness.</p>\n<p>The \"duration\" of a security can be defined in two ways.</p>\n<p>Investment horizon: the weighted average number of years it takes for the security to deliver its payments. For each period, you take the share of total present value represented by that year's payment, and multiply it by the number of years in the future the payment will be received. Add them all up. The result is the number of years from today (a weighted average) that the present value of your investment will be repaid. For example, the duration of a security that delivers a single payment a decade from now is simply 10 years.</p>\n<p>Elasticity: the percentage change in the security in response to a change in the underlying gross rate of return. Technically, elasticity is (-dP/P)/(dk/1+k). For example, suppose you own a security that will pay $100 a decade from now, and it's priced at $82.0348, for a 2% annual return. Now assume the expected return moves to 2.01%. The price would drop to $81.9544. Elasticity is (0.0804/82.0348)/(0.0001/1.02) = 10%</p>\n<p>It turns out that the \"duration\" of a security in years is identical to its \"duration\" in terms of the percentage change of price in response to a 1% fluctuation in expected returns. Duration is also the holding period that \"immunizes\" the investor against changes in expected returns over time. In other words, assuming you reinvest your cash flows over time, duration gives you a good idea of how long you have to hold the security in order for your ending wealth to be largely independent of the fluctuations that the security experiences over that horizon.</p>\n<p>If you know differentiation, can prove to yourself that the \"modified duration\" of the S&amp;P 500 is essentially the inverse of the dividend yield. The modified duration is just (-dP/P)/dk or Macaulay duration/(1+k).</p>\n<p>Consider P = D/(k-g). Differentiating with respect to k, dP/dk = -P/(k-g), so duration (-dP/P)/dk = P/D.</p>\n<p>Here's how to think about the link between valuations and duration. Presently, the dividend yield of the S&amp;P 500 is 1.48%. If the yield moves to 1.49%, holding dividends constant, prices drop by 1.48/1.49-1 = -0.67% on that 1 basis point move. Duration is just that sensitivity, defined for a 100 basis point move, which would be 67. It turns out that's also the weighted-average number of years from today that you'll receive your present value, if you invest today.</p>\n<p>Compare that to the typical situation over the past century, when the dividend yield of the S&amp;P 500 averaged about 3.7%. At normal valuations, a 1 basis point increase in the dividend yield would produce a price drop of 3.7/3.71-1 = 0.27%, implying a duration of 27 years.</p>\n<blockquote>\n It turns out that the 'duration' of a security in years is identical to its 'duration' in terms of the percentage change of price in response to a 1% fluctuation in expected returns. Duration is also the holding period that 'immunizes' the investor against changes in expected returns over time.\n</blockquote>\n<p>Historically, investors wishing to match the duration of their investment portfolio to the duration of their investment horizon could be reasonably comfortable holding 100% of their assets in stocks, provided they had an investment horizon of about 25-30 years. Presently, these investors would need an investment horizon closer to 65-70 years. They are currently holding sippy cups.</p>\n<p><b>Scarcity, usefulness, and value</b></p>\n<p>While we're on the subject of bubbles, I'll add a few comments on Bitcoin, just for fun. I'd write more, but my sides still hurt from laughing.</p>\n<p>Objects like tulip bulbs and Bitcoin differ from securities in that they do not deliver a stream of cash flows to the holder. Instead, what objects like tulips and currencies provide is a little stream of services over time, for example, as a perennial thing of beauty or as a means of payment. What people sometimes forget is that it is not just scarcity that defines the value of an object, but the stream of useful \"services\" that it provides (for some reason, nobody wants to buy my unique, limited edition, digitally-signed porcupine seat covers). The price of the object, and the stream of services it provides, should be commensurate.</p>\n<p>U.S. dollars, for example, have value primarily because they are tethered to the real economy by fiat (they legally must be accepted as a means of payment, as noted on the face of any dollar bill), and they represent the entire substrate of the banking system - nearly every payment that goes back and forth in the U.S. economy represents a transfer of base money. Base money (currency and bank reserves) provides billions of little \"services\" over time.</p>\n<p>With every transaction, reserves move electronically from bank to bank between one account holder and another. That combination of legal fiat and constant use as a substrate of the payments system is what gives money \"value.\" That value also means that the U.S. government essentially obtains revenue as \"seigniorage\" for producing the stuff. For those who imagine that governments are going to surrender that revenue in favor of using Bitcoin, I've got a non-fungible token to sell you.</p>\n<p><img src=\"https://static.tigerbbs.com/747b2ba31a8d94d85d374d12b13b3c96\" tg-width=\"665\" tg-height=\"718\"></p>\n<p>As I've noted before, blockchain is a brilliant algorithm, and I expect that it will have a great number of uses for secure transactions and inventory management. Bitcoin, however, is a token generated by an energy-inefficient, replicable blockchain app. Ultimately, its value rests on the capacity to provide transactions services, yet without fiat to require its use, and with strikingly narrow bandwidth - one block of roughly 2000 transactions every 10 minutes - that I expect will prove to be a wildly limiting feature. That's a problem in a world where speculators now value the stock of bitcoin at one-fifth the value of the entire U.S. monetary base.</p>\n<blockquote>\n If you think about how money is valued, it's clear that people accept it because they believe it will provide a claim on the future output of others. Of course, that expectation requires that future producers will also give away their output and accept the money, on the belief that yet other future producers will do the same. That expectation has to continue indefinitely. Like the question 'What holds up Atlas when Atlas holds up the world?' it's not enough to answer that he's standing on a turtle. It's got to be turtles all the way down. The value of money has an enormous psychological component.\"\n</blockquote>\n<blockquote>\n - John P. Hussman, Ph.D., Turtles All the Way Down, February 2019\n</blockquote>\n<p>Of course, Bitcoin may have a certain user base as a vehicle for money laundering and black market transactions, but that's an undesirable investment thesis. The vast majority of transactions are to exchange Bitcoin itself, though the New York Times did recently report that \"pornography, patio furniture, and an at-home coronavirus test are among the odd assortment of goods and services that people are purchasing with the cryptocurrency.\" So, basically, if your typical day consists of surfing porn on your patio while testing yourself for COVID, you're gonna want to look into Bitcoin.</p>\n<p>My largest concern is that people are actually forking over hard-earned savings in exchange for these tokens, which allows early \"miners\" to cash out. That's essentially the defining feature of a Ponzi scheme. Like all speculative bubbles that rely on increases in price, rather than cash flows generated by the production of value-added goods and services, Bitcoin isn't actually creating \"wealth.\" It's only creating the opportunity for wealth transfer, primarily from those who will end up holding the bag.</p>\n<p>Bitcoin has certain characteristics of base money in the sense that it's exchanged on an electronic ledger, but by design, transactions are limited to an average of about 2000 per block, with one block successfully validated, on average, every 10 minutes. In order to validate a transaction block, CPU farms across the world grind out terahashes of random SHA256 validation attempts in order to discover a sufficiently small binary that matches the cryptographic hash of the block.</p>\n<p>All of this \"mining\" burns up about as much energy as it takes to run a modest-sized country. Validating a block of transactions produces a reward to the miner (and dilution of the coinbase) of 6.25 Bitcoin per block, which currently works out to nearly $200 per transaction. Yet the value of the median transaction in Bitcoin is only about $1000 in the first place.</p>\n<p>There's a rather primitive regression analysis floating around (tagged as \"sophisticated\" by some observers who apparently go numb at the word \"logarithm\") that attempts to relate the log price of bitcoin to the log \"stock/flow\" ratio, as if it represents some mechanistic supply-demand relationship. Aside from the fact that the correlation between two diagonal lines is always about 0.9-something, I find that one can obtain a better fit just by regressing the log price of Bitcoin on the log ratio of block difficulty/block reward, which is basically a measure of how much energy one needs to waste in order to mine a new bitcoin.</p>\n<p>So the \"value\" of Bitcoin is partially linked to the backward-looking sunk cost of the energy wasted to mine these tokens. Still, I wouldn't dream of using this sort of \"model\" to trade an object whose \"value\" is primarily in the heads of speculators. Use it if you like. If you happen make money on it, feel free send me a check, preferably in U.S. dollars.</p>\n<p>Undoubtedly, this view of Bitcoin will be unpopular among those who associate holding Bitcoin with superpowers like laser eyes and diamond hands. \"Not surprised Hussman doesn't get Bitcoin. Few do.\" M'kay. Look, there's certainly a case to be made that a speculative mindset creates its own reality, and while it does, there's an opportunity to obtain wealth transfers from frantic late-comers who can no longer tolerate missing out. Tulips gonna tulip. Not my gig, thanks.</p>\n<blockquote>\n In the short run, it will be said to be an attack, motivated by either deficient understanding or uncontrolled envy, of the wonderful process of enrichment. Those involved with the speculation are experiencing an increase in wealth - getting rich or being further enriched. No one wishes to believe that this is fortuitous or undeserved; all wish to think that it is the result of their own superior insight or intuition. As long as they are in, they have a strong pecuniary commitment to belief in the unique personal intelligence that tells them there will be yet more. Accordingly, possession must be associated with some special genius. Speculation buys up, in a very practical way, the intelligence of those involved. Only after the speculative collapse does the truth emerge. What was thought to be unusual acuity turns out to be only a fortuitous and unfortunate association with the assets.\n</blockquote>\n<blockquote>\n - John Kenneth Galbraith, A Brief History of Financial Euphoria\n</blockquote>","source":"lsy1615871319183","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How To Spot A Bubble</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow To Spot A Bubble\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-16 13:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.hussmanfunds.com/comment/mc210315/><strong>Hussman Funds</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nThe defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations.\nIf we compare our most reliable valuation measures...</p>\n\n<a href=\"https://www.hussmanfunds.com/comment/mc210315/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".IXIC":"NASDAQ Composite",".DJI":"道琼斯",".SPX":"S&P 500 Index"},"source_url":"https://www.hussmanfunds.com/comment/mc210315/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1172271196","content_text":"Summary\n\nThe defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations.\nIf we compare our most reliable valuation measures with the valuation measures that one would obtain from a proper long-term discounted cash flow analysis, we find that they're nearly identical.\nOne of the unfortunate bits of financial illiteracy that Wall Street has pushed into the heads of investors is the idea that extreme valuations are \"justified\" by low interest rates.\nIt's undoubtedly true that profit margins, expected growth, and other factors have an effect on future deliverable cash flows and the valuations that investors place on stocks.\nTo understand why extreme valuations imply high volatility, and require extremely long investment horizons, it's useful to consider the concept of \"duration.\"\n\n\n I can show, really precisely, that there are two warranted prices for a share. The one I prefer is based on such fundamentals as earnings and growth rates, but the bubble is rational in a certain sense. The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.- Nobel Laureate Franco Modigliani, New York Times, March 30, 2000\n\nThe word \"bubble\" is tossed around quite a bit in the financial markets, but it's rarely used correctly. See, the thing that defines a bubble isn't that valuations are extremely high, or that expected returns are extremely low. Instead, what defines a bubble is that investors drive valuations higher without simultaneously adjusting expectations for returns lower. That is, investors extrapolate past returns based on price behavior, even though those expectations are inconsistent with the returns that would equate price with discounted cash flows.\nIn March 2000, at the height of the technology bubble, I noted: \"Over time, price/revenue ratios come back in line. Currently, that would imply an 83% plunge in tech stocks. If you understand values and market history, you know we're not joking.\" The following month, I discussed Modigliani's quote above, and detailed the dynamics he was describing. The collapse of the 2000 bubble would ultimately erase half the value of the S&P 500, and would take the tech-heavy Nasdaq 100 down an implausibly precise 83%.\nThe defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations. If investors pay $150 today for a security that will deliver a single $100 payment a decade from now, but they also fully understand that they'll lose 4% annually on the deal, without extrapolating past gains into the future, then we might say the security is overvalued, and we might question why investors would accept that trade, but we can't call it a bubble.\nBut if investors pay $150 today for that security, because they look back in the rear-view mirror, decide that it \"always goes up\" over time, and convince themselves that expected future returns are always positive, then you've got a bubble. Discounting the future $100 cash flow of the security using any positive expected return would produce a price less than $100. So the positive returns expected by investors are inconsistent with the returns that would equate price with discounted cash flows. The size of the bubble is the fraction of the market price that represents expectational \"hot air.\"\nLikewise, the willingness of investors to embrace \"passive investments\" like ETFs and asset-backed securities based on past performance, with little concern about the valuations, yields, or credit risk of the securities inside, is the very soap from which bubbles repeatedly emerge. Amid the current enthusiasm for special purpose acquisition companies (SPACS), investors might recall the bubble in \"incubators\" at the 2000 peak, the \"conglomerates\" of the late-1960s Go-Go bubble, and even the South Sea Company in the early 1700s, along with similar companies formed at the time \"for carrying on an undertaking of great advantage, but nobody to know what it is.\"\nIf investors price the S&P 500 at levels that are highly likely to produce negative returns for a decade, as they did in 1929 and 2000, and as I believe they are doing at present, yet investors continue to press stock prices higher on the expectation that they will provide historically normal levels of future return regardless of valuations, then you have the sort of inconsistency that defines a bubble.\nLikewise, if the expected return of a conventional passive investment mix is negative on a 10-12 year horizon (based on reliable valuation measures strongly correlated with actual subsequent returns over a century of market history), yet pension return assumptions remain locked near 7% annually, you've got a bubble, and most likely a future pension funding crisis, on your hands.\nThis is how very bad things have repeatedly happened in the financial markets across history, enabled by what Galbraith called \"the extreme brevity of the financial memory.\"\nWhen Modigliani says that there are two \"warranted\" prices, he means that - at least in the short run - there are two ways that prices can fulfill the expectations of investors. In one case, investors have expectations about future returns, and those expectations are informed by the level of valuations. If prices rise, and expected cash flows haven't changed, investors recognize that future returns will be lower. In the \"bubble\" case, investors have high expectations about future returns, mainly based on past returns, and they act on those expectations by driving prices up further. So the expectation of additional price increases is simply reinforced. \"The expectation of growth produces the growth, which confirms the expectation.\"\nOnly one of these prices is consistent, in that the rate of return expected by investors is also the rate of return that equates price with discounted future cash flows. The other price becomes increasingly detached from fundamentals, as a larger and larger fraction of the price represents hot air, and it ultimately collapses as the gap becomes untenably wide.\nDuring speculative segments of the market cycle, there's nothing that forces investors to recognize that higher valuations imply lower returns, or to change their expectation of high returns as far as the eye can see. That, of course, is why we use measures of market internals to gauge the inclination of investors toward speculation or risk-aversion. Valuation provides an enormous amount of information about likely long-term returns and potential market losses over the complete cycle. But valuation isn't a timing tool. In recent years, it hasn't even imposed a limit on speculative recklessness.\nStill, with each price advance, the actual long-term return implied by future cash flows - what investors will ultimately realize as those cash flows are delivered - collapses further, even while investors act on their delusion that long-term returns have nothing to do with price. Eventually, the bulk of the security price represents a bubble component, not the price that would actually need to exist in order for the long-term expectations of investors to be accurate.\nAs I wrote at the 2000 market peak:\n\n \"As long as investors focus on year-to-year returns and not discounted cash flow calculations, the bubble can continue to grow in self-reinforcing fashion. Investors anticipate a high return, and the price behavior reinforces the expectation. The true long-term return becomes increasingly detached from the long-term return imagined by investors, and the bubble component accounts for an increasingly large proportion of the total price.\"\n\nBy our most reliable measures, run-of-the-mill historical valuation norms are roughly 70% below current levels. I know you don't want to believe that.\n\nThe trap door quietly swings open when valuations are extreme and market internals begin to deteriorate. That's the situation we've observed in our measures in recent weeks, with the initial deterioration largely driven by debt securities, but with increasing divergences in equities as well.\nValuations and discounted cash flows\n\n Valuations measure the tradeoff between current prices and a very long-term stream of expected future cash flows. Every useful valuation ratio is just shorthand for that calculation. Every valuation ratio that fails that criterion is inferior, and you can show it in historical data.\n\n\n - John P. Hussman, Ph.D., The Meaning of Valuation, December 2019\n\nI've often noted that the denominator of every good valuation measure is just shorthand for the decades and decades of cash flows that the security is likely to deliver in the future. In fact, we always test the validity of the valuation measures we use by examining:\na) how strongly the resulting valuation measures are correlated with actual subsequent total returns, and;\nb) how closely they replicate an explicit discounted cash flow analysis.\nBelow, we'll examine a variety of valuation measures that offer some perspective on why I view the U.S. equity market as a bubble near the breaking point. Along the way, I'll point out some interesting features of valuations and their relationship with subsequent returns. If math gives you hives, feel free to skim over the small amount that I've included here and there.\nConsider first the relationship between valuations and subsequent returns. I'll state the following, which you can prove to yourself by toying around a bit with present value models: the logarithm of a good valuation measure should have an inverse and roughly linear relationship with the expected subsequent investment return.\nHere's a simple example of what this looks like.\n\nHere's what this looks like for MarketCap/GVA, our most reliable stock market valuation measure\n\nDuring the past three decades, we've studied and introduced a broad range of valuation measures. Most can be calculated back to 1947. Some can be evaluated over a century or more. Across history, even in recent decades, we find that the valuation measures that are best correlated with actual subsequent returns are those with muted sensitivity to cyclical fluctuations in profit margins, and that behave largely like broad, market-wide price/revenue ratios.\nIf we compare our most reliable valuation measures with the valuation measures that one would obtain from a proper long-term discounted cash flow analysis, we find that they're nearly identical. Here's what this comparison looks like for the actual stream of dividends (including the impact of repurchases) delivered by the S&P 500 since 1900, discounted at a fixed 10% rate (see the chart text for additional details).\nThe reason we use a fixed rate of return is that a multiple of 1.0 is then, by definition, the level at which the S&P 500 would have been priced for that particular level of expected return. Any deviation in the valuation multiple from 1.0 then gauges how far likely future returns are from that \"typical\" expected return. We're currently farther away from \"typical\" expected returns than at any moment in history, including the 1929 and 2000 market peaks.\n\nOne of the unfortunate bits of financial illiteracy that Wall Street has pushed into the heads of investors is the idea that extreme valuations are \"justified\" by low interest rates. Now, it's certainly true that holding future cash flows constant, raising the price of an investment will lower the embedded rate of return, and vice versa. If you pay $32 today for $100 a decade from today, you can expect a 12% annual return. If you pay $82 for the same security, you can expect a 2% annual return. If you pay $100 today, you can expect nothing. So it's clearly true that holding future cash flows constant, a lower rate of return implies a higher level of valuation.\nThe reason the statement \"low interest rates justify high valuations\" contributes to financial illiteracy is that the statement has been learned entirely out of context of the arithmetic. As a result, investors seem to imagine that, as long as high valuations can be \"justified,\" stocks can be expected to provide historically normal rates of return in the future. Likewise, investors seem to have no concept that if interest rates are low because growth rates are low, no valuation premium is \"justified\" for stocks, because the lower growth is already sufficient to bring future stock returns down to levels that are commensurate with the low level of interest rates.\nThe truth is simple but uncomfortable. If interest rates are low and expected growth is held constant, higher valuations imply lower long-term returns. If interest rates are low because expected future growth is also low, higher valuations are not required. Long-term returns will be lower anyway. A valuation premium just makes future returns even worse.\nSaying that extremely low interest rates \"justify\" extremely high stock valuations is identical to saying that extremely low future returns on bonds \"justify\" extremely low future returns on stocks. I don't really think that's something Wall Street cares to clarify when it tells investors that stock market valuations are \"justified.\"\nInvestment valuation is concerned with the relationship between three objects: the current price, the future cash flows, and the rate of return that connects the two like a string. The lower the current price and the higher the future cash flows, the steeper the string. The higher the current price and the lower the future cash flows, the flatter the string. Raise the current price above the future cash flows, and the string will point down instead of up. Given any two of these objects, you can calculate the third one.\nFor example, if you want to estimate expected long-term returns, you need two objects: a) the current price and b) the expected stream of future cash flows. A good valuation ratio is just shorthand for those two objects, so you can estimate the long-term return directly from the level of valuation. Then, if you like, you can compare it with the level of interest rates. That comparison can be useful, because even when investors realize that high stock market valuations imply low long-term returns, it's not at all clear that they realize how low long-term return prospects have been driven.\nThe chart below shows our estimate of expected 12-year S&P 500 total returns over-and-above Treasury bond yields, across a century of market history. Compare this with the nearly useless drivel that Wall Street passes off as the \"equity risk premium\" (typically quoted as the S&P 500 forward earnings yield minus the 10-year Treasury yield). Yes, you're reading the chart correctly. Given current valuations, we expect the total return of the S&P 500 to underperform the lowly yield on Treasury bonds by roughly -6% annually over the coming 12-year period.\n\nMany investors confuse the estimation of expected returns (which requires only expected cash flows and the observed price) with a different problem - the estimation of \"fair value.\" See, interest rates come into the picture when you have an expected stream of future cash flows and you want to calculate a \"fair\" current price. In that case, rather than picking an arbitrary rate of return from a hat, it's common to use the level of interest rates, plus some risk premium, as the expected long-term return (or discount rate, or capitalization rate). This sort of calculation can be super-sensitive to arbitrary choices.\nIn particular, Wall Street loves to combine super-high growth rates, super-low discount rates, and super-long time horizons, which allows one to calculate a \"fair value\" that's as close to infinity as possible. The thing to remember is that whatever rate of return an analyst embeds into the fair value calculation is also the long-term rate of return you'll earn over time if you pay that price, assuming the future cash flows are delivered as expected.\nAmong scores of measures we've evaluated or introduced over time, MarketCap/GVA (nonfinancial market capitalization to corporate gross value-added, including our estimate of foreign revenues) has the highest correlation with actual subsequent 10-12 year S&P 500 total returns, followed by our Margin-Adjusted P/E (MAPE). I find it hilarious that the various valuation measures I've introduced over time are sometimes described as products of \"machine learning,\" \"data mining,\" and \"curve fitting\" when they are, in fact, just different versions of an apples-to-apples economy-wide price/revenue ratio.\n\nThe S&P 500 price/revenue ratio and nonfinancial market capitalization to GDP (the \"Buffett indicator\") also perform well, and better than earnings-based alternatives like price/forward earnings, the Fed Model, and even the Shiller CAPE. See, while earnings are necessary to generate long-term cash flows, they are also subject to fluctuations in profit margins (both cyclically and even from decade to decade) that turn out to be highly uninformative.\nEconomically, fluctuations in profit margins are driven primarily by fluctuations in real unit labor costs. Because companies compete on the basis of realized after-tax profits rather than pre-tax profits, changes in tax policy also have far less durable impact on corporate profits than investors seem to imagine. While corporate profits got a tremendous boost last year from CARES spending (the deficit of one sector always emerges as the surplus of another), here's what the relationship between corporate profits and real unit labor costs looks like historically.\nReal unit labor costs are presented on an inverted left scale. The upward pressure on labor costs (observed as a plunge in the blue line) isn't particularly auspicious for future profits. Still, there's so much distortion in recent quarters that I'd consider the jury to be out on how much of this will be sustained.\n\nIt's undoubtedly true that profit margins, expected growth, and other factors have an effect on future deliverable cash flows and the valuations that investors place on stocks. But even for technology stocks, these assumptions should be made explicit and tested against history. You'll find that observable measures like price/revenue are still very serviceable. In fact, the extreme price/revenue multiples of technology stocks helped to inform my March 2000 projection of an 83% loss in that sector.\nAs Benjamin Graham wrote, \"The habit of relating what is paid to what is being offered is an invaluable trait in investment. The more dependent the valuation becomes on anticipations of the future - and the less it is tied to a figure demonstrated by past performance - the more vulnerable it becomes to possible miscalculation and serious error.\"\nThe current 5.19 price/revenue multiple for the Nasdaq 100, is the most extreme level since February 2001, which was followed by a 60% loss in the index (after it had already dropped in half). The situation is actually a bit worse than 2001 here. If one examines the largest components of the index, it becomes clear that their annual growth rates have declined substantially over time.\nAs a result, a dollar of current revenues should arguably command a smaller multiple than a dollar of revenues might have during earlier periods of emerging growth. Yet even if one takes the Nasdaq 100 price/revenue ratio at face value, and even if one restricts attention to the bubble period since 2000, it's difficult to expect the Nasdaq to produce total returns over the coming decade much better than zero.\n\nYou don't really want to see what the same chart looks like for the S&P 500.\n\nThe same is true, unfortunately, for passive investment strategies. We presently estimate negative 12-year average annual total returns for a conventional passive investment mix invested 60% in the S&P 500, 30% in Treasury bonds, and 10% in Treasury bills.\nIn a 2019 white paper, I detailed an approach to estimate a \"value-focused asset allocation\" by jointly considering prevailing stock market valuations and interest rates. It specifies an investment allocation based on which asset class is estimated to have the highest average annual expected return, adjusted for risk, to each point in a long-term investment horizon. That allocation can then be modified by a risk-management component, to adjust the exposure during segments of the market cycle where risk-aversion or speculation among market participants may temporarily drive valuations to depressed or elevated levels. The white paper includes numerous charts showing how this value-focused asset allocation has changed across market history, particularly at important peaks and troughs in the stock and bond markets.\nAlong with those methods, I introduced our \"Endowment/spending multiple,\" which estimates the number of years of spending that a passive 60/30/10 investor requires up-front, in order to finance an expected 36-year stream of future inflation-adjusted spending. The idea here is that in a deeply undervalued market with high expected future returns, investors can finance a future stream of spending with far less than they require when valuations are extreme and prospective returns are low.\nYou know you're in a bubble when funding a 36-year stream of expected inflation-adjusted spending requires over 38 years of money up-front.\n\nIn the chart below, the Endowment/spending multiple is presented on an inverted log scale (left), along with the actual subsequent average annual total return of a 60/30/10 portfolio mix (right scale). Needless to say, we adhere to investment disciplines that are intended to address problems like this.\n\nAs a testament to the breadth of this speculative episode, the median price/revenue ratio of S&P 500 components now exceeds 3.3, easily a record, and extreme enough to provoke distress about the potential losses that innocent but poorly-informed investors may experience over the completion of this cycle.\n\nThe next chart shows the median price/revenue ratio of S&P 500 components sorted into 10 deciles by valuation. The chart is presented on log scale to allow each line to be compared with its own history. Each segment on the vertical axis represents a doubling of valuations. Notice that every single decile of S&P 500 components is at record valuation extremes. Investors now rely on a permanently high plateau in these extremes.\n\nIt's interesting, but far less important, that the median price/earnings ratio of S&P 500 components has also reached 32.4, the highest level in history. This compares with a median P/E of 19.4 at the 2000 market peak. The problem with P/E multiples, of course, is that they are substantially affected by earnings variability. In fact, prior to the current peak, the highest median P/E for the S&P 500 was actually in March 2002, when the index was down 25% from the March 2000 bubble highs. That's because earnings were down far more by then, which boosted P/E ratios. Such is the danger of taking P/E multiples at face value.\nA crude but reasonably effective way to get around the cyclicality of earnings (but only for very broad indices), is to compare prices to the highest level of earnings achieved to-date. I introduced this metric back in 1998 as the price-to-peak-earnings ratio. The chart below shows a version of that. The blue line (left scale) shows the ratio of total U.S. equity market capitalization to GDP. The red line (right scale) shows the ratio of total U.S. equity market capitalization to the highest level of economy-wide U.S. profits to date. Investors have gotten themselves into trouble here.\n\nWhat if valuations remain extreme forever?\nProbably the single most frequent question I've heard from investors over the past couple of years is \"What happens if valuations remain extreme forever?\" It's actually a version of the \"permanently high plateau\" that Irving Fisher disastrously projected in 1929. Still, recent years have produced enormous confidence among investors that the Federal Reserve's purchases of Treasury debt can permanently \"backstop\" the stock market.\nAs I've detailed previously, quantitative easing supports the market only by creating zero interest hot potatoes that are uncomfortable for investors to hold (provided that they're inclined toward speculation), and that are impossible to get rid of in aggregate. Moreover, the Fed's purchases of corporate bonds during the pandemic were legally constrained to CARES funds provided by the Treasury, and ultimately amounted to $14 billion of bonds, in an economy with $11 trillion in corporate debt at $58 trillion in equity market capitalization.\nSuffice it to say that the \"Fed backstop\" is largely in the minds of investors, and relies almost exclusively on the psychological discomfort of holding low-yielding base money. Yet since perception can be indistinguishable from reality, particularly in the short run, it's important to entertain the question.\nMy answer is that if the Fed is indeed able to maintain valuations at the highest levels in history, forever, stock prices would likely grow at roughly the same rate as nominal GDP. So figure 1.6% real structural growth plus 2% inflation gets you 3.6%. Let's call it 4%, which would match nominal GDP growth in both the 10-year and 20-year periods ending at the Q4 2019 economic peak, just before the pandemic. The first casualty of rising inflation is stock valuations, so it's not at all clear that assuming higher inflation would help stocks until valuations were roughly normalized, which would require consumer prices to roughly triple.\nThe chart below is a reminder of how structural real GDP growth has progressed over recent decades (driven by demographic labor force growth and trend productivity), and the basis for that 1.6% figure for structural real GDP growth.\n\nSticking with 4% nominal growth, and adding a 1.5% dividend yield, a \"permanently high plateau\" in market valuations would imply S&P 500 total returns of about 5.5% annually. Again, this assumes that valuations never retreat from levels that presently stand at about 3.6 times their historical norms. Simply allow them to retreat to 2.4 times their historical norms a decade from now - which would still keep valuations among the highest 10% in U.S. history - and the resulting 10-year total return would drop to about 1.3%. I think this would actually be the best-case scenario even in a permanently overvalued world.\nAt elevated valuations, even very small changes in expected return imply enormous changes in prices. So it's unlikely that a period of much higher average valuations will escape the prospect of relatively high volatility. Rather than a 70% market decline, which would presently be required for the S&P 500 to simply touch historically run-of-the-mill valuation norms, investors could expect rather frequent market losses in the 20-35% range, which is essentially what we've seen even over the past few years.\nAll of that would be fine with us. We've adapted our discipline sufficiently (especially in late-2017) to tolerate the possibility of permanently sustained overvaluation. My impression is that the impact of those adaptations has become more evident as we've had greater opportunities to live into them. I can't say that I believe for a second that investors will actually be spared from a 50-70% loss in the S&P 500 in the coming years, but again, it will be fine with us if the market never approaches historical valuation norms again. With the adaptations we introduced in late-2017, our discipline is flexible enough to navigate a bubble even without embracing its premise.\nAn unusual overlap of high-risk conditions\nReturning to Modigliani, my impression is that the advance of recent years to the most extreme valuations in history reflects exactly the bubble dynamics he described, and I expect that it will also end as he described (though not necessarily in one fell swoop): \"The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.\"\nOne of our internal gauges tracks the correlation of market conditions with certain high-risk features that have preceded steep market collapses - a collection of measures capturing valuations, internals, sentiment, leverage, overextension, and yield pressures. Only a handful of instances in history overlap pre-crash conditions as well as they do at present. The current overlap is actually quite similar to August 1987. Meanwhile, the correlation of current conditions with features typically observed at market lows is the most negative in history.\nIf you want my opinion, I suspect that a near-vertical market plunge on the order of 25-35% is coming, probably quite shortly, most likely out of the blue, as in 1987, driven by nothing more than the sudden concerted effort of overextended investors to sell, and the need for a large price adjustment in order to induce scarce buyers to take the other side.\nAs usual, no forecasts are necessary. We'll align our investment stance in response to the valuations and market action that we observe at each point in time. Still, it's of particular concern that these overlaps are occurring in the context of the most extreme valuations in history, along with strikingly dysfunctional pockets of illiquidity in many individual issues. This dysfunctional behavior isn't about any particular video game retailer. I suspect it's actually about some sort of fragility or segmentation in order-flow mechanisms, possibly coupled with poorly managed derivatives exposure.\nAs I used to teach my students, show me a financial debacle, and I'll show you someone who had a leveraged, mismatched position that they were suddenly forced to close into an illiquid market.\nThough my concerns run far beyond the amount of leverage in the system, it isn't helpful that the amount of leverage in the U.S. equity markets is now easily the highest in history. Some observers are inclined to bring this figure down by dividing instead by the market capitalization of equities. But here's some useful arithmetic:\nMargin Debt/GDP = Margin Debt/Market Cap x Market Cap/GDP\nTo say that margin debt to GDP is at the highest level in history is to say not only that stocks are heavily owned on margin, but that those stocks are also breathtakingly overvalued. That combination is particularly worrisome.\n\n All crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.\n\n\n - John Kenneth Galbraith, A Short History of Financial Euphoria\n\n\nThe kind of event I'm suggesting would not bring valuations anywhere near historical valuation norms. Given current valuation extremes, it would be more like a palate cleanser. I have no particular expectation about what the next dish would be. In the event we do observe an abrupt market collapse, the Fed will undoubtedly respond with some new palliative. Whether or not it is effective will depend on the context of risk-aversion, inflation, credit risk, and other conditions at the time. The larger problem, as we've discussed, is that you can't \"save\" an overvalued asset by propping up its price. The value is in the future cash flows that will be delivered to investors over time. The elevated price only ensures that the long-term return between now and then will be dismal.\nOf course, nothing in our discipline relies on a market plunge. Given the combination of hypervaluation and divergent market internals (largely based on debt securities, but with increasing divergences in equities as well), I do believe that the stock market remains in a \"trap door\" situation. Still, that view will change as market conditions change. We'll refrain from adopting or amplifying a negative outlook if our measures of market internals improve. That discipline has served us well even amid record highs. Again, no forecasts are required, nor does this opinion drive our current investment stance. I just think the correlation with historical pre-crash conditions is worth noting.\n\n How little, it will perhaps be agreed, was either original or otherwise remarkable about this history. Prices driven up on the expectation that they would go up, the expectation realized by the resulting purchases. Then the inevitable reversal of these expectations because of some seemingly damaging event or development or perhaps merely because the supply of intellectually vulnerable buyers was exhausted. Whatever the reason (and it is unimportant), the absolute certainty is that this world ends not with a whimper but with a bang. And so on to the moment of mass disillusion and the crash. This last, it will now be sufficiently evident, never comes gently. It is always accompanied by a desperate and largely unsuccessful effort to get out.\n\n\n - John Kenneth Galbraith on the 1929 collapse\n\nValuations and investment duration\nTo understand why extreme valuations imply high volatility, and require extremely long investment horizons, it's useful to consider the concept of \"duration.\"\nEvery security is a claim on a stream of future cash flows that can be expected to be delivered to the investor over time. While the concept of \"duration\" is most commonly used for bonds, it's actually applicable to any security, no matter how \"lumpy\" the stream of cash flows might be.\nIf you don't like math, feel free to skim over the various equations and just read the pull quotes. I've provided the details just for completeness.\nThe \"duration\" of a security can be defined in two ways.\nInvestment horizon: the weighted average number of years it takes for the security to deliver its payments. For each period, you take the share of total present value represented by that year's payment, and multiply it by the number of years in the future the payment will be received. Add them all up. The result is the number of years from today (a weighted average) that the present value of your investment will be repaid. For example, the duration of a security that delivers a single payment a decade from now is simply 10 years.\nElasticity: the percentage change in the security in response to a change in the underlying gross rate of return. Technically, elasticity is (-dP/P)/(dk/1+k). For example, suppose you own a security that will pay $100 a decade from now, and it's priced at $82.0348, for a 2% annual return. Now assume the expected return moves to 2.01%. The price would drop to $81.9544. Elasticity is (0.0804/82.0348)/(0.0001/1.02) = 10%\nIt turns out that the \"duration\" of a security in years is identical to its \"duration\" in terms of the percentage change of price in response to a 1% fluctuation in expected returns. Duration is also the holding period that \"immunizes\" the investor against changes in expected returns over time. In other words, assuming you reinvest your cash flows over time, duration gives you a good idea of how long you have to hold the security in order for your ending wealth to be largely independent of the fluctuations that the security experiences over that horizon.\nIf you know differentiation, can prove to yourself that the \"modified duration\" of the S&P 500 is essentially the inverse of the dividend yield. The modified duration is just (-dP/P)/dk or Macaulay duration/(1+k).\nConsider P = D/(k-g). Differentiating with respect to k, dP/dk = -P/(k-g), so duration (-dP/P)/dk = P/D.\nHere's how to think about the link between valuations and duration. Presently, the dividend yield of the S&P 500 is 1.48%. If the yield moves to 1.49%, holding dividends constant, prices drop by 1.48/1.49-1 = -0.67% on that 1 basis point move. Duration is just that sensitivity, defined for a 100 basis point move, which would be 67. It turns out that's also the weighted-average number of years from today that you'll receive your present value, if you invest today.\nCompare that to the typical situation over the past century, when the dividend yield of the S&P 500 averaged about 3.7%. At normal valuations, a 1 basis point increase in the dividend yield would produce a price drop of 3.7/3.71-1 = 0.27%, implying a duration of 27 years.\n\n It turns out that the 'duration' of a security in years is identical to its 'duration' in terms of the percentage change of price in response to a 1% fluctuation in expected returns. Duration is also the holding period that 'immunizes' the investor against changes in expected returns over time.\n\nHistorically, investors wishing to match the duration of their investment portfolio to the duration of their investment horizon could be reasonably comfortable holding 100% of their assets in stocks, provided they had an investment horizon of about 25-30 years. Presently, these investors would need an investment horizon closer to 65-70 years. They are currently holding sippy cups.\nScarcity, usefulness, and value\nWhile we're on the subject of bubbles, I'll add a few comments on Bitcoin, just for fun. I'd write more, but my sides still hurt from laughing.\nObjects like tulip bulbs and Bitcoin differ from securities in that they do not deliver a stream of cash flows to the holder. Instead, what objects like tulips and currencies provide is a little stream of services over time, for example, as a perennial thing of beauty or as a means of payment. What people sometimes forget is that it is not just scarcity that defines the value of an object, but the stream of useful \"services\" that it provides (for some reason, nobody wants to buy my unique, limited edition, digitally-signed porcupine seat covers). The price of the object, and the stream of services it provides, should be commensurate.\nU.S. dollars, for example, have value primarily because they are tethered to the real economy by fiat (they legally must be accepted as a means of payment, as noted on the face of any dollar bill), and they represent the entire substrate of the banking system - nearly every payment that goes back and forth in the U.S. economy represents a transfer of base money. Base money (currency and bank reserves) provides billions of little \"services\" over time.\nWith every transaction, reserves move electronically from bank to bank between one account holder and another. That combination of legal fiat and constant use as a substrate of the payments system is what gives money \"value.\" That value also means that the U.S. government essentially obtains revenue as \"seigniorage\" for producing the stuff. For those who imagine that governments are going to surrender that revenue in favor of using Bitcoin, I've got a non-fungible token to sell you.\n\nAs I've noted before, blockchain is a brilliant algorithm, and I expect that it will have a great number of uses for secure transactions and inventory management. Bitcoin, however, is a token generated by an energy-inefficient, replicable blockchain app. Ultimately, its value rests on the capacity to provide transactions services, yet without fiat to require its use, and with strikingly narrow bandwidth - one block of roughly 2000 transactions every 10 minutes - that I expect will prove to be a wildly limiting feature. That's a problem in a world where speculators now value the stock of bitcoin at one-fifth the value of the entire U.S. monetary base.\n\n If you think about how money is valued, it's clear that people accept it because they believe it will provide a claim on the future output of others. Of course, that expectation requires that future producers will also give away their output and accept the money, on the belief that yet other future producers will do the same. That expectation has to continue indefinitely. Like the question 'What holds up Atlas when Atlas holds up the world?' it's not enough to answer that he's standing on a turtle. It's got to be turtles all the way down. The value of money has an enormous psychological component.\"\n\n\n - John P. Hussman, Ph.D., Turtles All the Way Down, February 2019\n\nOf course, Bitcoin may have a certain user base as a vehicle for money laundering and black market transactions, but that's an undesirable investment thesis. The vast majority of transactions are to exchange Bitcoin itself, though the New York Times did recently report that \"pornography, patio furniture, and an at-home coronavirus test are among the odd assortment of goods and services that people are purchasing with the cryptocurrency.\" So, basically, if your typical day consists of surfing porn on your patio while testing yourself for COVID, you're gonna want to look into Bitcoin.\nMy largest concern is that people are actually forking over hard-earned savings in exchange for these tokens, which allows early \"miners\" to cash out. That's essentially the defining feature of a Ponzi scheme. Like all speculative bubbles that rely on increases in price, rather than cash flows generated by the production of value-added goods and services, Bitcoin isn't actually creating \"wealth.\" It's only creating the opportunity for wealth transfer, primarily from those who will end up holding the bag.\nBitcoin has certain characteristics of base money in the sense that it's exchanged on an electronic ledger, but by design, transactions are limited to an average of about 2000 per block, with one block successfully validated, on average, every 10 minutes. In order to validate a transaction block, CPU farms across the world grind out terahashes of random SHA256 validation attempts in order to discover a sufficiently small binary that matches the cryptographic hash of the block.\nAll of this \"mining\" burns up about as much energy as it takes to run a modest-sized country. Validating a block of transactions produces a reward to the miner (and dilution of the coinbase) of 6.25 Bitcoin per block, which currently works out to nearly $200 per transaction. Yet the value of the median transaction in Bitcoin is only about $1000 in the first place.\nThere's a rather primitive regression analysis floating around (tagged as \"sophisticated\" by some observers who apparently go numb at the word \"logarithm\") that attempts to relate the log price of bitcoin to the log \"stock/flow\" ratio, as if it represents some mechanistic supply-demand relationship. Aside from the fact that the correlation between two diagonal lines is always about 0.9-something, I find that one can obtain a better fit just by regressing the log price of Bitcoin on the log ratio of block difficulty/block reward, which is basically a measure of how much energy one needs to waste in order to mine a new bitcoin.\nSo the \"value\" of Bitcoin is partially linked to the backward-looking sunk cost of the energy wasted to mine these tokens. Still, I wouldn't dream of using this sort of \"model\" to trade an object whose \"value\" is primarily in the heads of speculators. Use it if you like. If you happen make money on it, feel free send me a check, preferably in U.S. dollars.\nUndoubtedly, this view of Bitcoin will be unpopular among those who associate holding Bitcoin with superpowers like laser eyes and diamond hands. \"Not surprised Hussman doesn't get Bitcoin. Few do.\" M'kay. Look, there's certainly a case to be made that a speculative mindset creates its own reality, and while it does, there's an opportunity to obtain wealth transfers from frantic late-comers who can no longer tolerate missing out. Tulips gonna tulip. Not my gig, thanks.\n\n In the short run, it will be said to be an attack, motivated by either deficient understanding or uncontrolled envy, of the wonderful process of enrichment. Those involved with the speculation are experiencing an increase in wealth - getting rich or being further enriched. No one wishes to believe that this is fortuitous or undeserved; all wish to think that it is the result of their own superior insight or intuition. As long as they are in, they have a strong pecuniary commitment to belief in the unique personal intelligence that tells them there will be yet more. Accordingly, possession must be associated with some special genius. Speculation buys up, in a very practical way, the intelligence of those involved. Only after the speculative collapse does the truth emerge. What was thought to be unusual acuity turns out to be only a fortuitous and unfortunate association with the assets.\n\n\n - John Kenneth Galbraith, A Brief History of Financial Euphoria","news_type":1},"isVote":1,"tweetType":1,"viewCount":252,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":322226757,"gmtCreate":1615811975979,"gmtModify":1704786871213,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"Fubo ftw","listText":"Fubo ftw","text":"Fubo ftw","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/322226757","repostId":"1186863196","repostType":4,"repost":{"id":"1186863196","kind":"news","weMediaInfo":{"introduction":"Providing stock market headlines, business news, financials and earnings ","home_visible":1,"media_name":"Tiger Newspress","id":"1079075236","head_image":"https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba"},"pubTimestamp":1615811277,"share":"https://ttm.financial/m/news/1186863196?lang=&edition=fundamental","pubTime":"2021-03-15 20:27","market":"us","language":"en","title":"Toplines Before US Market Open on Monday","url":"https://stock-news.laohu8.com/highlight/detail?id=1186863196","media":"Tiger Newspress","summary":" U.S. futures and European stocks climbed, with investors focused on the strength of the global economic recovery and progress in delivering vaccines.Investors remain preoccupied with rising long-term borrowing costs and their implications for reflation trades and the rotation in the stock market from growth to value shares. The benchmark Treasury yield hovered around 1.62% on Monday.At 8:10 a.m. ET, Nasdaq 100 e-minis were up 8.25points, or 0.06%, S&P 500 e-minis were rose 3.75 points, or 0.10%","content":"<p>(March 15) U.S. futures and European stocks climbed, with investors&nbsp;focused on the strength of the global economic recovery and progress in&nbsp;delivering vaccines.</p><p>Investors remain preoccupied with rising long-term borrowing costs&nbsp;and their implications for reflation trades and the rotation in the stock&nbsp;market from growth to value shares. The benchmark Treasury yield hovered around&nbsp;1.62% on Monday.</p><p>At 8:10 a.m. ET, Nasdaq 100 e-minis were up 8.25points, or 0.06%,&nbsp;S&amp;P 500 e-minis were rose 3.75 points, or 0.10%, and Dow e-minis were up 96&nbsp;points, or 0.29%.</p><p><img src=\"https://static.tigerbbs.com/9e96bc779b77a5cd6e89a82e995f0855\" tg-width=\"1242\" tg-height=\"492\" referrerpolicy=\"no-referrer\"></p><p>*Source FromTiger&nbsp;Trade, EST 08:10</p><p>Markets are preoccupied with rising long-term borrowing costs and&nbsp;their implications for reflation trades and the rotation in the stock market&nbsp;from growth to value shares. The Federal Reserve decision later in the week is&nbsp;one of a slew due from central banks globally.</p><p><b>U.S. Market Last Week</b></p><p>Stocks rose last week with the Dow Jones Industrial Average rising&nbsp;4% and the S&amp;P 500 gaining 2.6%. The S&amp;P 500 and the Dow both closed at&nbsp;record highs Friday.</p><p>The Nasdaq Composite advanced 3% last week, despite a sell-off on&nbsp;Friday spurred by rising interest rates. The jump in bond yields has challenged&nbsp;growth stocks in recent weeks and sent investors into cyclical pockets of the&nbsp;market. The Nasdaq is up less than 1% this month, while the Dow and S&amp;P are&nbsp;up 6% and 3.5%, respectively.</p><p><img src=\"https://static.tigerbbs.com/48ee123fcc12c4606a850f78d8da1460\" tg-width=\"1242\" tg-height=\"583\" referrerpolicy=\"no-referrer\"></p><p>The U.S. 10-year Treasury hit its highest level in more than a year&nbsp;on Friday. The benchmark Treasury note reached 1.642%, its highest level since&nbsp;February 2020.</p><p><b>Stocks making the biggest moves in</b><b>&nbsp;the</b>&nbsp;<b>premarket&nbsp;trading</b></p><p>1) XPeng (XPEV) – XPeng got a&nbsp;$76.8 million investment from the provincial government in Guangdong, where the&nbsp;Chinese electric vehicle maker is based and has two manufacturing plants. XPeng&nbsp;added 4.2% in premarket action.</p><p>2) AMC Entertainment (AMC) – AMC will begin reopening movie theaters&nbsp;in Los Angeles, starting with two locations today. It plans to open the&nbsp;remaining 23 theaters in Los Angeles on Friday, and hopes to have all 56&nbsp;California locations open by then depending on local approvals. AMC jumped 8.7%&nbsp;in premarket trade.</p><p>3) NXP Semiconductors (NXPI), Penn National Gaming (PENN), Generac&nbsp;(GNRC), Caesars Entertainment (CZR) – The stocks will join the S&amp;P 500 as&nbsp;part of the index’s quarterly rebalancing. NXP jumped 8.1% in premarket&nbsp;trading, with Penn up 5.8%, Generac gaining 3.6% and Caesars climbing 4.8%.</p><p>4) Carnival (CCL) – Carnival CEO Arnold Donald told the Financial&nbsp;Times he sees at least two more tough years for the cruise industry. Donald&nbsp;said the cruise line operator’s full fleet might be sailing by the end of the&nbsp;year but that it will take at least until 2023 for revenue to return to&nbsp;pre-Covid levels. Carnival rose 1.2% in the premarket.</p><p>5) Ford Motor (F) – Ford will recall 2.9 million vehicles to check&nbsp;for potentially faulty driver-side Takata airbags. The National Highway Traffic&nbsp;Safety Administration had called on Ford to do so in January, and the automaker&nbsp;plans to begin notifying owners on April 1.</p><p>6) Gilead Sciences (GILD), Merck (MRK) – The drugmakers will study a&nbsp;combination of their experimental drugs to treat HIV. Gilead and Merck will&nbsp;look at the effectiveness of the drug cocktail even when taken only every few&nbsp;months.</p><p>7) Eli Lilly (LLY) – Eli Lilly said its experimental treatment for&nbsp;Alzheimer’s modestly slowed decline in patients over an 18-month period in a&nbsp;mid-stage study. Lilly has already begun a second study of the treatment. Lilly&nbsp;fell 5.3% in the premarket.</p><p>8) Lordstown Motors (RIDE) – Lordstown said it will issue a “full&nbsp;and thorough” statement in the coming days that the electric truck maker said&nbsp;would refute a critical report by short-seller Hindenburg Research. Lordstown&nbsp;has said the report contains “half-truths and lies.” Its shares rose 5.9% in&nbsp;premarket trading.</p><p>9) GenMark Diagnostics (GNMK) – GenMark will be bought by Swiss&nbsp;drugmaker Roche for $1.8 billion in cash, or $24.05 per share. Shares of the&nbsp;U.S.-based molecular diagnostic test maker had closed at $18.50 per share on&nbsp;Friday. GenMark surged 29.2% in premarket action.</p><p>10) Shaw Communications (SJR) – The Canadian communications company&nbsp;agreed to be bought by rival Rogers Communications for C$26B including debt&nbsp;($20.9B in US Dollars). Shaw’s U.S. shares surged 53% in the premarket.</p><p>11) Dollar General (DG) – The discount retailer was upgraded to&nbsp;“overweight” from “neutral” at Atlantic Equities, which cited valuation as well&nbsp;as a positive impact from stimulus check spending and continued market share&nbsp;gain.</p><p>12) AstraZeneca (AZN) – Ireland became the latest country to suspend&nbsp;the use of AstraZeneca’s Covid-19 vaccine, following reports out of Norway&nbsp;regarding blood clots in some patients. Officials said they took the action&nbsp;“out of an abundance of caution,” although AstraZeneca said its review of more&nbsp;than 17 million people showed no increased risk of blood clots.</p><p>13) United Airlines (UAL), American Airlines (AAL), Delta Air Lines&nbsp;(DAL), Southwest Airlines (LUV) – Airline stocks are gaining ground after the&nbsp;Transportation Safety Administration said airport screening levels are now at&nbsp;one-year highs. Separately, Southwest said passenger demand is continuing to&nbsp;improve this month. United was up 3% in the premarket, American gained 4.3%,&nbsp;Delta rose 2% and Southwest edged up 1.3%.</p><p>14) DraftKings (DKNG) – The sports betting company announced a&nbsp;proposed offering of $1 billion in convertible notes due in 2028. DraftKings&nbsp;fell 3.5% in premarket trade.</p><p>15) AstraZeneca Plc said that a review of safety data of more than&nbsp;17 million people vaccinated with its COVID-19 vaccine in the European Union&nbsp;and the United Kingdom showed no evidence of an increased risk of blood clots.</p><p>16) United States Steel Corporation issued profit forecast for the&nbsp;first quarter. The company said it expects Q1 adjusted earnings of $0.61 per&nbsp;share, versus analysts’ estimates of $0.73 per share.</p><p>17) Roche Holding AG said it has entered into a definitive agreement&nbsp;to acquire GenMark Diagnostics (NASDAQ:GNMK) for $24.05 per share in cash, or&nbsp;about $1.8 billion, on a fully diluted basis.</p><p><b>Economic calendar:</b></p><p><b>Monday:</b> Empire Manufacturing, March(14.5 expected, 12.1 in February); Total Net TIC Flows, January (-$0.6 billion&nbsp;in December); Net Long-Term TIC Flows, January ($121.0 billion in December)</p><p><b>Tuesday:</b>&nbsp;Import price index,&nbsp;month-over-month, February (1.0% expected, 1.4% in January); Import price index&nbsp;excluding petroleum, February (0.4% expected, 0.9% in January); Import price&nbsp;index year-over-year, February (2.6% expected, 0.9% in January); Export price&nbsp;index, month-over-month, February (0.9% expected, 2.5% in January); Export&nbsp;price index, year-over-year, February (2.3% in January); Retail sales advance&nbsp;month-over-month, February (-0.7% expected, 5.3% in January); Retail sales&nbsp;excluding autos and gas, month-over-month, February (-1.3% expected, 6.1% in&nbsp;January); Retail sales control group, February (-1.1% expected, 6.0% in&nbsp;January); Industrial production month-over-month, February (0.4% expected, 0.9%&nbsp;in January); Capacity utilization, February (75.6% in February, 75.6% in&nbsp;January); Manufacturing production, February (0.2% expected, 1.0% in January);&nbsp;Business inventories, January (0.3% expected, 0.6% in December); NAHB Housing&nbsp;Market index, March (84 expected, 84 in February)</p><p><b>Wednesday:</b>&nbsp;MBA Mortgage Applications,&nbsp;week ended March 12 (-1.3% during prior week); Building permits,&nbsp;month-over-month, February (-7.2% expected, 10.4% in January); Housing starts,&nbsp;February (-1.0% expected, -6.0% in January); FOMC Rate Decision</p><p><b>Thursday:</b>&nbsp;Initial jobless claims, week&nbsp;ended March 13 (703,000 expected, 712,000 during prior week); Continuing&nbsp;claims, week ended March 6 (4.144 million during prior week); Philadelphia Fed&nbsp;Business Outlook Index, March (24.0 expected, 23.1 in February); Leading Index,&nbsp;February (0.3% expected, 0.5% in January)</p><p><b>Friday:</b>&nbsp;N/A</p><p><b>Earnings calendar:</b></p><p><b>Monday:</b>&nbsp;N/A</p><p><b>Tuesday:</b>&nbsp;Coupa Software (COUP),&nbsp;CrowdStrike (CRWD), Lennar (LEN) after market close</p><p><b>Wednesday:</b> Green Thumb Industries&nbsp;(GTII.CN) after market close</p><p><b>Thursday:</b> Dollar General (DG) before&nbsp;market open; Nike (NKE), FedEx (FDX), Hims &amp; Hers Health (HIMS) after market&nbsp;close</p><p><b>Friday:</b>&nbsp;N/A</p><p><b>These are some key events this week:</b></p><p>Fed Chair Jerome Powell will likely reaffirm his no-tightening&nbsp;policy stance at the Fed policy meeting Wednesday.Bank of England rate decision&nbsp;Thursday. BOE is expected to leave monetary policy unchanged.Bank of Japan&nbsp;monetary policy decision and Governor Haruhiko Kuroda briefing Friday.</p><p><b>These are the main moves in markets:</b></p><p><b>Currencies</b></p><p>The Bloomberg Dollar Spot Index increased 0.1%.The euro sank 0.2% to&nbsp;$1.1929.The British pound was little changed at $1.392.The onshore yuan&nbsp;strengthened 0.1% to 6.504 per dollar.The Japanese yen weakened 0.1% to 109.13&nbsp;per dollar.</p><p><b>Bonds</b></p><p>The yield on 10-year Treasuries increased one basis point to&nbsp;1.63%.The yield on two-year Treasuries gained one basis point to&nbsp;0.16%.Germany’s 10-year yield was unchanged at -0.31%.Britain’s 10-year yield&nbsp;jumped two basis points to 0.839%.Japan’s 10-year yield fell one basis point to&nbsp;0.111%.</p><p><b>Commodities</b></p><p>West Texas Intermediate crude declined 0.2% to $65.50 a barrel.Brent&nbsp;crude decreased 0.1% to $69.12 a barrel.Gold strengthened 0.1% to $1,729.67 an&nbsp;ounce.</p><p>Elsewhere, oil climbed and Bitcoin slid below $60,000 after a&nbsp;weekend rally to a record. On the virus front, the U.S. is reporting fewer&nbsp;infections but countries from India to Italy are seeing a resurgence.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Toplines Before US Market Open on Monday</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nToplines Before US Market Open on Monday\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1079075236\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Tiger Newspress </p>\n<p class=\"h-time\">2021-03-15 20:27</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<p>(March 15) U.S. futures and European stocks climbed, with investors&nbsp;focused on the strength of the global economic recovery and progress in&nbsp;delivering vaccines.</p><p>Investors remain preoccupied with rising long-term borrowing costs&nbsp;and their implications for reflation trades and the rotation in the stock&nbsp;market from growth to value shares. The benchmark Treasury yield hovered around&nbsp;1.62% on Monday.</p><p>At 8:10 a.m. ET, Nasdaq 100 e-minis were up 8.25points, or 0.06%,&nbsp;S&amp;P 500 e-minis were rose 3.75 points, or 0.10%, and Dow e-minis were up 96&nbsp;points, or 0.29%.</p><p><img src=\"https://static.tigerbbs.com/9e96bc779b77a5cd6e89a82e995f0855\" tg-width=\"1242\" tg-height=\"492\" referrerpolicy=\"no-referrer\"></p><p>*Source FromTiger&nbsp;Trade, EST 08:10</p><p>Markets are preoccupied with rising long-term borrowing costs and&nbsp;their implications for reflation trades and the rotation in the stock market&nbsp;from growth to value shares. The Federal Reserve decision later in the week is&nbsp;one of a slew due from central banks globally.</p><p><b>U.S. Market Last Week</b></p><p>Stocks rose last week with the Dow Jones Industrial Average rising&nbsp;4% and the S&amp;P 500 gaining 2.6%. The S&amp;P 500 and the Dow both closed at&nbsp;record highs Friday.</p><p>The Nasdaq Composite advanced 3% last week, despite a sell-off on&nbsp;Friday spurred by rising interest rates. The jump in bond yields has challenged&nbsp;growth stocks in recent weeks and sent investors into cyclical pockets of the&nbsp;market. The Nasdaq is up less than 1% this month, while the Dow and S&amp;P are&nbsp;up 6% and 3.5%, respectively.</p><p><img src=\"https://static.tigerbbs.com/48ee123fcc12c4606a850f78d8da1460\" tg-width=\"1242\" tg-height=\"583\" referrerpolicy=\"no-referrer\"></p><p>The U.S. 10-year Treasury hit its highest level in more than a year&nbsp;on Friday. The benchmark Treasury note reached 1.642%, its highest level since&nbsp;February 2020.</p><p><b>Stocks making the biggest moves in</b><b>&nbsp;the</b>&nbsp;<b>premarket&nbsp;trading</b></p><p>1) XPeng (XPEV) – XPeng got a&nbsp;$76.8 million investment from the provincial government in Guangdong, where the&nbsp;Chinese electric vehicle maker is based and has two manufacturing plants. XPeng&nbsp;added 4.2% in premarket action.</p><p>2) AMC Entertainment (AMC) – AMC will begin reopening movie theaters&nbsp;in Los Angeles, starting with two locations today. It plans to open the&nbsp;remaining 23 theaters in Los Angeles on Friday, and hopes to have all 56&nbsp;California locations open by then depending on local approvals. AMC jumped 8.7%&nbsp;in premarket trade.</p><p>3) NXP Semiconductors (NXPI), Penn National Gaming (PENN), Generac&nbsp;(GNRC), Caesars Entertainment (CZR) – The stocks will join the S&amp;P 500 as&nbsp;part of the index’s quarterly rebalancing. NXP jumped 8.1% in premarket&nbsp;trading, with Penn up 5.8%, Generac gaining 3.6% and Caesars climbing 4.8%.</p><p>4) Carnival (CCL) – Carnival CEO Arnold Donald told the Financial&nbsp;Times he sees at least two more tough years for the cruise industry. Donald&nbsp;said the cruise line operator’s full fleet might be sailing by the end of the&nbsp;year but that it will take at least until 2023 for revenue to return to&nbsp;pre-Covid levels. Carnival rose 1.2% in the premarket.</p><p>5) Ford Motor (F) – Ford will recall 2.9 million vehicles to check&nbsp;for potentially faulty driver-side Takata airbags. The National Highway Traffic&nbsp;Safety Administration had called on Ford to do so in January, and the automaker&nbsp;plans to begin notifying owners on April 1.</p><p>6) Gilead Sciences (GILD), Merck (MRK) – The drugmakers will study a&nbsp;combination of their experimental drugs to treat HIV. Gilead and Merck will&nbsp;look at the effectiveness of the drug cocktail even when taken only every few&nbsp;months.</p><p>7) Eli Lilly (LLY) – Eli Lilly said its experimental treatment for&nbsp;Alzheimer’s modestly slowed decline in patients over an 18-month period in a&nbsp;mid-stage study. Lilly has already begun a second study of the treatment. Lilly&nbsp;fell 5.3% in the premarket.</p><p>8) Lordstown Motors (RIDE) – Lordstown said it will issue a “full&nbsp;and thorough” statement in the coming days that the electric truck maker said&nbsp;would refute a critical report by short-seller Hindenburg Research. Lordstown&nbsp;has said the report contains “half-truths and lies.” Its shares rose 5.9% in&nbsp;premarket trading.</p><p>9) GenMark Diagnostics (GNMK) – GenMark will be bought by Swiss&nbsp;drugmaker Roche for $1.8 billion in cash, or $24.05 per share. Shares of the&nbsp;U.S.-based molecular diagnostic test maker had closed at $18.50 per share on&nbsp;Friday. GenMark surged 29.2% in premarket action.</p><p>10) Shaw Communications (SJR) – The Canadian communications company&nbsp;agreed to be bought by rival Rogers Communications for C$26B including debt&nbsp;($20.9B in US Dollars). Shaw’s U.S. shares surged 53% in the premarket.</p><p>11) Dollar General (DG) – The discount retailer was upgraded to&nbsp;“overweight” from “neutral” at Atlantic Equities, which cited valuation as well&nbsp;as a positive impact from stimulus check spending and continued market share&nbsp;gain.</p><p>12) AstraZeneca (AZN) – Ireland became the latest country to suspend&nbsp;the use of AstraZeneca’s Covid-19 vaccine, following reports out of Norway&nbsp;regarding blood clots in some patients. Officials said they took the action&nbsp;“out of an abundance of caution,” although AstraZeneca said its review of more&nbsp;than 17 million people showed no increased risk of blood clots.</p><p>13) United Airlines (UAL), American Airlines (AAL), Delta Air Lines&nbsp;(DAL), Southwest Airlines (LUV) – Airline stocks are gaining ground after the&nbsp;Transportation Safety Administration said airport screening levels are now at&nbsp;one-year highs. Separately, Southwest said passenger demand is continuing to&nbsp;improve this month. United was up 3% in the premarket, American gained 4.3%,&nbsp;Delta rose 2% and Southwest edged up 1.3%.</p><p>14) DraftKings (DKNG) – The sports betting company announced a&nbsp;proposed offering of $1 billion in convertible notes due in 2028. DraftKings&nbsp;fell 3.5% in premarket trade.</p><p>15) AstraZeneca Plc said that a review of safety data of more than&nbsp;17 million people vaccinated with its COVID-19 vaccine in the European Union&nbsp;and the United Kingdom showed no evidence of an increased risk of blood clots.</p><p>16) United States Steel Corporation issued profit forecast for the&nbsp;first quarter. The company said it expects Q1 adjusted earnings of $0.61 per&nbsp;share, versus analysts’ estimates of $0.73 per share.</p><p>17) Roche Holding AG said it has entered into a definitive agreement&nbsp;to acquire GenMark Diagnostics (NASDAQ:GNMK) for $24.05 per share in cash, or&nbsp;about $1.8 billion, on a fully diluted basis.</p><p><b>Economic calendar:</b></p><p><b>Monday:</b> Empire Manufacturing, March(14.5 expected, 12.1 in February); Total Net TIC Flows, January (-$0.6 billion&nbsp;in December); Net Long-Term TIC Flows, January ($121.0 billion in December)</p><p><b>Tuesday:</b>&nbsp;Import price index,&nbsp;month-over-month, February (1.0% expected, 1.4% in January); Import price index&nbsp;excluding petroleum, February (0.4% expected, 0.9% in January); Import price&nbsp;index year-over-year, February (2.6% expected, 0.9% in January); Export price&nbsp;index, month-over-month, February (0.9% expected, 2.5% in January); Export&nbsp;price index, year-over-year, February (2.3% in January); Retail sales advance&nbsp;month-over-month, February (-0.7% expected, 5.3% in January); Retail sales&nbsp;excluding autos and gas, month-over-month, February (-1.3% expected, 6.1% in&nbsp;January); Retail sales control group, February (-1.1% expected, 6.0% in&nbsp;January); Industrial production month-over-month, February (0.4% expected, 0.9%&nbsp;in January); Capacity utilization, February (75.6% in February, 75.6% in&nbsp;January); Manufacturing production, February (0.2% expected, 1.0% in January);&nbsp;Business inventories, January (0.3% expected, 0.6% in December); NAHB Housing&nbsp;Market index, March (84 expected, 84 in February)</p><p><b>Wednesday:</b>&nbsp;MBA Mortgage Applications,&nbsp;week ended March 12 (-1.3% during prior week); Building permits,&nbsp;month-over-month, February (-7.2% expected, 10.4% in January); Housing starts,&nbsp;February (-1.0% expected, -6.0% in January); FOMC Rate Decision</p><p><b>Thursday:</b>&nbsp;Initial jobless claims, week&nbsp;ended March 13 (703,000 expected, 712,000 during prior week); Continuing&nbsp;claims, week ended March 6 (4.144 million during prior week); Philadelphia Fed&nbsp;Business Outlook Index, March (24.0 expected, 23.1 in February); Leading Index,&nbsp;February (0.3% expected, 0.5% in January)</p><p><b>Friday:</b>&nbsp;N/A</p><p><b>Earnings calendar:</b></p><p><b>Monday:</b>&nbsp;N/A</p><p><b>Tuesday:</b>&nbsp;Coupa Software (COUP),&nbsp;CrowdStrike (CRWD), Lennar (LEN) after market close</p><p><b>Wednesday:</b> Green Thumb Industries&nbsp;(GTII.CN) after market close</p><p><b>Thursday:</b> Dollar General (DG) before&nbsp;market open; Nike (NKE), FedEx (FDX), Hims &amp; Hers Health (HIMS) after market&nbsp;close</p><p><b>Friday:</b>&nbsp;N/A</p><p><b>These are some key events this week:</b></p><p>Fed Chair Jerome Powell will likely reaffirm his no-tightening&nbsp;policy stance at the Fed policy meeting Wednesday.Bank of England rate decision&nbsp;Thursday. BOE is expected to leave monetary policy unchanged.Bank of Japan&nbsp;monetary policy decision and Governor Haruhiko Kuroda briefing Friday.</p><p><b>These are the main moves in markets:</b></p><p><b>Currencies</b></p><p>The Bloomberg Dollar Spot Index increased 0.1%.The euro sank 0.2% to&nbsp;$1.1929.The British pound was little changed at $1.392.The onshore yuan&nbsp;strengthened 0.1% to 6.504 per dollar.The Japanese yen weakened 0.1% to 109.13&nbsp;per dollar.</p><p><b>Bonds</b></p><p>The yield on 10-year Treasuries increased one basis point to&nbsp;1.63%.The yield on two-year Treasuries gained one basis point to&nbsp;0.16%.Germany’s 10-year yield was unchanged at -0.31%.Britain’s 10-year yield&nbsp;jumped two basis points to 0.839%.Japan’s 10-year yield fell one basis point to&nbsp;0.111%.</p><p><b>Commodities</b></p><p>West Texas Intermediate crude declined 0.2% to $65.50 a barrel.Brent&nbsp;crude decreased 0.1% to $69.12 a barrel.Gold strengthened 0.1% to $1,729.67 an&nbsp;ounce.</p><p>Elsewhere, oil climbed and Bitcoin slid below $60,000 after a&nbsp;weekend rally to a record. On the virus front, the U.S. is reporting fewer&nbsp;infections but countries from India to Italy are seeing a resurgence.</p>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1186863196","content_text":"(March 15) U.S. futures and European stocks climbed, with investors focused on the strength of the global economic recovery and progress in delivering vaccines.Investors remain preoccupied with rising long-term borrowing costs and their implications for reflation trades and the rotation in the stock market from growth to value shares. The benchmark Treasury yield hovered around 1.62% on Monday.At 8:10 a.m. ET, Nasdaq 100 e-minis were up 8.25points, or 0.06%, S&P 500 e-minis were rose 3.75 points, or 0.10%, and Dow e-minis were up 96 points, or 0.29%.*Source FromTiger Trade, EST 08:10Markets are preoccupied with rising long-term borrowing costs and their implications for reflation trades and the rotation in the stock market from growth to value shares. The Federal Reserve decision later in the week is one of a slew due from central banks globally.U.S. Market Last WeekStocks rose last week with the Dow Jones Industrial Average rising 4% and the S&P 500 gaining 2.6%. The S&P 500 and the Dow both closed at record highs Friday.The Nasdaq Composite advanced 3% last week, despite a sell-off on Friday spurred by rising interest rates. The jump in bond yields has challenged growth stocks in recent weeks and sent investors into cyclical pockets of the market. The Nasdaq is up less than 1% this month, while the Dow and S&P are up 6% and 3.5%, respectively.The U.S. 10-year Treasury hit its highest level in more than a year on Friday. The benchmark Treasury note reached 1.642%, its highest level since February 2020.Stocks making the biggest moves in the premarket trading1) XPeng (XPEV) – XPeng got a $76.8 million investment from the provincial government in Guangdong, where the Chinese electric vehicle maker is based and has two manufacturing plants. XPeng added 4.2% in premarket action.2) AMC Entertainment (AMC) – AMC will begin reopening movie theaters in Los Angeles, starting with two locations today. It plans to open the remaining 23 theaters in Los Angeles on Friday, and hopes to have all 56 California locations open by then depending on local approvals. AMC jumped 8.7% in premarket trade.3) NXP Semiconductors (NXPI), Penn National Gaming (PENN), Generac (GNRC), Caesars Entertainment (CZR) – The stocks will join the S&P 500 as part of the index’s quarterly rebalancing. NXP jumped 8.1% in premarket trading, with Penn up 5.8%, Generac gaining 3.6% and Caesars climbing 4.8%.4) Carnival (CCL) – Carnival CEO Arnold Donald told the Financial Times he sees at least two more tough years for the cruise industry. Donald said the cruise line operator’s full fleet might be sailing by the end of the year but that it will take at least until 2023 for revenue to return to pre-Covid levels. Carnival rose 1.2% in the premarket.5) Ford Motor (F) – Ford will recall 2.9 million vehicles to check for potentially faulty driver-side Takata airbags. The National Highway Traffic Safety Administration had called on Ford to do so in January, and the automaker plans to begin notifying owners on April 1.6) Gilead Sciences (GILD), Merck (MRK) – The drugmakers will study a combination of their experimental drugs to treat HIV. Gilead and Merck will look at the effectiveness of the drug cocktail even when taken only every few months.7) Eli Lilly (LLY) – Eli Lilly said its experimental treatment for Alzheimer’s modestly slowed decline in patients over an 18-month period in a mid-stage study. Lilly has already begun a second study of the treatment. Lilly fell 5.3% in the premarket.8) Lordstown Motors (RIDE) – Lordstown said it will issue a “full and thorough” statement in the coming days that the electric truck maker said would refute a critical report by short-seller Hindenburg Research. Lordstown has said the report contains “half-truths and lies.” Its shares rose 5.9% in premarket trading.9) GenMark Diagnostics (GNMK) – GenMark will be bought by Swiss drugmaker Roche for $1.8 billion in cash, or $24.05 per share. Shares of the U.S.-based molecular diagnostic test maker had closed at $18.50 per share on Friday. GenMark surged 29.2% in premarket action.10) Shaw Communications (SJR) – The Canadian communications company agreed to be bought by rival Rogers Communications for C$26B including debt ($20.9B in US Dollars). Shaw’s U.S. shares surged 53% in the premarket.11) Dollar General (DG) – The discount retailer was upgraded to “overweight” from “neutral” at Atlantic Equities, which cited valuation as well as a positive impact from stimulus check spending and continued market share gain.12) AstraZeneca (AZN) – Ireland became the latest country to suspend the use of AstraZeneca’s Covid-19 vaccine, following reports out of Norway regarding blood clots in some patients. Officials said they took the action “out of an abundance of caution,” although AstraZeneca said its review of more than 17 million people showed no increased risk of blood clots.13) United Airlines (UAL), American Airlines (AAL), Delta Air Lines (DAL), Southwest Airlines (LUV) – Airline stocks are gaining ground after the Transportation Safety Administration said airport screening levels are now at one-year highs. Separately, Southwest said passenger demand is continuing to improve this month. United was up 3% in the premarket, American gained 4.3%, Delta rose 2% and Southwest edged up 1.3%.14) DraftKings (DKNG) – The sports betting company announced a proposed offering of $1 billion in convertible notes due in 2028. DraftKings fell 3.5% in premarket trade.15) AstraZeneca Plc said that a review of safety data of more than 17 million people vaccinated with its COVID-19 vaccine in the European Union and the United Kingdom showed no evidence of an increased risk of blood clots.16) United States Steel Corporation issued profit forecast for the first quarter. The company said it expects Q1 adjusted earnings of $0.61 per share, versus analysts’ estimates of $0.73 per share.17) Roche Holding AG said it has entered into a definitive agreement to acquire GenMark Diagnostics (NASDAQ:GNMK) for $24.05 per share in cash, or about $1.8 billion, on a fully diluted basis.Economic calendar:Monday: Empire Manufacturing, March(14.5 expected, 12.1 in February); Total Net TIC Flows, January (-$0.6 billion in December); Net Long-Term TIC Flows, January ($121.0 billion in December)Tuesday: Import price index, month-over-month, February (1.0% expected, 1.4% in January); Import price index excluding petroleum, February (0.4% expected, 0.9% in January); Import price index year-over-year, February (2.6% expected, 0.9% in January); Export price index, month-over-month, February (0.9% expected, 2.5% in January); Export price index, year-over-year, February (2.3% in January); Retail sales advance month-over-month, February (-0.7% expected, 5.3% in January); Retail sales excluding autos and gas, month-over-month, February (-1.3% expected, 6.1% in January); Retail sales control group, February (-1.1% expected, 6.0% in January); Industrial production month-over-month, February (0.4% expected, 0.9% in January); Capacity utilization, February (75.6% in February, 75.6% in January); Manufacturing production, February (0.2% expected, 1.0% in January); Business inventories, January (0.3% expected, 0.6% in December); NAHB Housing Market index, March (84 expected, 84 in February)Wednesday: MBA Mortgage Applications, week ended March 12 (-1.3% during prior week); Building permits, month-over-month, February (-7.2% expected, 10.4% in January); Housing starts, February (-1.0% expected, -6.0% in January); FOMC Rate DecisionThursday: Initial jobless claims, week ended March 13 (703,000 expected, 712,000 during prior week); Continuing claims, week ended March 6 (4.144 million during prior week); Philadelphia Fed Business Outlook Index, March (24.0 expected, 23.1 in February); Leading Index, February (0.3% expected, 0.5% in January)Friday: N/AEarnings calendar:Monday: N/ATuesday: Coupa Software (COUP), CrowdStrike (CRWD), Lennar (LEN) after market closeWednesday: Green Thumb Industries (GTII.CN) after market closeThursday: Dollar General (DG) before market open; Nike (NKE), FedEx (FDX), Hims & Hers Health (HIMS) after market closeFriday: N/AThese are some key events this week:Fed Chair Jerome Powell will likely reaffirm his no-tightening policy stance at the Fed policy meeting Wednesday.Bank of England rate decision Thursday. BOE is expected to leave monetary policy unchanged.Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing Friday.These are the main moves in markets:CurrenciesThe Bloomberg Dollar Spot Index increased 0.1%.The euro sank 0.2% to $1.1929.The British pound was little changed at $1.392.The onshore yuan strengthened 0.1% to 6.504 per dollar.The Japanese yen weakened 0.1% to 109.13 per dollar.BondsThe yield on 10-year Treasuries increased one basis point to 1.63%.The yield on two-year Treasuries gained one basis point to 0.16%.Germany’s 10-year yield was unchanged at -0.31%.Britain’s 10-year yield jumped two basis points to 0.839%.Japan’s 10-year yield fell one basis point to 0.111%.CommoditiesWest Texas Intermediate crude declined 0.2% to $65.50 a barrel.Brent crude decreased 0.1% to $69.12 a barrel.Gold strengthened 0.1% to $1,729.67 an ounce.Elsewhere, oil climbed and Bitcoin slid below $60,000 after a weekend rally to a record. On the virus front, the U.S. is reporting fewer infections but countries from India to Italy are seeing a resurgence.","news_type":1},"isVote":1,"tweetType":1,"viewCount":280,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":322971317,"gmtCreate":1615770335439,"gmtModify":1704786225415,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"Seriously?","listText":"Seriously?","text":"Seriously?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/322971317","repostId":"1177248020","repostType":4,"repost":{"id":"1177248020","kind":"news","pubTimestamp":1615769942,"share":"https://ttm.financial/m/news/1177248020?lang=&edition=fundamental","pubTime":"2021-03-15 08:59","market":"fut","language":"en","title":"‘There will be no peace’ until 10-year Treasury yield hits 2%, strategist says","url":"https://stock-news.laohu8.com/highlight/detail?id=1177248020","media":"MarketWatch","summary":"Futile to fight rising U.S. dollar while yields remain on rise: Soc Gen’s Juckes\nA bond market sello","content":"<p>Futile to fight rising U.S. dollar while yields remain on rise: Soc Gen’s Juckes</p>\n<p>A bond market selloff is calling the tune across financial markets, including for foreign exchange. Equilibrium is unlikely to return until the yield on the benchmark 10-year U.S. Treasury note hits 2%, argued one well-known analyst on Friday.</p>\n<p>“There will be no peace until U.S. 10s reach 2%,” said Kit Juckes, global macro strategist at Société Générale, in a note.</p>\n<p>A pair of U.S. government bond auctions, which had been a source of nervousness, went off without any major problems over the past week, with yields settling into a new and higher range, Juckes said. The 10-year Treasury yield&nbsp;rose 8.3 basis points to 1.634% last week. Yields and bond prices move in opposite directions.</p>\n<p>Rising yields have triggered rotation away from growth-oriented stocks, including large-cap, tech-related shares, into more cyclically sensitive and often value-oriented stocks and sectors. The tech-heavy Nasdaq Composite&nbsp;slipped into correction territory, defined as pullback of 10% from a recent peak, as yields continued to climb, while the S&amp;P 500&nbsp;and Dow Jones Industrial Average&nbsp;have traded at records. All three benchmarks finished positive on the week, with the Nasdaq bouncing on days when the climb in yields relented.</p>\n<p>The rising yields have resulted in renewed strength for the dollar, which Juckes said he wasn’t eager to fight at the moment. The ICE U.S. Dollar Index,a measure of the currency against a basket of six major rivals, was up 0.3% Friday and has gained 0.9% so far in March.</p>\n<p>“The pattern seems clear enough: The equity market is seeing a sector rotation but not a correction; the bond market is seeking a new equilibrium in the light of a vastly improved economic outlook in both the U.S. and elsewhere; some policy makers are pushing back against the bond moves, with little success,” Juckes wrote.</p>\n<p>“As yields rise, the dollar rallies, but when yields settle at a new level, the dollar drops back. The pattern probably goes on until bonds find an equilibrium, unlikely before 10-year note yields have a 2-handle, judging by taper tantrums and past cycles,” he said.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4ad831db163402d8e89e30e64ad84ff5\" tg-width=\"1259\" tg-height=\"449\"><span>SOCIETE GENERALE</span></p>\n<p>Meanwhile, the dollar/Japanese yen&nbsp;and euro/Swiss franc&nbsp;currency pairs are the most sensitive to higher Treasury yields (see chart above), Juckes said, noting that dollar/yen typically correlates more closely with real, or inflation-adjusted, US. yields than nominal rates, while euro/Swiss franc tends to track more closely with nominal yields.</p>\n<p>Instead, this year has seen all four — real and nominal yields, dollar/yen and euro/Swissfranc — move higher largely in lockstep, he said.</p>\n<p>“ While U.S. yields rise, EUR/CHF and USD/JPY are likely to go on trending higher, too, at least while the momentum is this strong. If we get to 2% 10-year note yields in the coming weeks, dumb extrapolation could take USD/JPY to 111, and EUR/CHF to 0.96,” he said. “Maybe too simplistic, but these moves are too strong to fight in the short-term.”</p>","source":"market_watch","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>‘There will be no peace’ until 10-year Treasury yield hits 2%, strategist says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n‘There will be no peace’ until 10-year Treasury yield hits 2%, strategist says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-15 08:59 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/no-peace-for-markets-until-10-year-treasury-yield-hits-2-strategist-says-11615577089?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Futile to fight rising U.S. dollar while yields remain on rise: Soc Gen’s Juckes\nA bond market selloff is calling the tune across financial markets, including for foreign exchange. Equilibrium is ...</p>\n\n<a href=\"https://www.marketwatch.com/story/no-peace-for-markets-until-10-year-treasury-yield-hits-2-strategist-says-11615577089?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://www.marketwatch.com/story/no-peace-for-markets-until-10-year-treasury-yield-hits-2-strategist-says-11615577089?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/599a65733b8245fcf7868668ef9ad712","article_id":"1177248020","content_text":"Futile to fight rising U.S. dollar while yields remain on rise: Soc Gen’s Juckes\nA bond market selloff is calling the tune across financial markets, including for foreign exchange. Equilibrium is unlikely to return until the yield on the benchmark 10-year U.S. Treasury note hits 2%, argued one well-known analyst on Friday.\n“There will be no peace until U.S. 10s reach 2%,” said Kit Juckes, global macro strategist at Société Générale, in a note.\nA pair of U.S. government bond auctions, which had been a source of nervousness, went off without any major problems over the past week, with yields settling into a new and higher range, Juckes said. The 10-year Treasury yield rose 8.3 basis points to 1.634% last week. Yields and bond prices move in opposite directions.\nRising yields have triggered rotation away from growth-oriented stocks, including large-cap, tech-related shares, into more cyclically sensitive and often value-oriented stocks and sectors. The tech-heavy Nasdaq Composite slipped into correction territory, defined as pullback of 10% from a recent peak, as yields continued to climb, while the S&P 500 and Dow Jones Industrial Average have traded at records. All three benchmarks finished positive on the week, with the Nasdaq bouncing on days when the climb in yields relented.\nThe rising yields have resulted in renewed strength for the dollar, which Juckes said he wasn’t eager to fight at the moment. The ICE U.S. Dollar Index,a measure of the currency against a basket of six major rivals, was up 0.3% Friday and has gained 0.9% so far in March.\n“The pattern seems clear enough: The equity market is seeing a sector rotation but not a correction; the bond market is seeking a new equilibrium in the light of a vastly improved economic outlook in both the U.S. and elsewhere; some policy makers are pushing back against the bond moves, with little success,” Juckes wrote.\n“As yields rise, the dollar rallies, but when yields settle at a new level, the dollar drops back. The pattern probably goes on until bonds find an equilibrium, unlikely before 10-year note yields have a 2-handle, judging by taper tantrums and past cycles,” he said.\nSOCIETE GENERALE\nMeanwhile, the dollar/Japanese yen and euro/Swiss franc currency pairs are the most sensitive to higher Treasury yields (see chart above), Juckes said, noting that dollar/yen typically correlates more closely with real, or inflation-adjusted, US. yields than nominal rates, while euro/Swiss franc tends to track more closely with nominal yields.\nInstead, this year has seen all four — real and nominal yields, dollar/yen and euro/Swissfranc — move higher largely in lockstep, he said.\n“ While U.S. yields rise, EUR/CHF and USD/JPY are likely to go on trending higher, too, at least while the momentum is this strong. If we get to 2% 10-year note yields in the coming weeks, dumb extrapolation could take USD/JPY to 111, and EUR/CHF to 0.96,” he said. “Maybe too simplistic, but these moves are too strong to fight in the short-term.”","news_type":1},"isVote":1,"tweetType":1,"viewCount":508,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":328507268,"gmtCreate":1615537445254,"gmtModify":1704784245276,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"Nice","listText":"Nice","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/328507268","repostId":"2118953819","repostType":4,"repost":{"id":"2118953819","kind":"news","pubTimestamp":1615531690,"share":"https://ttm.financial/m/news/2118953819?lang=&edition=fundamental","pubTime":"2021-03-12 14:48","market":"sg","language":"en","title":"Tencent and Baidu Fined by Antitrust Regulator For Previous Deals","url":"https://stock-news.laohu8.com/highlight/detail?id=2118953819","media":"Bloomberg","summary":"Regulator handed out penalties in review of 10 previous deals\nDidi, ByteDance units also censured fo","content":"<ul>\n <li>Regulator handed out penalties in review of 10 previous deals</li>\n <li>Didi, ByteDance units also censured for earlier joint ventures</li>\n</ul>\n<p>China’s antitrust regulator issued fines against some of its largest tech giants including Tencent Holdings Ltd., Baidu Inc. and Didi Chuxing for past acquisitions and investments as it stepped up its crackdown on the sector.</p>\n<p>Pony Ma’s Tencent is being fined for 500,000 yuan ($77,000) for its 2018 investment in online education app Yuanfudao, according to a statement by the State Administration for Market Regulation on Friday. Baidu was fined the same amount for its 2014 takeover of Ainemo Inc., a maker of consumer electronics including voice-controlled speakers. The firms are being censured for not seeking prior approvals for the deals -- a violation of country’s anti-monopoly laws -- though the regulator had determined the deals themselves aren’t anti-competitive.</p>\n<p>Tencent and Baidu join fellow behemoth Alibaba Group Holding Ltd. in coming under fire from the country’s powerful antitrust regulator, as Beijing steps up efforts to rein in its once free-wheeling technology industry. The regulator had last year issued fines against Alibaba as well as Tencent unit China Literature Ltd. for similar violations.</p>\n<p>“The message is clear that seeking government approvals in deals like these are a must.” said Ye Han, a partner at Beijing-based law firm Merits &amp; Tree, who specializes in antitrust and M&amp;A. “While we haven’t seen cases where companies got broke up or mergers got unwinded, such evaluations are likely going on behind the scene.”</p>\n<p>Didi Mobility Pte, a unit of ridehailing giant Didi Chuxing, and Japan’s&nbsp;SoftBank Corp.&nbsp;were also issued fines of 500,000 yuan each -- the maximum penalty possible -- for setting up a joint venture without permission. A ByteDance unit and its partner Shanghai Dongfang Newspaper Co. were also penalized the same amounts for a 2019&nbsp;partnership&nbsp;that created a video-copyright venture. ByteDance said the joint venture has since been canceled.</p>\n<p>Technology companies like Tencent had previously carried out mega mergers and acquisitions through so-called Variable Interest Entity structures, which operate on shaky legal grounds. The new antitrust rules, accompanied by the fines handed down by the regulators, are a signal VIEs are now under their oversight.</p>\n<blockquote>\n What Bloomberg Intelligence SaysTencent’s ability to strengthen its domestic ecosystem through M&amp;A may be significantly weakened on rising anti-monopoly scrutiny, underlined by a 500,000 yuan fine by the State Administration for Market Regulation on March 12 for failing to seek approval for its investment in online education platform Yuanfudao in 2018. While the amount is immaterial to Tencent, retroactive application of new anti-competitive rules announced in November may be a stern warning to toe the line in future.\n</blockquote>\n<blockquote>\n -- Vey-Sern Ling and Tiffany Tam, analysts\n</blockquote>\n<p>Other companies that were penalized in the latest round include&nbsp;TAL Education Group&nbsp;and&nbsp;Intime Retail Group Co.</p>","source":"lsy1584095487587","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tencent and Baidu Fined by Antitrust Regulator For Previous Deals</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTencent and Baidu Fined by Antitrust Regulator For Previous Deals\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-12 14:48 GMT+8&nbsp;&nbsp;&nbsp;<a href=http://bloomberg.com/news/articles/2021-03-12/tencent-baidu-fined-by-antitrust-regulator-for-previous-deals?srnd=premium-asia><strong>Bloomberg</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Regulator handed out penalties in review of 10 previous deals\nDidi, ByteDance units also censured for earlier joint ventures\n\nChina’s antitrust regulator issued fines against some of its largest tech ...</p>\n\n<a href=\"http://bloomberg.com/news/articles/2021-03-12/tencent-baidu-fined-by-antitrust-regulator-for-previous-deals?srnd=premium-asia\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BABA":"阿里巴巴","BIDU":"百度","TAL":"好未来","K3SD.SI":"u BIDU ADR US$+","09888":"百度集团-SW","00700":"腾讯控股","SOBKY":"Softbank Corp.","QNETCN":"纳斯达克中美互联网老虎指数","PIAHY":"Ping An Healthcare & Technology Co Ltd.","PANHF":"Ping An Healthcare & Technology Co Ltd.","TCEHY":"腾讯控股ADR"},"source_url":"http://bloomberg.com/news/articles/2021-03-12/tencent-baidu-fined-by-antitrust-regulator-for-previous-deals?srnd=premium-asia","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2118953819","content_text":"Regulator handed out penalties in review of 10 previous deals\nDidi, ByteDance units also censured for earlier joint ventures\n\nChina’s antitrust regulator issued fines against some of its largest tech giants including Tencent Holdings Ltd., Baidu Inc. and Didi Chuxing for past acquisitions and investments as it stepped up its crackdown on the sector.\nPony Ma’s Tencent is being fined for 500,000 yuan ($77,000) for its 2018 investment in online education app Yuanfudao, according to a statement by the State Administration for Market Regulation on Friday. Baidu was fined the same amount for its 2014 takeover of Ainemo Inc., a maker of consumer electronics including voice-controlled speakers. The firms are being censured for not seeking prior approvals for the deals -- a violation of country’s anti-monopoly laws -- though the regulator had determined the deals themselves aren’t anti-competitive.\nTencent and Baidu join fellow behemoth Alibaba Group Holding Ltd. in coming under fire from the country’s powerful antitrust regulator, as Beijing steps up efforts to rein in its once free-wheeling technology industry. The regulator had last year issued fines against Alibaba as well as Tencent unit China Literature Ltd. for similar violations.\n“The message is clear that seeking government approvals in deals like these are a must.” said Ye Han, a partner at Beijing-based law firm Merits & Tree, who specializes in antitrust and M&A. “While we haven’t seen cases where companies got broke up or mergers got unwinded, such evaluations are likely going on behind the scene.”\nDidi Mobility Pte, a unit of ridehailing giant Didi Chuxing, and Japan’s SoftBank Corp. were also issued fines of 500,000 yuan each -- the maximum penalty possible -- for setting up a joint venture without permission. A ByteDance unit and its partner Shanghai Dongfang Newspaper Co. were also penalized the same amounts for a 2019 partnership that created a video-copyright venture. ByteDance said the joint venture has since been canceled.\nTechnology companies like Tencent had previously carried out mega mergers and acquisitions through so-called Variable Interest Entity structures, which operate on shaky legal grounds. The new antitrust rules, accompanied by the fines handed down by the regulators, are a signal VIEs are now under their oversight.\n\n What Bloomberg Intelligence SaysTencent’s ability to strengthen its domestic ecosystem through M&A may be significantly weakened on rising anti-monopoly scrutiny, underlined by a 500,000 yuan fine by the State Administration for Market Regulation on March 12 for failing to seek approval for its investment in online education platform Yuanfudao in 2018. While the amount is immaterial to Tencent, retroactive application of new anti-competitive rules announced in November may be a stern warning to toe the line in future.\n\n\n -- Vey-Sern Ling and Tiffany Tam, analysts\n\nOther companies that were penalized in the latest round include TAL Education Group and Intime Retail Group Co.","news_type":1},"isVote":1,"tweetType":1,"viewCount":327,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":322971317,"gmtCreate":1615770335439,"gmtModify":1704786225415,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"Seriously?","listText":"Seriously?","text":"Seriously?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/322971317","repostId":"1177248020","repostType":4,"repost":{"id":"1177248020","kind":"news","pubTimestamp":1615769942,"share":"https://ttm.financial/m/news/1177248020?lang=&edition=fundamental","pubTime":"2021-03-15 08:59","market":"fut","language":"en","title":"‘There will be no peace’ until 10-year Treasury yield hits 2%, strategist says","url":"https://stock-news.laohu8.com/highlight/detail?id=1177248020","media":"MarketWatch","summary":"Futile to fight rising U.S. dollar while yields remain on rise: Soc Gen’s Juckes\nA bond market sello","content":"<p>Futile to fight rising U.S. dollar while yields remain on rise: Soc Gen’s Juckes</p>\n<p>A bond market selloff is calling the tune across financial markets, including for foreign exchange. Equilibrium is unlikely to return until the yield on the benchmark 10-year U.S. Treasury note hits 2%, argued one well-known analyst on Friday.</p>\n<p>“There will be no peace until U.S. 10s reach 2%,” said Kit Juckes, global macro strategist at Société Générale, in a note.</p>\n<p>A pair of U.S. government bond auctions, which had been a source of nervousness, went off without any major problems over the past week, with yields settling into a new and higher range, Juckes said. The 10-year Treasury yield&nbsp;rose 8.3 basis points to 1.634% last week. Yields and bond prices move in opposite directions.</p>\n<p>Rising yields have triggered rotation away from growth-oriented stocks, including large-cap, tech-related shares, into more cyclically sensitive and often value-oriented stocks and sectors. The tech-heavy Nasdaq Composite&nbsp;slipped into correction territory, defined as pullback of 10% from a recent peak, as yields continued to climb, while the S&amp;P 500&nbsp;and Dow Jones Industrial Average&nbsp;have traded at records. All three benchmarks finished positive on the week, with the Nasdaq bouncing on days when the climb in yields relented.</p>\n<p>The rising yields have resulted in renewed strength for the dollar, which Juckes said he wasn’t eager to fight at the moment. The ICE U.S. Dollar Index,a measure of the currency against a basket of six major rivals, was up 0.3% Friday and has gained 0.9% so far in March.</p>\n<p>“The pattern seems clear enough: The equity market is seeing a sector rotation but not a correction; the bond market is seeking a new equilibrium in the light of a vastly improved economic outlook in both the U.S. and elsewhere; some policy makers are pushing back against the bond moves, with little success,” Juckes wrote.</p>\n<p>“As yields rise, the dollar rallies, but when yields settle at a new level, the dollar drops back. The pattern probably goes on until bonds find an equilibrium, unlikely before 10-year note yields have a 2-handle, judging by taper tantrums and past cycles,” he said.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4ad831db163402d8e89e30e64ad84ff5\" tg-width=\"1259\" tg-height=\"449\"><span>SOCIETE GENERALE</span></p>\n<p>Meanwhile, the dollar/Japanese yen&nbsp;and euro/Swiss franc&nbsp;currency pairs are the most sensitive to higher Treasury yields (see chart above), Juckes said, noting that dollar/yen typically correlates more closely with real, or inflation-adjusted, US. yields than nominal rates, while euro/Swiss franc tends to track more closely with nominal yields.</p>\n<p>Instead, this year has seen all four — real and nominal yields, dollar/yen and euro/Swissfranc — move higher largely in lockstep, he said.</p>\n<p>“ While U.S. yields rise, EUR/CHF and USD/JPY are likely to go on trending higher, too, at least while the momentum is this strong. If we get to 2% 10-year note yields in the coming weeks, dumb extrapolation could take USD/JPY to 111, and EUR/CHF to 0.96,” he said. “Maybe too simplistic, but these moves are too strong to fight in the short-term.”</p>","source":"market_watch","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>‘There will be no peace’ until 10-year Treasury yield hits 2%, strategist says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n‘There will be no peace’ until 10-year Treasury yield hits 2%, strategist says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-15 08:59 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/no-peace-for-markets-until-10-year-treasury-yield-hits-2-strategist-says-11615577089?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Futile to fight rising U.S. dollar while yields remain on rise: Soc Gen’s Juckes\nA bond market selloff is calling the tune across financial markets, including for foreign exchange. Equilibrium is ...</p>\n\n<a href=\"https://www.marketwatch.com/story/no-peace-for-markets-until-10-year-treasury-yield-hits-2-strategist-says-11615577089?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://www.marketwatch.com/story/no-peace-for-markets-until-10-year-treasury-yield-hits-2-strategist-says-11615577089?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/599a65733b8245fcf7868668ef9ad712","article_id":"1177248020","content_text":"Futile to fight rising U.S. dollar while yields remain on rise: Soc Gen’s Juckes\nA bond market selloff is calling the tune across financial markets, including for foreign exchange. Equilibrium is unlikely to return until the yield on the benchmark 10-year U.S. Treasury note hits 2%, argued one well-known analyst on Friday.\n“There will be no peace until U.S. 10s reach 2%,” said Kit Juckes, global macro strategist at Société Générale, in a note.\nA pair of U.S. government bond auctions, which had been a source of nervousness, went off without any major problems over the past week, with yields settling into a new and higher range, Juckes said. The 10-year Treasury yield rose 8.3 basis points to 1.634% last week. Yields and bond prices move in opposite directions.\nRising yields have triggered rotation away from growth-oriented stocks, including large-cap, tech-related shares, into more cyclically sensitive and often value-oriented stocks and sectors. The tech-heavy Nasdaq Composite slipped into correction territory, defined as pullback of 10% from a recent peak, as yields continued to climb, while the S&P 500 and Dow Jones Industrial Average have traded at records. All three benchmarks finished positive on the week, with the Nasdaq bouncing on days when the climb in yields relented.\nThe rising yields have resulted in renewed strength for the dollar, which Juckes said he wasn’t eager to fight at the moment. The ICE U.S. Dollar Index,a measure of the currency against a basket of six major rivals, was up 0.3% Friday and has gained 0.9% so far in March.\n“The pattern seems clear enough: The equity market is seeing a sector rotation but not a correction; the bond market is seeking a new equilibrium in the light of a vastly improved economic outlook in both the U.S. and elsewhere; some policy makers are pushing back against the bond moves, with little success,” Juckes wrote.\n“As yields rise, the dollar rallies, but when yields settle at a new level, the dollar drops back. The pattern probably goes on until bonds find an equilibrium, unlikely before 10-year note yields have a 2-handle, judging by taper tantrums and past cycles,” he said.\nSOCIETE GENERALE\nMeanwhile, the dollar/Japanese yen and euro/Swiss franc currency pairs are the most sensitive to higher Treasury yields (see chart above), Juckes said, noting that dollar/yen typically correlates more closely with real, or inflation-adjusted, US. yields than nominal rates, while euro/Swiss franc tends to track more closely with nominal yields.\nInstead, this year has seen all four — real and nominal yields, dollar/yen and euro/Swissfranc — move higher largely in lockstep, he said.\n“ While U.S. yields rise, EUR/CHF and USD/JPY are likely to go on trending higher, too, at least while the momentum is this strong. If we get to 2% 10-year note yields in the coming weeks, dumb extrapolation could take USD/JPY to 111, and EUR/CHF to 0.96,” he said. “Maybe too simplistic, but these moves are too strong to fight in the short-term.”","news_type":1},"isVote":1,"tweetType":1,"viewCount":508,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":353310017,"gmtCreate":1616460526239,"gmtModify":1704794347428,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"What a shill","listText":"What a shill","text":"What a shill","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/353310017","repostId":"2121120348","repostType":4,"repost":{"id":"2121120348","kind":"news","pubTimestamp":1616427011,"share":"https://ttm.financial/m/news/2121120348?lang=&edition=fundamental","pubTime":"2021-03-22 23:30","market":"us","language":"en","title":"Why AMC, GameStop, and Sundial Are 3 of the Worst Stocks to Buy","url":"https://stock-news.laohu8.com/highlight/detail?id=2121120348","media":"Motley Fool ","summary":"Don't let the Reddit frenzy lure you into buying terrible businesses.","content":"<p>Don't let the Reddit frenzy lure you into buying terrible businesses.</p>\n<p>Whether you're a relatively new investor or someone who's been putting your money to work in the market for five decades, there's always something new or unforeseen happening that keeps things interesting.</p>\n<p>In 2021, it's been the rise of the Reddit trader.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/77f6df9d5cb2415372006deee1d65d6d\" tg-width=\"2000\" tg-height=\"1333\"><span>Image source: Getty Images.</span></p>\n<p>Beginning in mid-January, retail investors -- mostly millennials who are relatively new to investing -- on Reddit's WallStreetBets (WSB) community chatroom began banding together to buy shares and out-of-the-money call options in highly short-sold stocks. Short-sellers are investors who are betting against a stock and hoping for its share price to decline. Since gains are capped at 100% while losses are unlimited, short-sellers tend not to stick around if a stock begins to gain a lot of upside momentum.</p>\n<p>Reddit's WSB community was able to effect short squeezes in dozens of short-sold stocks. In order for short-sellers to exit their positions, they must buy to cover. Buying stock only exacerbates the runaway train effect to the upside.</p>\n<p>Since mid-January, movie theater chain&nbsp;<b>AMC Entertainment</b> (NYSE:AMC), video game and accessories retailer&nbsp;<b>GameStop</b> (NYSE:GME), and Canadian marijuana stock&nbsp;<b>Sundial Growers</b> (NASDAQ:SNDL) have been the three most-popular plays of Reddit's retail investors. Unfortunately, they're also three of the worst stocks money can buy.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/bee505c562dafe3e29f86496a282e43d\" tg-width=\"700\" tg-height=\"470\"><span>Image source: Getty Images.</span></p>\n<p><b>Here's why it could be lights-out for AMC</b></p>\n<p>AMC's popularity has to do with its perceived-to-be low share price, as well as the reopening of 99% of its theaters by March 26, according to the company. As many folks have also pointed out to me on social media, technical analysis (i.e., chart patterns) is also driving interest.</p>\n<p>However, none of these catalysts offers true substance.</p>\n<p>For instance, AMC Entertainment was on the verge of bankruptcy in mid-January, and was ultimately saved by issuing close to 165 million new shares of stock and taking on over $400 million in debt capital. The company may have more than $1 billion in cash on hand now, but it's facing aggregate operating losses over the next two years that, by Wall Street's consensus, will come in around a median of $1.7 billion. This is a fancy way of saying that AMC Entertainment almost certainly doesn't have enough cash to make it through the next 12-to-24 months, based on projected losses.</p>\n<p>Another thing to keep in mind is that AMC's theaters reopening doesn't mean things are back to normal. A vast majority of its theaters will be operating at limited capacity, and there's always the possibility that coronavirus variants lead to certain cities, counties, or states scaling back their reopening plans.</p>\n<p>But maybe the biggest slap in the face for shareholders is that AMC executives pocketed $8.3 million in bonuses just a month after stepping back from the bankruptcy ledge for their \"extraordinary efforts\" to keep AMC afloat during these challenging times.</p>\n<p>If you still need <a href=\"https://laohu8.com/S/AONE\">one</a> more damning reason to avoid AMC like the plague, here it is: The model is being disrupted. Both&nbsp;<b>AT&amp;T</b>'s WarnerMedia and&nbsp;<b>Walt Disney</b>&nbsp;are releasing new movies in 2021 on their respective streaming platforms (HBO Max and Disney+) the same day they'll hit theaters. The growth heyday for movie chains is over, and so are AMC's chances for success, in my view.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/4cd041c3c1a321e640648ee5c35dd06e\" tg-width=\"700\" tg-height=\"466\"><span>Image source: Getty Images.</span></p>\n<p><b>Game over for GameStop?</b></p>\n<p>Even though it's the stock that began the Reddit frenzy, GameStop is not a company that any investors should desire to own at its current valuation.</p>\n<p>The primary buy thesis for GameStop has been its high level of short interest. When the short squeeze began in mid-January, the company's short interest, relative to float, was by far the highest on Wall Street. It's come down substantially since then, but GameStop's share price has not.</p>\n<p>If I could grasp at straws and perhaps find <a href=\"https://laohu8.com/S/AONE.U\">one</a> shred of good news to share, it's that the company's e-commerce sales have been soaring of late. During the 2020 holiday season, digital gaming sales rose by 309%. But here's the kicker: Even with a more-than-quadrupling in e-commerce sales, total sales during the holiday season still declined by 3.1%. That's primarily because GameStop shuttered 11% of its stores between the 2019 and 2020 holiday seasons.</p>\n<p>The plain-as-day issue here is that GameStop waited far too long to shift its operating focus to digital gaming. With fewer people trading in or buying used games, which used to be GameStop's high-margin, bread-and-butter growth driver, GameStop's only recourse is to attempt to backpedal its way back into the profit column. This means closing hundreds of stores annually to reduce expenses. But in spite of these precipitous closures, GameStop is likely looking at its fourth-consecutive annual loss in 2021.</p>\n<p>While it may not be game over for GameStop, the company's glory days are long gone. Its market cap today is roughly two times higher than its previous all-time high set back in 2007. The thing is, revenue has gone nowhere, and the company has pushed from recurring profits to ongoing losses. There's no way to logically justify this valuation.</p>\n<p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/084d89ada48e3614d1b0f7ca9fd0aa9c\" tg-width=\"700\" tg-height=\"467\"><span>Image source: Getty Images.</span></p>\n<p><b>Sundial might go up in smoke</b></p>\n<p>Finally, there's Sundial Growers, which I believe is the worst marijuana stock money can buy.</p>\n<p>Similar to GameStop and AMC, Sundial has been buoyed by the Reddit crowd for its high short interest and the lure of its penny stock share price. Canadian pot stocks have also received a boost following the election of Joe Biden as President and Democrats retaking the Senate by the slimmest of majorities. There's hope that cannabis legalization in the U.S. would allow Canadian players like Sundial to enter the more lucrative U.S. market.</p>\n<p>But if there's one thing tenured investors are acutely familiar with, it's that next-big-thing investments always have losers. Sundial looks like one of those losing investment.</p>\n<p>To begin with, Sundial just might be the worst share-based diluter I've seen in years. Since the end of September, Sundial has boosted its cash on hand to $719 million Canadian, but has done so by issuing more than 1.15 billion shares (yes, with a 'b') through a combination of direct share offerings, debt-to-equity swaps, and at-the-market issuances. Were this not enough, its board approved another $1 billion (that's U.S.) mixed-shelf offering. In theory, Sundial could issue hundreds of millions of additional shares.</p>\n<p>Because of its 1.66 billion outstanding shares, Sundial has virtually no chance of ever generating a meaningful per-share profit, and it probably runs the risk of being delisted if it falls back below $1 a share. Sundial could enact a reverse split to bump up its share price and shrink its outstanding share count, but companies that utilize reverse splits are historically viewed as struggling businesses.</p>\n<p>What's more, Sundial isn't anywhere near profitability, and investors are paying close to $1.9 billion for it, excluding cash. That's close to 38 times sales for a company that's lagging the vast majority of its Canadian and U.S. peers.</p>\n<p>AMC, GameStop, and Sundial might be today's buzzy stocks, but they lack substance and have little long-term staying power. That makes all three terrible buys.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why AMC, GameStop, and Sundial Are 3 of the Worst Stocks to Buy</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy AMC, GameStop, and Sundial Are 3 of the Worst Stocks to Buy\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-22 23:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2021/03/22/amc-gamestop-and-sundial-3-of-worst-stocks-to-buy/><strong>Motley Fool </strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Don't let the Reddit frenzy lure you into buying terrible businesses.\nWhether you're a relatively new investor or someone who's been putting your money to work in the market for five decades, there's ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/03/22/amc-gamestop-and-sundial-3-of-worst-stocks-to-buy/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"GME":"游戏驿站","AMC":"AMC院线","SNDL":"SNDL Inc."},"source_url":"https://www.fool.com/investing/2021/03/22/amc-gamestop-and-sundial-3-of-worst-stocks-to-buy/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2121120348","content_text":"Don't let the Reddit frenzy lure you into buying terrible businesses.\nWhether you're a relatively new investor or someone who's been putting your money to work in the market for five decades, there's always something new or unforeseen happening that keeps things interesting.\nIn 2021, it's been the rise of the Reddit trader.\nImage source: Getty Images.\nBeginning in mid-January, retail investors -- mostly millennials who are relatively new to investing -- on Reddit's WallStreetBets (WSB) community chatroom began banding together to buy shares and out-of-the-money call options in highly short-sold stocks. Short-sellers are investors who are betting against a stock and hoping for its share price to decline. Since gains are capped at 100% while losses are unlimited, short-sellers tend not to stick around if a stock begins to gain a lot of upside momentum.\nReddit's WSB community was able to effect short squeezes in dozens of short-sold stocks. In order for short-sellers to exit their positions, they must buy to cover. Buying stock only exacerbates the runaway train effect to the upside.\nSince mid-January, movie theater chain AMC Entertainment (NYSE:AMC), video game and accessories retailer GameStop (NYSE:GME), and Canadian marijuana stock Sundial Growers (NASDAQ:SNDL) have been the three most-popular plays of Reddit's retail investors. Unfortunately, they're also three of the worst stocks money can buy.\nImage source: Getty Images.\nHere's why it could be lights-out for AMC\nAMC's popularity has to do with its perceived-to-be low share price, as well as the reopening of 99% of its theaters by March 26, according to the company. As many folks have also pointed out to me on social media, technical analysis (i.e., chart patterns) is also driving interest.\nHowever, none of these catalysts offers true substance.\nFor instance, AMC Entertainment was on the verge of bankruptcy in mid-January, and was ultimately saved by issuing close to 165 million new shares of stock and taking on over $400 million in debt capital. The company may have more than $1 billion in cash on hand now, but it's facing aggregate operating losses over the next two years that, by Wall Street's consensus, will come in around a median of $1.7 billion. This is a fancy way of saying that AMC Entertainment almost certainly doesn't have enough cash to make it through the next 12-to-24 months, based on projected losses.\nAnother thing to keep in mind is that AMC's theaters reopening doesn't mean things are back to normal. A vast majority of its theaters will be operating at limited capacity, and there's always the possibility that coronavirus variants lead to certain cities, counties, or states scaling back their reopening plans.\nBut maybe the biggest slap in the face for shareholders is that AMC executives pocketed $8.3 million in bonuses just a month after stepping back from the bankruptcy ledge for their \"extraordinary efforts\" to keep AMC afloat during these challenging times.\nIf you still need one more damning reason to avoid AMC like the plague, here it is: The model is being disrupted. Both AT&T's WarnerMedia and Walt Disney are releasing new movies in 2021 on their respective streaming platforms (HBO Max and Disney+) the same day they'll hit theaters. The growth heyday for movie chains is over, and so are AMC's chances for success, in my view.\nImage source: Getty Images.\nGame over for GameStop?\nEven though it's the stock that began the Reddit frenzy, GameStop is not a company that any investors should desire to own at its current valuation.\nThe primary buy thesis for GameStop has been its high level of short interest. When the short squeeze began in mid-January, the company's short interest, relative to float, was by far the highest on Wall Street. It's come down substantially since then, but GameStop's share price has not.\nIf I could grasp at straws and perhaps find one shred of good news to share, it's that the company's e-commerce sales have been soaring of late. During the 2020 holiday season, digital gaming sales rose by 309%. But here's the kicker: Even with a more-than-quadrupling in e-commerce sales, total sales during the holiday season still declined by 3.1%. That's primarily because GameStop shuttered 11% of its stores between the 2019 and 2020 holiday seasons.\nThe plain-as-day issue here is that GameStop waited far too long to shift its operating focus to digital gaming. With fewer people trading in or buying used games, which used to be GameStop's high-margin, bread-and-butter growth driver, GameStop's only recourse is to attempt to backpedal its way back into the profit column. This means closing hundreds of stores annually to reduce expenses. But in spite of these precipitous closures, GameStop is likely looking at its fourth-consecutive annual loss in 2021.\nWhile it may not be game over for GameStop, the company's glory days are long gone. Its market cap today is roughly two times higher than its previous all-time high set back in 2007. The thing is, revenue has gone nowhere, and the company has pushed from recurring profits to ongoing losses. There's no way to logically justify this valuation.\nImage source: Getty Images.\nSundial might go up in smoke\nFinally, there's Sundial Growers, which I believe is the worst marijuana stock money can buy.\nSimilar to GameStop and AMC, Sundial has been buoyed by the Reddit crowd for its high short interest and the lure of its penny stock share price. Canadian pot stocks have also received a boost following the election of Joe Biden as President and Democrats retaking the Senate by the slimmest of majorities. There's hope that cannabis legalization in the U.S. would allow Canadian players like Sundial to enter the more lucrative U.S. market.\nBut if there's one thing tenured investors are acutely familiar with, it's that next-big-thing investments always have losers. Sundial looks like one of those losing investment.\nTo begin with, Sundial just might be the worst share-based diluter I've seen in years. Since the end of September, Sundial has boosted its cash on hand to $719 million Canadian, but has done so by issuing more than 1.15 billion shares (yes, with a 'b') through a combination of direct share offerings, debt-to-equity swaps, and at-the-market issuances. Were this not enough, its board approved another $1 billion (that's U.S.) mixed-shelf offering. In theory, Sundial could issue hundreds of millions of additional shares.\nBecause of its 1.66 billion outstanding shares, Sundial has virtually no chance of ever generating a meaningful per-share profit, and it probably runs the risk of being delisted if it falls back below $1 a share. Sundial could enact a reverse split to bump up its share price and shrink its outstanding share count, but companies that utilize reverse splits are historically viewed as struggling businesses.\nWhat's more, Sundial isn't anywhere near profitability, and investors are paying close to $1.9 billion for it, excluding cash. That's close to 38 times sales for a company that's lagging the vast majority of its Canadian and U.S. peers.\nAMC, GameStop, and Sundial might be today's buzzy stocks, but they lack substance and have little long-term staying power. That makes all three terrible buys.","news_type":1},"isVote":1,"tweetType":1,"viewCount":305,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":350808903,"gmtCreate":1616171321002,"gmtModify":1704791910040,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"...","listText":"...","text":"...","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/350808903","repostId":"1199154789","repostType":4,"repost":{"id":"1199154789","kind":"news","pubTimestamp":1616164372,"share":"https://ttm.financial/m/news/1199154789?lang=&edition=fundamental","pubTime":"2021-03-19 22:32","market":"us","language":"en","title":"Fed Disappoints Market, Lets SLR Relief Expire: What Happens Next","url":"https://stock-news.laohu8.com/highlight/detail?id=1199154789","media":"zerohedge","summary":"As washinted at, and discussed in depth here,the Fed decided - under political pressure from progressive Democrats such asElizabeth Warren and Sherrod Brown- to let the temporary Supplementary Leverage Ratio  exemption expire as scheduled on March 31, the one year anniversary of the rule change.The federal bank regulatory agencies today announced that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020, will expire as scheduled on ","content":"<p>As washinted at, and discussed in depth here,the Fed decided - under political pressure from progressive Democrats such asElizabeth Warren and Sherrod Brown- to let the temporary Supplementary Leverage Ratio (SLR) exemption expire as scheduled on March 31, the one year anniversary of the rule change.</p><blockquote>The federal bank regulatory agencies today announced that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020, will expire as scheduled on March 31, 2021.The temporary change was made to provide flexibility for depository institutions to provide credit to households and businesses in light of the COVID-19 event.</blockquote><p><img src=\"https://static.tigerbbs.com/b822960da59d651f093b5113cd0c3fd0\" tg-width=\"500\" tg-height=\"319\" referrerpolicy=\"no-referrer\">This outcome is theone (again) correctly predictedby former NY Fed guru Zoltan Pozsar who following the FOMC said that \"the fact that the Fed made this adjustment practically preemptively – the o/n RRP facility is not being used at the moment, so there are no capacity constraints yet, while repo and bill yields aren’t trading negative yet –<b>suggests that the Fed is “foaming the runway” for the end of SLR exemption</b>.\"</p><p>Knowing well this would be a very hot button issue for the market, the Fed published thefollowing statementto ease trader nerves, noting that while the SLR special treatment will expire on March 31, the Fed is \"inviting public comment on several potential SLR modifications\" and furthermore, \"<b>Board may need to address the current design and calibration of the SLR over time to prevent strains from developing that could both constrain economic growth and undermine financial stability</b>\" - in short, if yields spike, the Fed will re-introduce the SLR without delay:</p><blockquote>The Federal Reserve Board on Friday announced that the temporary change to its supplementary leverage ratio, or SLR, for bank holding companies will expire as scheduled on March 31. <b>Additionally, the Board will shortly seek comment on measures to adjust the SLR. The Board will take appropriate actions to assure that any changes to the SLR do not erode the overall strength of bank capital requirements.</b>To ease strains in the Treasury market resulting from the COVID-19 pandemic and to promote lending to households and businesses, the Board temporarily modified the SLR last year to exclude U.S. Treasury securities and central bank reserves. Since that time, the Treasury market has stabilized. <b>However, because of recent growth in the supply of central bank reserves and the issuance of Treasury securities, the Board may need to address the current design and calibration of the SLR over time to prevent strains from developing that could both constrain economic growth and undermine financial stability.To ensure that the SLR—which was established in 2014 as an additional capital requirement—remains effective in an environment of higher reserves, the Board will soon be inviting public comment on several potential SLR modifications.</b>The proposal and comments will contribute to ongoing discussions with the Department of the Treasury and other regulators on future work to ensure the resiliency of the Treasury market.</blockquote><p>The Fed's soothing wods notwithstanding,<b>having been primed for a favorable outcome, the Fed's disappointing announcement was hardly the news traders were hoping for and stocks tumbled...</b></p><p><img src=\"https://static.tigerbbs.com/c341c3843a5031cd1599c2c89e198050\" tg-width=\"500\" tg-height=\"305\" referrerpolicy=\"no-referrer\">Bond yields spiked...</p><p><img src=\"https://static.tigerbbs.com/14173c1ce587fb45efe4c30ecc1dfbab\" tg-width=\"500\" tg-height=\"284\" referrerpolicy=\"no-referrer\">... while the stock of JPM, which is the most exposed bank to SLR relief (as noted yesterday in \"Facing Up To JP Morgan's Leverage Relief Threats\")...</p><p><img src=\"https://static.tigerbbs.com/32811183fba3dbddf1c440836298c7f3\" tg-width=\"500\" tg-height=\"602\" referrerpolicy=\"no-referrer\">.... slumped.</p><p><img src=\"https://static.tigerbbs.com/2fba41463f15e79d2b8436cdd6a526fc\" tg-width=\"500\" tg-height=\"306\" referrerpolicy=\"no-referrer\">In case you've been living under a rock, here's why you should care about the SLR decision: First, for those whomissed our primer on the issue, some background from JPM (ironically the one bank that has the most to lose from the Fed's decision) the bottom line is that without SLR relief,<b>banks may have to delever, raise new capital, halt buybacks, sell preferred stock, turn down deposits and generally push back on reserves (not necessarily all of these, and not in that order) just as the Fed is injecting hundreds of billions of reserves into the market as the Treasury depletes its TGA account.</b></p><blockquote>The massive expansion of the Fed’s balance that has occurred implied an equally massive growth in bank reserves held at Federal Reserve banks. <b>The expiration of the regulatory relief would add ~$2.1tn of leverage exposure across the 8 GSIBs. As well, TGA reduction and continued QE could add another ~$2.35tn of deposits to the system during 2021.</b></blockquote><p><img src=\"https://static.tigerbbs.com/392342c2f3e1dd008b2276172a9b3ecf\" tg-width=\"500\" tg-height=\"253\" referrerpolicy=\"no-referrer\">While the expiry of the carve-out on March 31 would not have an immediate impact on GSIBs, the continued increase in leverage assets throughout the course of the year would increase long-term debt (LTD) and preferred requirements. Here, JPM takes an optimistic view and writes that<b>\"even the “worst” case issuance scenario as very manageable, with LTD needs of $35bn for TLAC requirements and preferred needs of $15-$20bn to maintain the industry-wide SLR at 5.6%.</b></p><p>The constraint is greater at the bank entity, where the capacity to grow leverage exposure to be ~$765bn at 6.2% SLR.\"Goldman's take was more troubling: the bank estimated that under the continued QE regime, there would be a shortfall of some $2 trillion in reserve capacity, mainly in the form of deposits which the banks would be unable to accept as part of ongoing QE (much more in Goldman'sfull take of the SLR quandary).</p><p><b>So what happens next?</b></p><p>Addressing this topic, yesterday Curvature's Scott Skyrm wrote that \"<i>the largest banks are enjoying much larger balance sheets, but there are political factors in Washington that are against an extension of the exemption.... Here are a couple of scenarios and their implications on the Repo market</i>:</p><blockquote>The exemption is extended 3 months or 6 months - No impact on the Repo market. It's already fully priced-in.The exemption is continued for reserves, but ended for Treasurys. <b>Since large banks are the largest cash providers in the Repo market, less cash is intermediated into the market and Repo rates rise. Volatility increases as Repo assets move from the largest banks to the other Repo market participants.The exemption is ended for both reserves and Treasurys. Same as above.</b></blockquote><p>In other words, Skyrm has a relatively downbeat view, warning that \"since large banks are the largest cash providers in the Repo market, less cash is intermediated into the market and Repo rates rise.\" Additionally, volatility is likely to increase as repo assets move from the largest banks to the other Repo market participants...</p><p>Perhaps a bit too draconian? Well, last week, JPMorgan laid out 5 scenarios for SLR, of which two predicted the end of SLR relief on March 31, as follow:</p><blockquote><u><b>3. Relief ends March 31, banks fully raise capital</b></u> <b>Impact on BanksRatesFront-End Rates</b> <u><b>4. Relief ends March 31, banks raise capital &amp; de-lever</b></u> <b>Impact on BanksRatesFront-End Rates</b></blockquote><p>Going back to Zoltan, let's recallthat the repo gurualso cautioned that \"ending the exemption of reserves and Treasuries from the calculation of the SLR may mean that U.S. banks will turn away deposits and reserves on the margin (not Treasuries) to leave more room for market-making activities,<b>and these flows will swell further money funds’ inflows coming from TGA drawdowns.</b>\"</p><p>More importantly, Zoltan does not expect broad chaos in repo or broader markets, and instead provides a more benign view on the negligible impact the SLR has had (and will be if it is eliminated), as he explained in a note from Tuesday.</p><p><img src=\"https://static.tigerbbs.com/caeeb2b1290e084832f29d61cea6a90b\" tg-width=\"500\" tg-height=\"534\" referrerpolicy=\"no-referrer\">How to determine if Zoltan's benign view is correct? He concluded his note by writing that \"given that our call for a zero-to-negative FRA-OIS spread by the end of June was predicated on the end of SLR extension and an assumption that the Fed will try to fix a quantity problem with prices, not quantities, today’s adjustments mean that FRA-OIS won’t trade all the way down to zero or negative territory.\"</p><blockquote>FRA-OIS from here will be a function of how tight FX swaps will trade relative to OIS, but Treasury bills trading at deeply sub-zero rates is no longer a risk...</blockquote><p>While Bills have occasionally dipped into the negative territory on occasion, so far they have avoided a fullblown plunge into NIRP, which may be just the positive sign the market is waiting for to ease the nerves associated with the sudden and largely unexpected end of the SLR exemption.</p><p>* *&nbsp; *</p><p>Finally, for those curious what the immediate market impact will be, NatWest strategist Blake Gwinn writes that the Fed announcement that they’re letting regulatory exemptions for banks expire at the end of the month \"really threads the needle and \"assuages concerns about the potential long-term impact on the markets\" as<b>the SLR \"ends it but defuses a lot of the knee-jerk market reaction” by pledging to address the current design and calibration of the supplementary leverage ratio to prevent strains from developing</b>.</p><p>“I was never worried about a day-one bank puke of Treasuries or drawdown in repo or anything like that on no renewal,” Gwinn said. “My concern was the longer run,” like as reserves continue to rise, would the SLR “become a nuisance and drag on Treasuries and spreads” Gwinn concludes that with the statement, the Fed is<b>\"really speaking to those fears and basically saying, ‘don’t worry, we are on it’.”</b></p><p>Well, with yields spiking to HOD in early quad-witch trading, the market sure seems quite skeptical that the Fed is on anything.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Fed Disappoints Market, Lets SLR Relief Expire: What Happens Next</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; 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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFed Disappoints Market, Lets SLR Relief Expire: What Happens Next\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-19 22:32 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.zerohedge.com/markets/stocks-bopnds-tank-after-fed-lets-slr-relief-expire><strong>zerohedge</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>As washinted at, and discussed in depth here,the Fed decided - under political pressure from progressive Democrats such asElizabeth Warren and Sherrod Brown- to let the temporary Supplementary ...</p>\n\n<a href=\"https://www.zerohedge.com/markets/stocks-bopnds-tank-after-fed-lets-slr-relief-expire\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.zerohedge.com/markets/stocks-bopnds-tank-after-fed-lets-slr-relief-expire","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1199154789","content_text":"As washinted at, and discussed in depth here,the Fed decided - under political pressure from progressive Democrats such asElizabeth Warren and Sherrod Brown- to let the temporary Supplementary Leverage Ratio (SLR) exemption expire as scheduled on March 31, the one year anniversary of the rule change.The federal bank regulatory agencies today announced that the temporary change to the supplementary leverage ratio, or SLR, for depository institutions issued on May 15, 2020, will expire as scheduled on March 31, 2021.The temporary change was made to provide flexibility for depository institutions to provide credit to households and businesses in light of the COVID-19 event.This outcome is theone (again) correctly predictedby former NY Fed guru Zoltan Pozsar who following the FOMC said that \"the fact that the Fed made this adjustment practically preemptively – the o/n RRP facility is not being used at the moment, so there are no capacity constraints yet, while repo and bill yields aren’t trading negative yet –suggests that the Fed is “foaming the runway” for the end of SLR exemption.\"Knowing well this would be a very hot button issue for the market, the Fed published thefollowing statementto ease trader nerves, noting that while the SLR special treatment will expire on March 31, the Fed is \"inviting public comment on several potential SLR modifications\" and furthermore, \"Board may need to address the current design and calibration of the SLR over time to prevent strains from developing that could both constrain economic growth and undermine financial stability\" - in short, if yields spike, the Fed will re-introduce the SLR without delay:The Federal Reserve Board on Friday announced that the temporary change to its supplementary leverage ratio, or SLR, for bank holding companies will expire as scheduled on March 31. Additionally, the Board will shortly seek comment on measures to adjust the SLR. The Board will take appropriate actions to assure that any changes to the SLR do not erode the overall strength of bank capital requirements.To ease strains in the Treasury market resulting from the COVID-19 pandemic and to promote lending to households and businesses, the Board temporarily modified the SLR last year to exclude U.S. Treasury securities and central bank reserves. Since that time, the Treasury market has stabilized. However, because of recent growth in the supply of central bank reserves and the issuance of Treasury securities, the Board may need to address the current design and calibration of the SLR over time to prevent strains from developing that could both constrain economic growth and undermine financial stability.To ensure that the SLR—which was established in 2014 as an additional capital requirement—remains effective in an environment of higher reserves, the Board will soon be inviting public comment on several potential SLR modifications.The proposal and comments will contribute to ongoing discussions with the Department of the Treasury and other regulators on future work to ensure the resiliency of the Treasury market.The Fed's soothing wods notwithstanding,having been primed for a favorable outcome, the Fed's disappointing announcement was hardly the news traders were hoping for and stocks tumbled...Bond yields spiked...... while the stock of JPM, which is the most exposed bank to SLR relief (as noted yesterday in \"Facing Up To JP Morgan's Leverage Relief Threats\")....... slumped.In case you've been living under a rock, here's why you should care about the SLR decision: First, for those whomissed our primer on the issue, some background from JPM (ironically the one bank that has the most to lose from the Fed's decision) the bottom line is that without SLR relief,banks may have to delever, raise new capital, halt buybacks, sell preferred stock, turn down deposits and generally push back on reserves (not necessarily all of these, and not in that order) just as the Fed is injecting hundreds of billions of reserves into the market as the Treasury depletes its TGA account.The massive expansion of the Fed’s balance that has occurred implied an equally massive growth in bank reserves held at Federal Reserve banks. The expiration of the regulatory relief would add ~$2.1tn of leverage exposure across the 8 GSIBs. As well, TGA reduction and continued QE could add another ~$2.35tn of deposits to the system during 2021.While the expiry of the carve-out on March 31 would not have an immediate impact on GSIBs, the continued increase in leverage assets throughout the course of the year would increase long-term debt (LTD) and preferred requirements. Here, JPM takes an optimistic view and writes that\"even the “worst” case issuance scenario as very manageable, with LTD needs of $35bn for TLAC requirements and preferred needs of $15-$20bn to maintain the industry-wide SLR at 5.6%.The constraint is greater at the bank entity, where the capacity to grow leverage exposure to be ~$765bn at 6.2% SLR.\"Goldman's take was more troubling: the bank estimated that under the continued QE regime, there would be a shortfall of some $2 trillion in reserve capacity, mainly in the form of deposits which the banks would be unable to accept as part of ongoing QE (much more in Goldman'sfull take of the SLR quandary).So what happens next?Addressing this topic, yesterday Curvature's Scott Skyrm wrote that \"the largest banks are enjoying much larger balance sheets, but there are political factors in Washington that are against an extension of the exemption.... Here are a couple of scenarios and their implications on the Repo market:The exemption is extended 3 months or 6 months - No impact on the Repo market. It's already fully priced-in.The exemption is continued for reserves, but ended for Treasurys. Since large banks are the largest cash providers in the Repo market, less cash is intermediated into the market and Repo rates rise. Volatility increases as Repo assets move from the largest banks to the other Repo market participants.The exemption is ended for both reserves and Treasurys. Same as above.In other words, Skyrm has a relatively downbeat view, warning that \"since large banks are the largest cash providers in the Repo market, less cash is intermediated into the market and Repo rates rise.\" Additionally, volatility is likely to increase as repo assets move from the largest banks to the other Repo market participants...Perhaps a bit too draconian? Well, last week, JPMorgan laid out 5 scenarios for SLR, of which two predicted the end of SLR relief on March 31, as follow:3. Relief ends March 31, banks fully raise capital Impact on BanksRatesFront-End Rates 4. Relief ends March 31, banks raise capital & de-lever Impact on BanksRatesFront-End RatesGoing back to Zoltan, let's recallthat the repo gurualso cautioned that \"ending the exemption of reserves and Treasuries from the calculation of the SLR may mean that U.S. banks will turn away deposits and reserves on the margin (not Treasuries) to leave more room for market-making activities,and these flows will swell further money funds’ inflows coming from TGA drawdowns.\"More importantly, Zoltan does not expect broad chaos in repo or broader markets, and instead provides a more benign view on the negligible impact the SLR has had (and will be if it is eliminated), as he explained in a note from Tuesday.How to determine if Zoltan's benign view is correct? He concluded his note by writing that \"given that our call for a zero-to-negative FRA-OIS spread by the end of June was predicated on the end of SLR extension and an assumption that the Fed will try to fix a quantity problem with prices, not quantities, today’s adjustments mean that FRA-OIS won’t trade all the way down to zero or negative territory.\"FRA-OIS from here will be a function of how tight FX swaps will trade relative to OIS, but Treasury bills trading at deeply sub-zero rates is no longer a risk...While Bills have occasionally dipped into the negative territory on occasion, so far they have avoided a fullblown plunge into NIRP, which may be just the positive sign the market is waiting for to ease the nerves associated with the sudden and largely unexpected end of the SLR exemption.* *  *Finally, for those curious what the immediate market impact will be, NatWest strategist Blake Gwinn writes that the Fed announcement that they’re letting regulatory exemptions for banks expire at the end of the month \"really threads the needle and \"assuages concerns about the potential long-term impact on the markets\" asthe SLR \"ends it but defuses a lot of the knee-jerk market reaction” by pledging to address the current design and calibration of the supplementary leverage ratio to prevent strains from developing.“I was never worried about a day-one bank puke of Treasuries or drawdown in repo or anything like that on no renewal,” Gwinn said. “My concern was the longer run,” like as reserves continue to rise, would the SLR “become a nuisance and drag on Treasuries and spreads” Gwinn concludes that with the statement, the Fed is\"really speaking to those fears and basically saying, ‘don’t worry, we are on it’.”Well, with yields spiking to HOD in early quad-witch trading, the market sure seems quite skeptical that the Fed is on anything.","news_type":1},"isVote":1,"tweetType":1,"viewCount":299,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":325139754,"gmtCreate":1615872827478,"gmtModify":1704787758050,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"Thanks","listText":"Thanks","text":"Thanks","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/325139754","repostId":"1172271196","repostType":4,"repost":{"id":"1172271196","kind":"news","pubTimestamp":1615871336,"share":"https://ttm.financial/m/news/1172271196?lang=&edition=fundamental","pubTime":"2021-03-16 13:08","market":"us","language":"en","title":"How To Spot A Bubble","url":"https://stock-news.laohu8.com/highlight/detail?id=1172271196","media":"Hussman Funds","summary":"Summary\n\nThe defining feature of a bubble is inconsistency between expected returns based on price b","content":"<p><b>Summary</b></p>\n<ul>\n <li>The defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations.</li>\n <li>If we compare our most reliable valuation measures with the valuation measures that one would obtain from a proper long-term discounted cash flow analysis, we find that they're nearly identical.</li>\n <li>One of the unfortunate bits of financial illiteracy that Wall Street has pushed into the heads of investors is the idea that extreme valuations are \"justified\" by low interest rates.</li>\n <li>It's undoubtedly true that profit margins, expected growth, and other factors have an effect on future deliverable cash flows and the valuations that investors place on stocks.</li>\n <li>To understand why extreme valuations imply high volatility, and require extremely long investment horizons, it's useful to consider the concept of \"duration.\"</li>\n</ul>\n<blockquote>\n I can show, really precisely, that there are two warranted prices for a share. The one I prefer is based on such fundamentals as earnings and growth rates, but the bubble is rational in a certain sense. The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.- Nobel Laureate Franco Modigliani, New York Times, March 30, 2000\n</blockquote>\n<p>The word \"bubble\" is tossed around quite a bit in the financial markets, but it's rarely used correctly. See, the thing that defines a bubble isn't that valuations are extremely high, or that expected returns are extremely low. Instead, what defines a bubble is that investors drive valuations higher without simultaneously adjusting expectations for returns lower. That is, investors extrapolate past returns based on price behavior, even though those expectations are inconsistent with the returns that would equate price with discounted cash flows.</p>\n<p>In March 2000, at the height of the technology bubble, I noted: \"Over time, price/revenue ratios come back in line. Currently, that would imply an 83% plunge in tech stocks. If you understand values and market history, you know we're not joking.\" The following month, I discussed Modigliani's quote above, and detailed the dynamics he was describing. The collapse of the 2000 bubble would ultimately erase half the value of the S&amp;P 500, and would take the tech-heavy Nasdaq 100 down an implausibly precise 83%.</p>\n<p>The defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations. If investors pay $150 today for a security that will deliver a single $100 payment a decade from now, but they also fully understand that they'll lose 4% annually on the deal, without extrapolating past gains into the future, then we might say the security is overvalued, and we might question why investors would accept that trade, but we can't call it a bubble.</p>\n<p>But if investors pay $150 today for that security, because they look back in the rear-view mirror, decide that it \"always goes up\" over time, and convince themselves that expected future returns are always positive, then you've got a bubble. Discounting the future $100 cash flow of the security using any positive expected return would produce a price less than $100. So the positive returns expected by investors are inconsistent with the returns that would equate price with discounted cash flows. The size of the bubble is the fraction of the market price that represents expectational \"hot air.\"</p>\n<p>Likewise, the willingness of investors to embrace \"passive investments\" like ETFs and asset-backed securities based on past performance, with little concern about the valuations, yields, or credit risk of the securities inside, is the very soap from which bubbles repeatedly emerge. Amid the current enthusiasm for special purpose acquisition companies (SPACS), investors might recall the bubble in \"incubators\" at the 2000 peak, the \"conglomerates\" of the late-1960s Go-Go bubble, and even the South Sea Company in the early 1700s, along with similar companies formed at the time \"for carrying on an undertaking of great advantage, but nobody to know what it is.\"</p>\n<p>If investors price the S&amp;P 500 at levels that are highly likely to produce negative returns for a decade, as they did in 1929 and 2000, and as I believe they are doing at present, yet investors continue to press stock prices higher on the expectation that they will provide historically normal levels of future return regardless of valuations, then you have the sort of inconsistency that defines a bubble.</p>\n<p>Likewise, if the expected return of a conventional passive investment mix is negative on a 10-12 year horizon (based on reliable valuation measures strongly correlated with actual subsequent returns over a century of market history), yet pension return assumptions remain locked near 7% annually, you've got a bubble, and most likely a future pension funding crisis, on your hands.</p>\n<p>This is how very bad things have repeatedly happened in the financial markets across history, enabled by what Galbraith called \"the extreme brevity of the financial memory.\"</p>\n<p>When Modigliani says that there are two \"warranted\" prices, he means that - at least in the short run - there are two ways that prices can fulfill the expectations of investors. In one case, investors have expectations about future returns, and those expectations are informed by the level of valuations. If prices rise, and expected cash flows haven't changed, investors recognize that future returns will be lower. In the \"bubble\" case, investors have high expectations about future returns, mainly based on past returns, and they act on those expectations by driving prices up further. So the expectation of additional price increases is simply reinforced. \"The expectation of growth produces the growth, which confirms the expectation.\"</p>\n<p>Only one of these prices is consistent, in that the rate of return expected by investors is also the rate of return that equates price with discounted future cash flows. The other price becomes increasingly detached from fundamentals, as a larger and larger fraction of the price represents hot air, and it ultimately collapses as the gap becomes untenably wide.</p>\n<p>During speculative segments of the market cycle, there's nothing that forces investors to recognize that higher valuations imply lower returns, or to change their expectation of high returns as far as the eye can see. That, of course, is why we use measures of market internals to gauge the inclination of investors toward speculation or risk-aversion. Valuation provides an enormous amount of information about likely long-term returns and potential market losses over the complete cycle. But valuation isn't a timing tool. In recent years, it hasn't even imposed a limit on speculative recklessness.</p>\n<p>Still, with each price advance, the actual long-term return implied by future cash flows - what investors will ultimately realize as those cash flows are delivered - collapses further, even while investors act on their delusion that long-term returns have nothing to do with price. Eventually, the bulk of the security price represents a bubble component, not the price that would actually need to exist in order for the long-term expectations of investors to be accurate.</p>\n<p>As I wrote at the 2000 market peak:</p>\n<blockquote>\n \"As long as investors focus on year-to-year returns and not discounted cash flow calculations, the bubble can continue to grow in self-reinforcing fashion. Investors anticipate a high return, and the price behavior reinforces the expectation. The true long-term return becomes increasingly detached from the long-term return imagined by investors, and the bubble component accounts for an increasingly large proportion of the total price.\"\n</blockquote>\n<p>By our most reliable measures, run-of-the-mill historical valuation norms are roughly 70% below current levels. I know you don't want to believe that.</p>\n<p><img src=\"https://static.tigerbbs.com/493c338076df85e2a04ebf892af4762f\" tg-width=\"1280\" tg-height=\"713\"></p>\n<p>The trap door quietly swings open when valuations are extreme and market internals begin to deteriorate. That's the situation we've observed in our measures in recent weeks, with the initial deterioration largely driven by debt securities, but with increasing divergences in equities as well.</p>\n<p><b>Valuations and discounted cash flows</b></p>\n<blockquote>\n Valuations measure the tradeoff between current prices and a very long-term stream of expected future cash flows. Every useful valuation ratio is just shorthand for that calculation. Every valuation ratio that fails that criterion is inferior, and you can show it in historical data.\n</blockquote>\n<blockquote>\n - John P. Hussman, Ph.D., The Meaning of Valuation, December 2019\n</blockquote>\n<p>I've often noted that the denominator of every good valuation measure is just shorthand for the decades and decades of cash flows that the security is likely to deliver in the future. In fact, we always test the validity of the valuation measures we use by examining:</p>\n<p>a) how strongly the resulting valuation measures are correlated with actual subsequent total returns, and;</p>\n<p>b) how closely they replicate an explicit discounted cash flow analysis.</p>\n<p>Below, we'll examine a variety of valuation measures that offer some perspective on why I view the U.S. equity market as a bubble near the breaking point. Along the way, I'll point out some interesting features of valuations and their relationship with subsequent returns. If math gives you hives, feel free to skim over the small amount that I've included here and there.</p>\n<p>Consider first the relationship between valuations and subsequent returns. I'll state the following, which you can prove to yourself by toying around a bit with present value models: the logarithm of a good valuation measure should have an inverse and roughly linear relationship with the expected subsequent investment return.</p>\n<p>Here's a simple example of what this looks like.</p>\n<p><img src=\"https://static.tigerbbs.com/d1e5bdf4391c9c91a8b9a051f6635116\" tg-width=\"819\" tg-height=\"708\"></p>\n<p>Here's what this looks like for MarketCap/GVA, our most reliable stock market valuation measure</p>\n<p><img src=\"https://static.tigerbbs.com/485141919c853722522159d2e9d05e85\" tg-width=\"1280\" tg-height=\"720\"></p>\n<p>During the past three decades, we've studied and introduced a broad range of valuation measures. Most can be calculated back to 1947. Some can be evaluated over a century or more. Across history, even in recent decades, we find that the valuation measures that are best correlated with actual subsequent returns are those with muted sensitivity to cyclical fluctuations in profit margins, and that behave largely like broad, market-wide price/revenue ratios.</p>\n<p>If we compare our most reliable valuation measures with the valuation measures that one would obtain from a proper long-term discounted cash flow analysis, we find that they're nearly identical. Here's what this comparison looks like for the actual stream of dividends (including the impact of repurchases) delivered by the S&amp;P 500 since 1900, discounted at a fixed 10% rate (see the chart text for additional details).</p>\n<p>The reason we use a fixed rate of return is that a multiple of 1.0 is then, by definition, the level at which the S&amp;P 500 would have been priced for that particular level of expected return. Any deviation in the valuation multiple from 1.0 then gauges how far likely future returns are from that \"typical\" expected return. We're currently farther away from \"typical\" expected returns than at any moment in history, including the 1929 and 2000 market peaks.</p>\n<p><img src=\"https://static.tigerbbs.com/e6f61d2794095c2545d0d2c130320e45\" tg-width=\"1280\" tg-height=\"722\"></p>\n<p>One of the unfortunate bits of financial illiteracy that Wall Street has pushed into the heads of investors is the idea that extreme valuations are \"justified\" by low interest rates. Now, it's certainly true that holding future cash flows constant, raising the price of an investment will lower the embedded rate of return, and vice versa. If you pay $32 today for $100 a decade from today, you can expect a 12% annual return. If you pay $82 for the same security, you can expect a 2% annual return. If you pay $100 today, you can expect nothing. So it's clearly true that holding future cash flows constant, a lower rate of return implies a higher level of valuation.</p>\n<p>The reason the statement \"low interest rates justify high valuations\" contributes to financial illiteracy is that the statement has been learned entirely out of context of the arithmetic. As a result, investors seem to imagine that, as long as high valuations can be \"justified,\" stocks can be expected to provide historically normal rates of return in the future. Likewise, investors seem to have no concept that if interest rates are low because growth rates are low, no valuation premium is \"justified\" for stocks, because the lower growth is already sufficient to bring future stock returns down to levels that are commensurate with the low level of interest rates.</p>\n<p>The truth is simple but uncomfortable. If interest rates are low and expected growth is held constant, higher valuations imply lower long-term returns. If interest rates are low because expected future growth is also low, higher valuations are not required. Long-term returns will be lower anyway. A valuation premium just makes future returns even worse.</p>\n<p>Saying that extremely low interest rates \"justify\" extremely high stock valuations is identical to saying that extremely low future returns on bonds \"justify\" extremely low future returns on stocks. I don't really think that's something Wall Street cares to clarify when it tells investors that stock market valuations are \"justified.\"</p>\n<p>Investment valuation is concerned with the relationship between three objects: the current price, the future cash flows, and the rate of return that connects the two like a string. The lower the current price and the higher the future cash flows, the steeper the string. The higher the current price and the lower the future cash flows, the flatter the string. Raise the current price above the future cash flows, and the string will point down instead of up. Given any two of these objects, you can calculate the third one.</p>\n<p>For example, if you want to estimate expected long-term returns, you need two objects: a) the current price and b) the expected stream of future cash flows. A good valuation ratio is just shorthand for those two objects, so you can estimate the long-term return directly from the level of valuation. Then, if you like, you can compare it with the level of interest rates. That comparison can be useful, because even when investors realize that high stock market valuations imply low long-term returns, it's not at all clear that they realize how low long-term return prospects have been driven.</p>\n<p>The chart below shows our estimate of expected 12-year S&amp;P 500 total returns over-and-above Treasury bond yields, across a century of market history. Compare this with the nearly useless drivel that Wall Street passes off as the \"equity risk premium\" (typically quoted as the S&amp;P 500 forward earnings yield minus the 10-year Treasury yield). Yes, you're reading the chart correctly. Given current valuations, we expect the total return of the S&amp;P 500 to underperform the lowly yield on Treasury bonds by roughly -6% annually over the coming 12-year period.</p>\n<p><img src=\"https://static.tigerbbs.com/42561963df9d259a93fe0d4f2502c13e\" tg-width=\"1024\" tg-height=\"577\"></p>\n<p>Many investors confuse the estimation of expected returns (which requires only expected cash flows and the observed price) with a different problem - the estimation of \"fair value.\" See, interest rates come into the picture when you have an expected stream of future cash flows and you want to calculate a \"fair\" current price. In that case, rather than picking an arbitrary rate of return from a hat, it's common to use the level of interest rates, plus some risk premium, as the expected long-term return (or discount rate, or capitalization rate). This sort of calculation can be super-sensitive to arbitrary choices.</p>\n<p>In particular, Wall Street loves to combine super-high growth rates, super-low discount rates, and super-long time horizons, which allows one to calculate a \"fair value\" that's as close to infinity as possible. The thing to remember is that whatever rate of return an analyst embeds into the fair value calculation is also the long-term rate of return you'll earn over time if you pay that price, assuming the future cash flows are delivered as expected.</p>\n<p>Among scores of measures we've evaluated or introduced over time, MarketCap/GVA (nonfinancial market capitalization to corporate gross value-added, including our estimate of foreign revenues) has the highest correlation with actual subsequent 10-12 year S&amp;P 500 total returns, followed by our Margin-Adjusted P/E (MAPE). I find it hilarious that the various valuation measures I've introduced over time are sometimes described as products of \"machine learning,\" \"data mining,\" and \"curve fitting\" when they are, in fact, just different versions of an apples-to-apples economy-wide price/revenue ratio.</p>\n<p><img src=\"https://static.tigerbbs.com/75dac426a3ad2f3830f9dce50f7c0a1c\" tg-width=\"1265\" tg-height=\"712\"></p>\n<p>The S&amp;P 500 price/revenue ratio and nonfinancial market capitalization to GDP (the \"Buffett indicator\") also perform well, and better than earnings-based alternatives like price/forward earnings, the Fed Model, and even the Shiller CAPE. See, while earnings are necessary to generate long-term cash flows, they are also subject to fluctuations in profit margins (both cyclically and even from decade to decade) that turn out to be highly uninformative.</p>\n<p>Economically, fluctuations in profit margins are driven primarily by fluctuations in real unit labor costs. Because companies compete on the basis of realized after-tax profits rather than pre-tax profits, changes in tax policy also have far less durable impact on corporate profits than investors seem to imagine. While corporate profits got a tremendous boost last year from CARES spending (the deficit of one sector always emerges as the surplus of another), here's what the relationship between corporate profits and real unit labor costs looks like historically.</p>\n<p>Real unit labor costs are presented on an inverted left scale. The upward pressure on labor costs (observed as a plunge in the blue line) isn't particularly auspicious for future profits. Still, there's so much distortion in recent quarters that I'd consider the jury to be out on how much of this will be sustained.</p>\n<p><img src=\"https://static.tigerbbs.com/3110e7d3c0468c39d343b20835566bcc\" tg-width=\"1157\" tg-height=\"652\"></p>\n<p>It's undoubtedly true that profit margins, expected growth, and other factors have an effect on future deliverable cash flows and the valuations that investors place on stocks. But even for technology stocks, these assumptions should be made explicit and tested against history. You'll find that observable measures like price/revenue are still very serviceable. In fact, the extreme price/revenue multiples of technology stocks helped to inform my March 2000 projection of an 83% loss in that sector.</p>\n<p>As Benjamin Graham wrote, \"The habit of relating what is paid to what is being offered is an invaluable trait in investment. The more dependent the valuation becomes on anticipations of the future - and the less it is tied to a figure demonstrated by past performance - the more vulnerable it becomes to possible miscalculation and serious error.\"</p>\n<p>The current 5.19 price/revenue multiple for the Nasdaq 100, is the most extreme level since February 2001, which was followed by a 60% loss in the index (after it had already dropped in half). The situation is actually a bit worse than 2001 here. If one examines the largest components of the index, it becomes clear that their annual growth rates have declined substantially over time.</p>\n<p>As a result, a dollar of current revenues should arguably command a smaller multiple than a dollar of revenues might have during earlier periods of emerging growth. Yet even if one takes the Nasdaq 100 price/revenue ratio at face value, and even if one restricts attention to the bubble period since 2000, it's difficult to expect the Nasdaq to produce total returns over the coming decade much better than zero.</p>\n<p><img src=\"https://static.tigerbbs.com/48dd88f74eaed48d53b237b4d0209d8e\" tg-width=\"963\" tg-height=\"542\"></p>\n<p>You don't really want to see what the same chart looks like for the S&amp;P 500.</p>\n<p><img src=\"https://static.tigerbbs.com/24f70ab683592ef20a8c6c75fc9bd1fc\" tg-width=\"963\" tg-height=\"543\"></p>\n<p>The same is true, unfortunately, for passive investment strategies. We presently estimate negative 12-year average annual total returns for a conventional passive investment mix invested 60% in the S&amp;P 500, 30% in Treasury bonds, and 10% in Treasury bills.</p>\n<p>In a 2019&nbsp;white paper, I detailed an approach to estimate a \"value-focused asset allocation\" by jointly considering prevailing stock market valuations and interest rates. It specifies an investment allocation based on which asset class is estimated to have the highest average annual expected return, adjusted for risk, to each point in a long-term investment horizon. That allocation can then be modified by a risk-management component, to adjust the exposure during segments of the market cycle where risk-aversion or speculation among market participants may temporarily drive valuations to depressed or elevated levels. The white paper includes numerous charts showing how this value-focused asset allocation has changed across market history, particularly at important peaks and troughs in the stock and bond markets.</p>\n<p>Along with those methods, I introduced our \"Endowment/spending multiple,\" which estimates the number of years of spending that a passive 60/30/10 investor requires up-front, in order to finance an expected 36-year stream of future inflation-adjusted spending. The idea here is that in a deeply undervalued market with high expected future returns, investors can finance a future stream of spending with far less than they require when valuations are extreme and prospective returns are low.</p>\n<p>You know you're in a bubble when funding a 36-year stream of expected inflation-adjusted spending requires over 38 years of money up-front.</p>\n<p><img src=\"https://static.tigerbbs.com/1adff1ad0dbaa2737f60cb7589d206fb\" tg-width=\"1230\" tg-height=\"693\"></p>\n<p>In the chart below, the Endowment/spending multiple is presented on an inverted log scale (left), along with the actual subsequent average annual total return of a 60/30/10 portfolio mix (right scale). Needless to say, we adhere to investment disciplines that are intended to address problems like this.</p>\n<p><img src=\"https://static.tigerbbs.com/1480e881b4d04ace81a96f31f6368796\" tg-width=\"1229\" tg-height=\"692\"></p>\n<p>As a testament to the breadth of this speculative episode, the median price/revenue ratio of S&amp;P 500 components now exceeds 3.3, easily a record, and extreme enough to provoke distress about the potential losses that innocent but poorly-informed investors may experience over the completion of this cycle.</p>\n<p><img src=\"https://static.tigerbbs.com/ffe0cc33bdaf0695dacb7ae1d817edab\" tg-width=\"1110\" tg-height=\"625\"></p>\n<p>The next chart shows the median price/revenue ratio of S&amp;P 500 components sorted into 10 deciles by valuation. The chart is presented on log scale to allow each line to be compared with its own history. Each segment on the vertical axis represents a doubling of valuations. Notice that every single decile of S&amp;P 500 components is at record valuation extremes. Investors now rely on a permanently high plateau in these extremes.</p>\n<p><img src=\"https://static.tigerbbs.com/cb7c995e64e3c9cba85d6e0fc9124223\" tg-width=\"1280\" tg-height=\"721\"></p>\n<p>It's interesting, but far less important, that the median price/earnings ratio of S&amp;P 500 components has also reached 32.4, the highest level in history. This compares with a median P/E of 19.4 at the 2000 market peak. The problem with P/E multiples, of course, is that they are substantially affected by earnings variability. In fact, prior to the current peak, the highest median P/E for the S&amp;P 500 was actually in March 2002, when the index was down 25% from the March 2000 bubble highs. That's because earnings were down far more by then, which boosted P/E ratios. Such is the danger of taking P/E multiples at face value.</p>\n<p>A crude but reasonably effective way to get around the cyclicality of earnings (but only for very broad indices), is to compare prices to the highest level of earnings achieved to-date. I introduced this metric back in 1998 as the price-to-peak-earnings ratio. The chart below shows a version of that. The blue line (left scale) shows the ratio of total U.S. equity market capitalization to GDP. The red line (right scale) shows the ratio of total U.S. equity market capitalization to the highest level of economy-wide U.S. profits to date. Investors have gotten themselves into trouble here.</p>\n<p><img src=\"https://static.tigerbbs.com/a6630cf8302360e1b4645870051b21de\" tg-width=\"989\" tg-height=\"557\"></p>\n<p><b>What if valuations remain extreme forever?</b></p>\n<p>Probably the single most frequent question I've heard from investors over the past couple of years is \"What happens if valuations remain extreme forever?\" It's actually a version of the \"permanently high plateau\" that Irving Fisher disastrously projected in 1929. Still, recent years have produced enormous confidence among investors that the Federal Reserve's purchases of Treasury debt can permanently \"backstop\" the stock market.</p>\n<p>As I've detailed previously, quantitative easing supports the market only by creating zero interest hot potatoes that are uncomfortable for investors to hold (provided that they're inclined toward speculation), and that are impossible to get rid of in aggregate. Moreover, the Fed's purchases of corporate bonds during the pandemic were legally constrained to CARES funds provided by the Treasury, and ultimately amounted to $14 billion of bonds, in an economy with $11 trillion in corporate debt at $58 trillion in equity market capitalization.</p>\n<p>Suffice it to say that the \"Fed backstop\" is largely in the minds of investors, and relies almost exclusively on the psychological discomfort of holding low-yielding base money. Yet since perception can be indistinguishable from reality, particularly in the short run, it's important to entertain the question.</p>\n<p>My answer is that if the Fed is indeed able to maintain valuations at the highest levels in history, forever, stock prices would likely grow at roughly the same rate as nominal GDP. So figure 1.6% real structural growth plus 2% inflation gets you 3.6%. Let's call it 4%, which would match nominal GDP growth in both the 10-year and 20-year periods ending at the Q4 2019 economic peak, just before the pandemic. The first casualty of rising inflation is stock valuations, so it's not at all clear that assuming higher inflation would help stocks until valuations were roughly normalized, which would require consumer prices to roughly triple.</p>\n<p>The chart below is a reminder of how structural real GDP growth has progressed over recent decades (driven by demographic labor force growth and trend productivity), and the basis for that 1.6% figure for structural real GDP growth.</p>\n<p><img src=\"https://static.tigerbbs.com/cf63b9b8f5f3b55136c8523d73e864f3\" tg-width=\"1131\" tg-height=\"637\"></p>\n<p>Sticking with 4% nominal growth, and adding a 1.5% dividend yield, a \"permanently high plateau\" in market valuations would imply S&amp;P 500 total returns of about 5.5% annually. Again, this assumes that valuations never retreat from levels that presently stand at about 3.6 times their historical norms. Simply allow them to retreat to 2.4 times their historical norms a decade from now - which would still keep valuations among the highest 10% in U.S. history - and the resulting 10-year total return would drop to about 1.3%. I think this would actually be the best-case scenario even in a permanently overvalued world.</p>\n<p>At elevated valuations, even very small changes in expected return imply enormous changes in prices. So it's unlikely that a period of much higher average valuations will escape the prospect of relatively high volatility. Rather than a 70% market decline, which would presently be required for the S&amp;P 500 to simply touch historically run-of-the-mill valuation norms, investors could expect rather frequent market losses in the 20-35% range, which is essentially what we've seen even over the past few years.</p>\n<p>All of that would be fine with us. We've adapted our discipline sufficiently (especially in late-2017) to tolerate the possibility of permanently sustained overvaluation. My impression is that the impact of those adaptations has become more evident as we've had greater opportunities to live into them. I can't say that I believe for a second that investors will actually be spared from a 50-70% loss in the S&amp;P 500 in the coming years, but again, it will be fine with us if the market never approaches historical valuation norms again. With the adaptations we introduced in late-2017, our discipline is flexible enough to navigate a bubble even without embracing its premise.</p>\n<p><b>An unusual overlap of high-risk conditions</b></p>\n<p>Returning to Modigliani, my impression is that the advance of recent years to the most extreme valuations in history reflects exactly the bubble dynamics he described, and I expect that it will also end as he described (though not necessarily in one fell swoop): \"The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.\"</p>\n<p>One of our internal gauges tracks the correlation of market conditions with certain high-risk features that have preceded steep market collapses - a collection of measures capturing valuations, internals, sentiment, leverage, overextension, and yield pressures. Only a handful of instances in history overlap pre-crash conditions as well as they do at present. The current overlap is actually quite similar to August 1987. Meanwhile, the correlation of current conditions with features typically observed at market lows is the most negative in history.</p>\n<p>If you want my opinion, I suspect that a near-vertical market plunge on the order of 25-35% is coming, probably quite shortly, most likely out of the blue, as in 1987, driven by nothing more than the sudden concerted effort of overextended investors to sell, and the need for a large price adjustment in order to induce scarce buyers to take the other side.</p>\n<p>As usual, no forecasts are necessary. We'll align our investment stance in response to the valuations and market action that we observe at each point in time. Still, it's of particular concern that these overlaps are occurring in the context of the most extreme valuations in history, along with strikingly dysfunctional pockets of illiquidity in many individual issues. This dysfunctional behavior isn't about any particular video game retailer. I suspect it's actually about some sort of fragility or segmentation in order-flow mechanisms, possibly coupled with poorly managed derivatives exposure.</p>\n<p>As I used to teach my students, show me a financial debacle, and I'll show you someone who had a leveraged, mismatched position that they were suddenly forced to close into an illiquid market.</p>\n<p>Though my concerns run far beyond the amount of leverage in the system, it isn't helpful that the amount of leverage in the U.S. equity markets is now easily the highest in history. Some observers are inclined to bring this figure down by dividing instead by the market capitalization of equities. But here's some useful arithmetic:</p>\n<p>Margin Debt/GDP = Margin Debt/Market Cap x Market Cap/GDP</p>\n<p>To say that margin debt to GDP is at the highest level in history is to say not only that stocks are heavily owned on margin, but that those stocks are also breathtakingly overvalued. That combination is particularly worrisome.</p>\n<blockquote>\n All crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.\n</blockquote>\n<blockquote>\n - John Kenneth Galbraith, A Short History of Financial Euphoria\n</blockquote>\n<p><img src=\"https://static.tigerbbs.com/dc55dacbd5e01016cd9964422f941b0c\" tg-width=\"983\" tg-height=\"556\"></p>\n<p>The kind of event I'm suggesting would not bring valuations anywhere near historical valuation norms. Given current valuation extremes, it would be more like a palate cleanser. I have no particular expectation about what the next dish would be. In the event we do observe an abrupt market collapse, the Fed will undoubtedly respond with some new palliative. Whether or not it is effective will depend on the context of risk-aversion, inflation, credit risk, and other conditions at the time. The larger problem, as we've discussed, is that you can't \"save\" an overvalued asset by propping up its price. The value is in the future cash flows that will be delivered to investors over time. The elevated price only ensures that the long-term return between now and then will be dismal.</p>\n<p>Of course, nothing in our discipline relies on a market plunge. Given the combination of hypervaluation and divergent market internals (largely based on debt securities, but with increasing divergences in equities as well), I do believe that the stock market remains in a \"trap door\" situation. Still, that view will change as market conditions change. We'll refrain from adopting or amplifying a negative outlook if our measures of market internals improve. That discipline has served us well even amid record highs. Again, no forecasts are required, nor does this opinion drive our current investment stance. I just think the correlation with historical pre-crash conditions is worth noting.</p>\n<blockquote>\n How little, it will perhaps be agreed, was either original or otherwise remarkable about this history. Prices driven up on the expectation that they would go up, the expectation realized by the resulting purchases. Then the inevitable reversal of these expectations because of some seemingly damaging event or development or perhaps merely because the supply of intellectually vulnerable buyers was exhausted. Whatever the reason (and it is unimportant), the absolute certainty is that this world ends not with a whimper but with a bang. And so on to the moment of mass disillusion and the crash. This last, it will now be sufficiently evident, never comes gently. It is always accompanied by a desperate and largely unsuccessful effort to get out.\n</blockquote>\n<blockquote>\n - John Kenneth Galbraith on the 1929 collapse\n</blockquote>\n<p><b>Valuations and investment duration</b></p>\n<p>To understand why extreme valuations imply high volatility, and require extremely long investment horizons, it's useful to consider the concept of \"duration.\"</p>\n<p>Every security is a claim on a stream of future cash flows that can be expected to be delivered to the investor over time. While the concept of \"duration\" is most commonly used for bonds, it's actually applicable to any security, no matter how \"lumpy\" the stream of cash flows might be.</p>\n<p>If you don't like math, feel free to skim over the various equations and just read the pull quotes. I've provided the details just for completeness.</p>\n<p>The \"duration\" of a security can be defined in two ways.</p>\n<p>Investment horizon: the weighted average number of years it takes for the security to deliver its payments. For each period, you take the share of total present value represented by that year's payment, and multiply it by the number of years in the future the payment will be received. Add them all up. The result is the number of years from today (a weighted average) that the present value of your investment will be repaid. For example, the duration of a security that delivers a single payment a decade from now is simply 10 years.</p>\n<p>Elasticity: the percentage change in the security in response to a change in the underlying gross rate of return. Technically, elasticity is (-dP/P)/(dk/1+k). For example, suppose you own a security that will pay $100 a decade from now, and it's priced at $82.0348, for a 2% annual return. Now assume the expected return moves to 2.01%. The price would drop to $81.9544. Elasticity is (0.0804/82.0348)/(0.0001/1.02) = 10%</p>\n<p>It turns out that the \"duration\" of a security in years is identical to its \"duration\" in terms of the percentage change of price in response to a 1% fluctuation in expected returns. Duration is also the holding period that \"immunizes\" the investor against changes in expected returns over time. In other words, assuming you reinvest your cash flows over time, duration gives you a good idea of how long you have to hold the security in order for your ending wealth to be largely independent of the fluctuations that the security experiences over that horizon.</p>\n<p>If you know differentiation, can prove to yourself that the \"modified duration\" of the S&amp;P 500 is essentially the inverse of the dividend yield. The modified duration is just (-dP/P)/dk or Macaulay duration/(1+k).</p>\n<p>Consider P = D/(k-g). Differentiating with respect to k, dP/dk = -P/(k-g), so duration (-dP/P)/dk = P/D.</p>\n<p>Here's how to think about the link between valuations and duration. Presently, the dividend yield of the S&amp;P 500 is 1.48%. If the yield moves to 1.49%, holding dividends constant, prices drop by 1.48/1.49-1 = -0.67% on that 1 basis point move. Duration is just that sensitivity, defined for a 100 basis point move, which would be 67. It turns out that's also the weighted-average number of years from today that you'll receive your present value, if you invest today.</p>\n<p>Compare that to the typical situation over the past century, when the dividend yield of the S&amp;P 500 averaged about 3.7%. At normal valuations, a 1 basis point increase in the dividend yield would produce a price drop of 3.7/3.71-1 = 0.27%, implying a duration of 27 years.</p>\n<blockquote>\n It turns out that the 'duration' of a security in years is identical to its 'duration' in terms of the percentage change of price in response to a 1% fluctuation in expected returns. Duration is also the holding period that 'immunizes' the investor against changes in expected returns over time.\n</blockquote>\n<p>Historically, investors wishing to match the duration of their investment portfolio to the duration of their investment horizon could be reasonably comfortable holding 100% of their assets in stocks, provided they had an investment horizon of about 25-30 years. Presently, these investors would need an investment horizon closer to 65-70 years. They are currently holding sippy cups.</p>\n<p><b>Scarcity, usefulness, and value</b></p>\n<p>While we're on the subject of bubbles, I'll add a few comments on Bitcoin, just for fun. I'd write more, but my sides still hurt from laughing.</p>\n<p>Objects like tulip bulbs and Bitcoin differ from securities in that they do not deliver a stream of cash flows to the holder. Instead, what objects like tulips and currencies provide is a little stream of services over time, for example, as a perennial thing of beauty or as a means of payment. What people sometimes forget is that it is not just scarcity that defines the value of an object, but the stream of useful \"services\" that it provides (for some reason, nobody wants to buy my unique, limited edition, digitally-signed porcupine seat covers). The price of the object, and the stream of services it provides, should be commensurate.</p>\n<p>U.S. dollars, for example, have value primarily because they are tethered to the real economy by fiat (they legally must be accepted as a means of payment, as noted on the face of any dollar bill), and they represent the entire substrate of the banking system - nearly every payment that goes back and forth in the U.S. economy represents a transfer of base money. Base money (currency and bank reserves) provides billions of little \"services\" over time.</p>\n<p>With every transaction, reserves move electronically from bank to bank between one account holder and another. That combination of legal fiat and constant use as a substrate of the payments system is what gives money \"value.\" That value also means that the U.S. government essentially obtains revenue as \"seigniorage\" for producing the stuff. For those who imagine that governments are going to surrender that revenue in favor of using Bitcoin, I've got a non-fungible token to sell you.</p>\n<p><img src=\"https://static.tigerbbs.com/747b2ba31a8d94d85d374d12b13b3c96\" tg-width=\"665\" tg-height=\"718\"></p>\n<p>As I've noted before, blockchain is a brilliant algorithm, and I expect that it will have a great number of uses for secure transactions and inventory management. Bitcoin, however, is a token generated by an energy-inefficient, replicable blockchain app. Ultimately, its value rests on the capacity to provide transactions services, yet without fiat to require its use, and with strikingly narrow bandwidth - one block of roughly 2000 transactions every 10 minutes - that I expect will prove to be a wildly limiting feature. That's a problem in a world where speculators now value the stock of bitcoin at one-fifth the value of the entire U.S. monetary base.</p>\n<blockquote>\n If you think about how money is valued, it's clear that people accept it because they believe it will provide a claim on the future output of others. Of course, that expectation requires that future producers will also give away their output and accept the money, on the belief that yet other future producers will do the same. That expectation has to continue indefinitely. Like the question 'What holds up Atlas when Atlas holds up the world?' it's not enough to answer that he's standing on a turtle. It's got to be turtles all the way down. The value of money has an enormous psychological component.\"\n</blockquote>\n<blockquote>\n - John P. Hussman, Ph.D., Turtles All the Way Down, February 2019\n</blockquote>\n<p>Of course, Bitcoin may have a certain user base as a vehicle for money laundering and black market transactions, but that's an undesirable investment thesis. The vast majority of transactions are to exchange Bitcoin itself, though the New York Times did recently report that \"pornography, patio furniture, and an at-home coronavirus test are among the odd assortment of goods and services that people are purchasing with the cryptocurrency.\" So, basically, if your typical day consists of surfing porn on your patio while testing yourself for COVID, you're gonna want to look into Bitcoin.</p>\n<p>My largest concern is that people are actually forking over hard-earned savings in exchange for these tokens, which allows early \"miners\" to cash out. That's essentially the defining feature of a Ponzi scheme. Like all speculative bubbles that rely on increases in price, rather than cash flows generated by the production of value-added goods and services, Bitcoin isn't actually creating \"wealth.\" It's only creating the opportunity for wealth transfer, primarily from those who will end up holding the bag.</p>\n<p>Bitcoin has certain characteristics of base money in the sense that it's exchanged on an electronic ledger, but by design, transactions are limited to an average of about 2000 per block, with one block successfully validated, on average, every 10 minutes. In order to validate a transaction block, CPU farms across the world grind out terahashes of random SHA256 validation attempts in order to discover a sufficiently small binary that matches the cryptographic hash of the block.</p>\n<p>All of this \"mining\" burns up about as much energy as it takes to run a modest-sized country. Validating a block of transactions produces a reward to the miner (and dilution of the coinbase) of 6.25 Bitcoin per block, which currently works out to nearly $200 per transaction. Yet the value of the median transaction in Bitcoin is only about $1000 in the first place.</p>\n<p>There's a rather primitive regression analysis floating around (tagged as \"sophisticated\" by some observers who apparently go numb at the word \"logarithm\") that attempts to relate the log price of bitcoin to the log \"stock/flow\" ratio, as if it represents some mechanistic supply-demand relationship. Aside from the fact that the correlation between two diagonal lines is always about 0.9-something, I find that one can obtain a better fit just by regressing the log price of Bitcoin on the log ratio of block difficulty/block reward, which is basically a measure of how much energy one needs to waste in order to mine a new bitcoin.</p>\n<p>So the \"value\" of Bitcoin is partially linked to the backward-looking sunk cost of the energy wasted to mine these tokens. Still, I wouldn't dream of using this sort of \"model\" to trade an object whose \"value\" is primarily in the heads of speculators. Use it if you like. If you happen make money on it, feel free send me a check, preferably in U.S. dollars.</p>\n<p>Undoubtedly, this view of Bitcoin will be unpopular among those who associate holding Bitcoin with superpowers like laser eyes and diamond hands. \"Not surprised Hussman doesn't get Bitcoin. Few do.\" M'kay. Look, there's certainly a case to be made that a speculative mindset creates its own reality, and while it does, there's an opportunity to obtain wealth transfers from frantic late-comers who can no longer tolerate missing out. Tulips gonna tulip. Not my gig, thanks.</p>\n<blockquote>\n In the short run, it will be said to be an attack, motivated by either deficient understanding or uncontrolled envy, of the wonderful process of enrichment. Those involved with the speculation are experiencing an increase in wealth - getting rich or being further enriched. No one wishes to believe that this is fortuitous or undeserved; all wish to think that it is the result of their own superior insight or intuition. As long as they are in, they have a strong pecuniary commitment to belief in the unique personal intelligence that tells them there will be yet more. Accordingly, possession must be associated with some special genius. Speculation buys up, in a very practical way, the intelligence of those involved. Only after the speculative collapse does the truth emerge. What was thought to be unusual acuity turns out to be only a fortuitous and unfortunate association with the assets.\n</blockquote>\n<blockquote>\n - John Kenneth Galbraith, A Brief History of Financial Euphoria\n</blockquote>","source":"lsy1615871319183","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How To Spot A Bubble</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow To Spot A Bubble\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-16 13:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.hussmanfunds.com/comment/mc210315/><strong>Hussman Funds</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nThe defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations.\nIf we compare our most reliable valuation measures...</p>\n\n<a href=\"https://www.hussmanfunds.com/comment/mc210315/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".IXIC":"NASDAQ Composite",".DJI":"道琼斯",".SPX":"S&P 500 Index"},"source_url":"https://www.hussmanfunds.com/comment/mc210315/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1172271196","content_text":"Summary\n\nThe defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations.\nIf we compare our most reliable valuation measures with the valuation measures that one would obtain from a proper long-term discounted cash flow analysis, we find that they're nearly identical.\nOne of the unfortunate bits of financial illiteracy that Wall Street has pushed into the heads of investors is the idea that extreme valuations are \"justified\" by low interest rates.\nIt's undoubtedly true that profit margins, expected growth, and other factors have an effect on future deliverable cash flows and the valuations that investors place on stocks.\nTo understand why extreme valuations imply high volatility, and require extremely long investment horizons, it's useful to consider the concept of \"duration.\"\n\n\n I can show, really precisely, that there are two warranted prices for a share. The one I prefer is based on such fundamentals as earnings and growth rates, but the bubble is rational in a certain sense. The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.- Nobel Laureate Franco Modigliani, New York Times, March 30, 2000\n\nThe word \"bubble\" is tossed around quite a bit in the financial markets, but it's rarely used correctly. See, the thing that defines a bubble isn't that valuations are extremely high, or that expected returns are extremely low. Instead, what defines a bubble is that investors drive valuations higher without simultaneously adjusting expectations for returns lower. That is, investors extrapolate past returns based on price behavior, even though those expectations are inconsistent with the returns that would equate price with discounted cash flows.\nIn March 2000, at the height of the technology bubble, I noted: \"Over time, price/revenue ratios come back in line. Currently, that would imply an 83% plunge in tech stocks. If you understand values and market history, you know we're not joking.\" The following month, I discussed Modigliani's quote above, and detailed the dynamics he was describing. The collapse of the 2000 bubble would ultimately erase half the value of the S&P 500, and would take the tech-heavy Nasdaq 100 down an implausibly precise 83%.\nThe defining feature of a bubble is inconsistency between expected returns based on price behavior and expected returns based on valuations. If investors pay $150 today for a security that will deliver a single $100 payment a decade from now, but they also fully understand that they'll lose 4% annually on the deal, without extrapolating past gains into the future, then we might say the security is overvalued, and we might question why investors would accept that trade, but we can't call it a bubble.\nBut if investors pay $150 today for that security, because they look back in the rear-view mirror, decide that it \"always goes up\" over time, and convince themselves that expected future returns are always positive, then you've got a bubble. Discounting the future $100 cash flow of the security using any positive expected return would produce a price less than $100. So the positive returns expected by investors are inconsistent with the returns that would equate price with discounted cash flows. The size of the bubble is the fraction of the market price that represents expectational \"hot air.\"\nLikewise, the willingness of investors to embrace \"passive investments\" like ETFs and asset-backed securities based on past performance, with little concern about the valuations, yields, or credit risk of the securities inside, is the very soap from which bubbles repeatedly emerge. Amid the current enthusiasm for special purpose acquisition companies (SPACS), investors might recall the bubble in \"incubators\" at the 2000 peak, the \"conglomerates\" of the late-1960s Go-Go bubble, and even the South Sea Company in the early 1700s, along with similar companies formed at the time \"for carrying on an undertaking of great advantage, but nobody to know what it is.\"\nIf investors price the S&P 500 at levels that are highly likely to produce negative returns for a decade, as they did in 1929 and 2000, and as I believe they are doing at present, yet investors continue to press stock prices higher on the expectation that they will provide historically normal levels of future return regardless of valuations, then you have the sort of inconsistency that defines a bubble.\nLikewise, if the expected return of a conventional passive investment mix is negative on a 10-12 year horizon (based on reliable valuation measures strongly correlated with actual subsequent returns over a century of market history), yet pension return assumptions remain locked near 7% annually, you've got a bubble, and most likely a future pension funding crisis, on your hands.\nThis is how very bad things have repeatedly happened in the financial markets across history, enabled by what Galbraith called \"the extreme brevity of the financial memory.\"\nWhen Modigliani says that there are two \"warranted\" prices, he means that - at least in the short run - there are two ways that prices can fulfill the expectations of investors. In one case, investors have expectations about future returns, and those expectations are informed by the level of valuations. If prices rise, and expected cash flows haven't changed, investors recognize that future returns will be lower. In the \"bubble\" case, investors have high expectations about future returns, mainly based on past returns, and they act on those expectations by driving prices up further. So the expectation of additional price increases is simply reinforced. \"The expectation of growth produces the growth, which confirms the expectation.\"\nOnly one of these prices is consistent, in that the rate of return expected by investors is also the rate of return that equates price with discounted future cash flows. The other price becomes increasingly detached from fundamentals, as a larger and larger fraction of the price represents hot air, and it ultimately collapses as the gap becomes untenably wide.\nDuring speculative segments of the market cycle, there's nothing that forces investors to recognize that higher valuations imply lower returns, or to change their expectation of high returns as far as the eye can see. That, of course, is why we use measures of market internals to gauge the inclination of investors toward speculation or risk-aversion. Valuation provides an enormous amount of information about likely long-term returns and potential market losses over the complete cycle. But valuation isn't a timing tool. In recent years, it hasn't even imposed a limit on speculative recklessness.\nStill, with each price advance, the actual long-term return implied by future cash flows - what investors will ultimately realize as those cash flows are delivered - collapses further, even while investors act on their delusion that long-term returns have nothing to do with price. Eventually, the bulk of the security price represents a bubble component, not the price that would actually need to exist in order for the long-term expectations of investors to be accurate.\nAs I wrote at the 2000 market peak:\n\n \"As long as investors focus on year-to-year returns and not discounted cash flow calculations, the bubble can continue to grow in self-reinforcing fashion. Investors anticipate a high return, and the price behavior reinforces the expectation. The true long-term return becomes increasingly detached from the long-term return imagined by investors, and the bubble component accounts for an increasingly large proportion of the total price.\"\n\nBy our most reliable measures, run-of-the-mill historical valuation norms are roughly 70% below current levels. I know you don't want to believe that.\n\nThe trap door quietly swings open when valuations are extreme and market internals begin to deteriorate. That's the situation we've observed in our measures in recent weeks, with the initial deterioration largely driven by debt securities, but with increasing divergences in equities as well.\nValuations and discounted cash flows\n\n Valuations measure the tradeoff between current prices and a very long-term stream of expected future cash flows. Every useful valuation ratio is just shorthand for that calculation. Every valuation ratio that fails that criterion is inferior, and you can show it in historical data.\n\n\n - John P. Hussman, Ph.D., The Meaning of Valuation, December 2019\n\nI've often noted that the denominator of every good valuation measure is just shorthand for the decades and decades of cash flows that the security is likely to deliver in the future. In fact, we always test the validity of the valuation measures we use by examining:\na) how strongly the resulting valuation measures are correlated with actual subsequent total returns, and;\nb) how closely they replicate an explicit discounted cash flow analysis.\nBelow, we'll examine a variety of valuation measures that offer some perspective on why I view the U.S. equity market as a bubble near the breaking point. Along the way, I'll point out some interesting features of valuations and their relationship with subsequent returns. If math gives you hives, feel free to skim over the small amount that I've included here and there.\nConsider first the relationship between valuations and subsequent returns. I'll state the following, which you can prove to yourself by toying around a bit with present value models: the logarithm of a good valuation measure should have an inverse and roughly linear relationship with the expected subsequent investment return.\nHere's a simple example of what this looks like.\n\nHere's what this looks like for MarketCap/GVA, our most reliable stock market valuation measure\n\nDuring the past three decades, we've studied and introduced a broad range of valuation measures. Most can be calculated back to 1947. Some can be evaluated over a century or more. Across history, even in recent decades, we find that the valuation measures that are best correlated with actual subsequent returns are those with muted sensitivity to cyclical fluctuations in profit margins, and that behave largely like broad, market-wide price/revenue ratios.\nIf we compare our most reliable valuation measures with the valuation measures that one would obtain from a proper long-term discounted cash flow analysis, we find that they're nearly identical. Here's what this comparison looks like for the actual stream of dividends (including the impact of repurchases) delivered by the S&P 500 since 1900, discounted at a fixed 10% rate (see the chart text for additional details).\nThe reason we use a fixed rate of return is that a multiple of 1.0 is then, by definition, the level at which the S&P 500 would have been priced for that particular level of expected return. Any deviation in the valuation multiple from 1.0 then gauges how far likely future returns are from that \"typical\" expected return. We're currently farther away from \"typical\" expected returns than at any moment in history, including the 1929 and 2000 market peaks.\n\nOne of the unfortunate bits of financial illiteracy that Wall Street has pushed into the heads of investors is the idea that extreme valuations are \"justified\" by low interest rates. Now, it's certainly true that holding future cash flows constant, raising the price of an investment will lower the embedded rate of return, and vice versa. If you pay $32 today for $100 a decade from today, you can expect a 12% annual return. If you pay $82 for the same security, you can expect a 2% annual return. If you pay $100 today, you can expect nothing. So it's clearly true that holding future cash flows constant, a lower rate of return implies a higher level of valuation.\nThe reason the statement \"low interest rates justify high valuations\" contributes to financial illiteracy is that the statement has been learned entirely out of context of the arithmetic. As a result, investors seem to imagine that, as long as high valuations can be \"justified,\" stocks can be expected to provide historically normal rates of return in the future. Likewise, investors seem to have no concept that if interest rates are low because growth rates are low, no valuation premium is \"justified\" for stocks, because the lower growth is already sufficient to bring future stock returns down to levels that are commensurate with the low level of interest rates.\nThe truth is simple but uncomfortable. If interest rates are low and expected growth is held constant, higher valuations imply lower long-term returns. If interest rates are low because expected future growth is also low, higher valuations are not required. Long-term returns will be lower anyway. A valuation premium just makes future returns even worse.\nSaying that extremely low interest rates \"justify\" extremely high stock valuations is identical to saying that extremely low future returns on bonds \"justify\" extremely low future returns on stocks. I don't really think that's something Wall Street cares to clarify when it tells investors that stock market valuations are \"justified.\"\nInvestment valuation is concerned with the relationship between three objects: the current price, the future cash flows, and the rate of return that connects the two like a string. The lower the current price and the higher the future cash flows, the steeper the string. The higher the current price and the lower the future cash flows, the flatter the string. Raise the current price above the future cash flows, and the string will point down instead of up. Given any two of these objects, you can calculate the third one.\nFor example, if you want to estimate expected long-term returns, you need two objects: a) the current price and b) the expected stream of future cash flows. A good valuation ratio is just shorthand for those two objects, so you can estimate the long-term return directly from the level of valuation. Then, if you like, you can compare it with the level of interest rates. That comparison can be useful, because even when investors realize that high stock market valuations imply low long-term returns, it's not at all clear that they realize how low long-term return prospects have been driven.\nThe chart below shows our estimate of expected 12-year S&P 500 total returns over-and-above Treasury bond yields, across a century of market history. Compare this with the nearly useless drivel that Wall Street passes off as the \"equity risk premium\" (typically quoted as the S&P 500 forward earnings yield minus the 10-year Treasury yield). Yes, you're reading the chart correctly. Given current valuations, we expect the total return of the S&P 500 to underperform the lowly yield on Treasury bonds by roughly -6% annually over the coming 12-year period.\n\nMany investors confuse the estimation of expected returns (which requires only expected cash flows and the observed price) with a different problem - the estimation of \"fair value.\" See, interest rates come into the picture when you have an expected stream of future cash flows and you want to calculate a \"fair\" current price. In that case, rather than picking an arbitrary rate of return from a hat, it's common to use the level of interest rates, plus some risk premium, as the expected long-term return (or discount rate, or capitalization rate). This sort of calculation can be super-sensitive to arbitrary choices.\nIn particular, Wall Street loves to combine super-high growth rates, super-low discount rates, and super-long time horizons, which allows one to calculate a \"fair value\" that's as close to infinity as possible. The thing to remember is that whatever rate of return an analyst embeds into the fair value calculation is also the long-term rate of return you'll earn over time if you pay that price, assuming the future cash flows are delivered as expected.\nAmong scores of measures we've evaluated or introduced over time, MarketCap/GVA (nonfinancial market capitalization to corporate gross value-added, including our estimate of foreign revenues) has the highest correlation with actual subsequent 10-12 year S&P 500 total returns, followed by our Margin-Adjusted P/E (MAPE). I find it hilarious that the various valuation measures I've introduced over time are sometimes described as products of \"machine learning,\" \"data mining,\" and \"curve fitting\" when they are, in fact, just different versions of an apples-to-apples economy-wide price/revenue ratio.\n\nThe S&P 500 price/revenue ratio and nonfinancial market capitalization to GDP (the \"Buffett indicator\") also perform well, and better than earnings-based alternatives like price/forward earnings, the Fed Model, and even the Shiller CAPE. See, while earnings are necessary to generate long-term cash flows, they are also subject to fluctuations in profit margins (both cyclically and even from decade to decade) that turn out to be highly uninformative.\nEconomically, fluctuations in profit margins are driven primarily by fluctuations in real unit labor costs. Because companies compete on the basis of realized after-tax profits rather than pre-tax profits, changes in tax policy also have far less durable impact on corporate profits than investors seem to imagine. While corporate profits got a tremendous boost last year from CARES spending (the deficit of one sector always emerges as the surplus of another), here's what the relationship between corporate profits and real unit labor costs looks like historically.\nReal unit labor costs are presented on an inverted left scale. The upward pressure on labor costs (observed as a plunge in the blue line) isn't particularly auspicious for future profits. Still, there's so much distortion in recent quarters that I'd consider the jury to be out on how much of this will be sustained.\n\nIt's undoubtedly true that profit margins, expected growth, and other factors have an effect on future deliverable cash flows and the valuations that investors place on stocks. But even for technology stocks, these assumptions should be made explicit and tested against history. You'll find that observable measures like price/revenue are still very serviceable. In fact, the extreme price/revenue multiples of technology stocks helped to inform my March 2000 projection of an 83% loss in that sector.\nAs Benjamin Graham wrote, \"The habit of relating what is paid to what is being offered is an invaluable trait in investment. The more dependent the valuation becomes on anticipations of the future - and the less it is tied to a figure demonstrated by past performance - the more vulnerable it becomes to possible miscalculation and serious error.\"\nThe current 5.19 price/revenue multiple for the Nasdaq 100, is the most extreme level since February 2001, which was followed by a 60% loss in the index (after it had already dropped in half). The situation is actually a bit worse than 2001 here. If one examines the largest components of the index, it becomes clear that their annual growth rates have declined substantially over time.\nAs a result, a dollar of current revenues should arguably command a smaller multiple than a dollar of revenues might have during earlier periods of emerging growth. Yet even if one takes the Nasdaq 100 price/revenue ratio at face value, and even if one restricts attention to the bubble period since 2000, it's difficult to expect the Nasdaq to produce total returns over the coming decade much better than zero.\n\nYou don't really want to see what the same chart looks like for the S&P 500.\n\nThe same is true, unfortunately, for passive investment strategies. We presently estimate negative 12-year average annual total returns for a conventional passive investment mix invested 60% in the S&P 500, 30% in Treasury bonds, and 10% in Treasury bills.\nIn a 2019 white paper, I detailed an approach to estimate a \"value-focused asset allocation\" by jointly considering prevailing stock market valuations and interest rates. It specifies an investment allocation based on which asset class is estimated to have the highest average annual expected return, adjusted for risk, to each point in a long-term investment horizon. That allocation can then be modified by a risk-management component, to adjust the exposure during segments of the market cycle where risk-aversion or speculation among market participants may temporarily drive valuations to depressed or elevated levels. The white paper includes numerous charts showing how this value-focused asset allocation has changed across market history, particularly at important peaks and troughs in the stock and bond markets.\nAlong with those methods, I introduced our \"Endowment/spending multiple,\" which estimates the number of years of spending that a passive 60/30/10 investor requires up-front, in order to finance an expected 36-year stream of future inflation-adjusted spending. The idea here is that in a deeply undervalued market with high expected future returns, investors can finance a future stream of spending with far less than they require when valuations are extreme and prospective returns are low.\nYou know you're in a bubble when funding a 36-year stream of expected inflation-adjusted spending requires over 38 years of money up-front.\n\nIn the chart below, the Endowment/spending multiple is presented on an inverted log scale (left), along with the actual subsequent average annual total return of a 60/30/10 portfolio mix (right scale). Needless to say, we adhere to investment disciplines that are intended to address problems like this.\n\nAs a testament to the breadth of this speculative episode, the median price/revenue ratio of S&P 500 components now exceeds 3.3, easily a record, and extreme enough to provoke distress about the potential losses that innocent but poorly-informed investors may experience over the completion of this cycle.\n\nThe next chart shows the median price/revenue ratio of S&P 500 components sorted into 10 deciles by valuation. The chart is presented on log scale to allow each line to be compared with its own history. Each segment on the vertical axis represents a doubling of valuations. Notice that every single decile of S&P 500 components is at record valuation extremes. Investors now rely on a permanently high plateau in these extremes.\n\nIt's interesting, but far less important, that the median price/earnings ratio of S&P 500 components has also reached 32.4, the highest level in history. This compares with a median P/E of 19.4 at the 2000 market peak. The problem with P/E multiples, of course, is that they are substantially affected by earnings variability. In fact, prior to the current peak, the highest median P/E for the S&P 500 was actually in March 2002, when the index was down 25% from the March 2000 bubble highs. That's because earnings were down far more by then, which boosted P/E ratios. Such is the danger of taking P/E multiples at face value.\nA crude but reasonably effective way to get around the cyclicality of earnings (but only for very broad indices), is to compare prices to the highest level of earnings achieved to-date. I introduced this metric back in 1998 as the price-to-peak-earnings ratio. The chart below shows a version of that. The blue line (left scale) shows the ratio of total U.S. equity market capitalization to GDP. The red line (right scale) shows the ratio of total U.S. equity market capitalization to the highest level of economy-wide U.S. profits to date. Investors have gotten themselves into trouble here.\n\nWhat if valuations remain extreme forever?\nProbably the single most frequent question I've heard from investors over the past couple of years is \"What happens if valuations remain extreme forever?\" It's actually a version of the \"permanently high plateau\" that Irving Fisher disastrously projected in 1929. Still, recent years have produced enormous confidence among investors that the Federal Reserve's purchases of Treasury debt can permanently \"backstop\" the stock market.\nAs I've detailed previously, quantitative easing supports the market only by creating zero interest hot potatoes that are uncomfortable for investors to hold (provided that they're inclined toward speculation), and that are impossible to get rid of in aggregate. Moreover, the Fed's purchases of corporate bonds during the pandemic were legally constrained to CARES funds provided by the Treasury, and ultimately amounted to $14 billion of bonds, in an economy with $11 trillion in corporate debt at $58 trillion in equity market capitalization.\nSuffice it to say that the \"Fed backstop\" is largely in the minds of investors, and relies almost exclusively on the psychological discomfort of holding low-yielding base money. Yet since perception can be indistinguishable from reality, particularly in the short run, it's important to entertain the question.\nMy answer is that if the Fed is indeed able to maintain valuations at the highest levels in history, forever, stock prices would likely grow at roughly the same rate as nominal GDP. So figure 1.6% real structural growth plus 2% inflation gets you 3.6%. Let's call it 4%, which would match nominal GDP growth in both the 10-year and 20-year periods ending at the Q4 2019 economic peak, just before the pandemic. The first casualty of rising inflation is stock valuations, so it's not at all clear that assuming higher inflation would help stocks until valuations were roughly normalized, which would require consumer prices to roughly triple.\nThe chart below is a reminder of how structural real GDP growth has progressed over recent decades (driven by demographic labor force growth and trend productivity), and the basis for that 1.6% figure for structural real GDP growth.\n\nSticking with 4% nominal growth, and adding a 1.5% dividend yield, a \"permanently high plateau\" in market valuations would imply S&P 500 total returns of about 5.5% annually. Again, this assumes that valuations never retreat from levels that presently stand at about 3.6 times their historical norms. Simply allow them to retreat to 2.4 times their historical norms a decade from now - which would still keep valuations among the highest 10% in U.S. history - and the resulting 10-year total return would drop to about 1.3%. I think this would actually be the best-case scenario even in a permanently overvalued world.\nAt elevated valuations, even very small changes in expected return imply enormous changes in prices. So it's unlikely that a period of much higher average valuations will escape the prospect of relatively high volatility. Rather than a 70% market decline, which would presently be required for the S&P 500 to simply touch historically run-of-the-mill valuation norms, investors could expect rather frequent market losses in the 20-35% range, which is essentially what we've seen even over the past few years.\nAll of that would be fine with us. We've adapted our discipline sufficiently (especially in late-2017) to tolerate the possibility of permanently sustained overvaluation. My impression is that the impact of those adaptations has become more evident as we've had greater opportunities to live into them. I can't say that I believe for a second that investors will actually be spared from a 50-70% loss in the S&P 500 in the coming years, but again, it will be fine with us if the market never approaches historical valuation norms again. With the adaptations we introduced in late-2017, our discipline is flexible enough to navigate a bubble even without embracing its premise.\nAn unusual overlap of high-risk conditions\nReturning to Modigliani, my impression is that the advance of recent years to the most extreme valuations in history reflects exactly the bubble dynamics he described, and I expect that it will also end as he described (though not necessarily in one fell swoop): \"The expectation of growth produces the growth, which confirms the expectation; people will buy it because it went up. But once you are convinced that it is not growing anymore, nobody wants to hold a stock because it is overvalued. Everybody wants to get out and it collapses, beyond the fundamentals.\"\nOne of our internal gauges tracks the correlation of market conditions with certain high-risk features that have preceded steep market collapses - a collection of measures capturing valuations, internals, sentiment, leverage, overextension, and yield pressures. Only a handful of instances in history overlap pre-crash conditions as well as they do at present. The current overlap is actually quite similar to August 1987. Meanwhile, the correlation of current conditions with features typically observed at market lows is the most negative in history.\nIf you want my opinion, I suspect that a near-vertical market plunge on the order of 25-35% is coming, probably quite shortly, most likely out of the blue, as in 1987, driven by nothing more than the sudden concerted effort of overextended investors to sell, and the need for a large price adjustment in order to induce scarce buyers to take the other side.\nAs usual, no forecasts are necessary. We'll align our investment stance in response to the valuations and market action that we observe at each point in time. Still, it's of particular concern that these overlaps are occurring in the context of the most extreme valuations in history, along with strikingly dysfunctional pockets of illiquidity in many individual issues. This dysfunctional behavior isn't about any particular video game retailer. I suspect it's actually about some sort of fragility or segmentation in order-flow mechanisms, possibly coupled with poorly managed derivatives exposure.\nAs I used to teach my students, show me a financial debacle, and I'll show you someone who had a leveraged, mismatched position that they were suddenly forced to close into an illiquid market.\nThough my concerns run far beyond the amount of leverage in the system, it isn't helpful that the amount of leverage in the U.S. equity markets is now easily the highest in history. Some observers are inclined to bring this figure down by dividing instead by the market capitalization of equities. But here's some useful arithmetic:\nMargin Debt/GDP = Margin Debt/Market Cap x Market Cap/GDP\nTo say that margin debt to GDP is at the highest level in history is to say not only that stocks are heavily owned on margin, but that those stocks are also breathtakingly overvalued. That combination is particularly worrisome.\n\n All crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.\n\n\n - John Kenneth Galbraith, A Short History of Financial Euphoria\n\n\nThe kind of event I'm suggesting would not bring valuations anywhere near historical valuation norms. Given current valuation extremes, it would be more like a palate cleanser. I have no particular expectation about what the next dish would be. In the event we do observe an abrupt market collapse, the Fed will undoubtedly respond with some new palliative. Whether or not it is effective will depend on the context of risk-aversion, inflation, credit risk, and other conditions at the time. The larger problem, as we've discussed, is that you can't \"save\" an overvalued asset by propping up its price. The value is in the future cash flows that will be delivered to investors over time. The elevated price only ensures that the long-term return between now and then will be dismal.\nOf course, nothing in our discipline relies on a market plunge. Given the combination of hypervaluation and divergent market internals (largely based on debt securities, but with increasing divergences in equities as well), I do believe that the stock market remains in a \"trap door\" situation. Still, that view will change as market conditions change. We'll refrain from adopting or amplifying a negative outlook if our measures of market internals improve. That discipline has served us well even amid record highs. Again, no forecasts are required, nor does this opinion drive our current investment stance. I just think the correlation with historical pre-crash conditions is worth noting.\n\n How little, it will perhaps be agreed, was either original or otherwise remarkable about this history. Prices driven up on the expectation that they would go up, the expectation realized by the resulting purchases. Then the inevitable reversal of these expectations because of some seemingly damaging event or development or perhaps merely because the supply of intellectually vulnerable buyers was exhausted. Whatever the reason (and it is unimportant), the absolute certainty is that this world ends not with a whimper but with a bang. And so on to the moment of mass disillusion and the crash. This last, it will now be sufficiently evident, never comes gently. It is always accompanied by a desperate and largely unsuccessful effort to get out.\n\n\n - John Kenneth Galbraith on the 1929 collapse\n\nValuations and investment duration\nTo understand why extreme valuations imply high volatility, and require extremely long investment horizons, it's useful to consider the concept of \"duration.\"\nEvery security is a claim on a stream of future cash flows that can be expected to be delivered to the investor over time. While the concept of \"duration\" is most commonly used for bonds, it's actually applicable to any security, no matter how \"lumpy\" the stream of cash flows might be.\nIf you don't like math, feel free to skim over the various equations and just read the pull quotes. I've provided the details just for completeness.\nThe \"duration\" of a security can be defined in two ways.\nInvestment horizon: the weighted average number of years it takes for the security to deliver its payments. For each period, you take the share of total present value represented by that year's payment, and multiply it by the number of years in the future the payment will be received. Add them all up. The result is the number of years from today (a weighted average) that the present value of your investment will be repaid. For example, the duration of a security that delivers a single payment a decade from now is simply 10 years.\nElasticity: the percentage change in the security in response to a change in the underlying gross rate of return. Technically, elasticity is (-dP/P)/(dk/1+k). For example, suppose you own a security that will pay $100 a decade from now, and it's priced at $82.0348, for a 2% annual return. Now assume the expected return moves to 2.01%. The price would drop to $81.9544. Elasticity is (0.0804/82.0348)/(0.0001/1.02) = 10%\nIt turns out that the \"duration\" of a security in years is identical to its \"duration\" in terms of the percentage change of price in response to a 1% fluctuation in expected returns. Duration is also the holding period that \"immunizes\" the investor against changes in expected returns over time. In other words, assuming you reinvest your cash flows over time, duration gives you a good idea of how long you have to hold the security in order for your ending wealth to be largely independent of the fluctuations that the security experiences over that horizon.\nIf you know differentiation, can prove to yourself that the \"modified duration\" of the S&P 500 is essentially the inverse of the dividend yield. The modified duration is just (-dP/P)/dk or Macaulay duration/(1+k).\nConsider P = D/(k-g). Differentiating with respect to k, dP/dk = -P/(k-g), so duration (-dP/P)/dk = P/D.\nHere's how to think about the link between valuations and duration. Presently, the dividend yield of the S&P 500 is 1.48%. If the yield moves to 1.49%, holding dividends constant, prices drop by 1.48/1.49-1 = -0.67% on that 1 basis point move. Duration is just that sensitivity, defined for a 100 basis point move, which would be 67. It turns out that's also the weighted-average number of years from today that you'll receive your present value, if you invest today.\nCompare that to the typical situation over the past century, when the dividend yield of the S&P 500 averaged about 3.7%. At normal valuations, a 1 basis point increase in the dividend yield would produce a price drop of 3.7/3.71-1 = 0.27%, implying a duration of 27 years.\n\n It turns out that the 'duration' of a security in years is identical to its 'duration' in terms of the percentage change of price in response to a 1% fluctuation in expected returns. Duration is also the holding period that 'immunizes' the investor against changes in expected returns over time.\n\nHistorically, investors wishing to match the duration of their investment portfolio to the duration of their investment horizon could be reasonably comfortable holding 100% of their assets in stocks, provided they had an investment horizon of about 25-30 years. Presently, these investors would need an investment horizon closer to 65-70 years. They are currently holding sippy cups.\nScarcity, usefulness, and value\nWhile we're on the subject of bubbles, I'll add a few comments on Bitcoin, just for fun. I'd write more, but my sides still hurt from laughing.\nObjects like tulip bulbs and Bitcoin differ from securities in that they do not deliver a stream of cash flows to the holder. Instead, what objects like tulips and currencies provide is a little stream of services over time, for example, as a perennial thing of beauty or as a means of payment. What people sometimes forget is that it is not just scarcity that defines the value of an object, but the stream of useful \"services\" that it provides (for some reason, nobody wants to buy my unique, limited edition, digitally-signed porcupine seat covers). The price of the object, and the stream of services it provides, should be commensurate.\nU.S. dollars, for example, have value primarily because they are tethered to the real economy by fiat (they legally must be accepted as a means of payment, as noted on the face of any dollar bill), and they represent the entire substrate of the banking system - nearly every payment that goes back and forth in the U.S. economy represents a transfer of base money. Base money (currency and bank reserves) provides billions of little \"services\" over time.\nWith every transaction, reserves move electronically from bank to bank between one account holder and another. That combination of legal fiat and constant use as a substrate of the payments system is what gives money \"value.\" That value also means that the U.S. government essentially obtains revenue as \"seigniorage\" for producing the stuff. For those who imagine that governments are going to surrender that revenue in favor of using Bitcoin, I've got a non-fungible token to sell you.\n\nAs I've noted before, blockchain is a brilliant algorithm, and I expect that it will have a great number of uses for secure transactions and inventory management. Bitcoin, however, is a token generated by an energy-inefficient, replicable blockchain app. Ultimately, its value rests on the capacity to provide transactions services, yet without fiat to require its use, and with strikingly narrow bandwidth - one block of roughly 2000 transactions every 10 minutes - that I expect will prove to be a wildly limiting feature. That's a problem in a world where speculators now value the stock of bitcoin at one-fifth the value of the entire U.S. monetary base.\n\n If you think about how money is valued, it's clear that people accept it because they believe it will provide a claim on the future output of others. Of course, that expectation requires that future producers will also give away their output and accept the money, on the belief that yet other future producers will do the same. That expectation has to continue indefinitely. Like the question 'What holds up Atlas when Atlas holds up the world?' it's not enough to answer that he's standing on a turtle. It's got to be turtles all the way down. The value of money has an enormous psychological component.\"\n\n\n - John P. Hussman, Ph.D., Turtles All the Way Down, February 2019\n\nOf course, Bitcoin may have a certain user base as a vehicle for money laundering and black market transactions, but that's an undesirable investment thesis. The vast majority of transactions are to exchange Bitcoin itself, though the New York Times did recently report that \"pornography, patio furniture, and an at-home coronavirus test are among the odd assortment of goods and services that people are purchasing with the cryptocurrency.\" So, basically, if your typical day consists of surfing porn on your patio while testing yourself for COVID, you're gonna want to look into Bitcoin.\nMy largest concern is that people are actually forking over hard-earned savings in exchange for these tokens, which allows early \"miners\" to cash out. That's essentially the defining feature of a Ponzi scheme. Like all speculative bubbles that rely on increases in price, rather than cash flows generated by the production of value-added goods and services, Bitcoin isn't actually creating \"wealth.\" It's only creating the opportunity for wealth transfer, primarily from those who will end up holding the bag.\nBitcoin has certain characteristics of base money in the sense that it's exchanged on an electronic ledger, but by design, transactions are limited to an average of about 2000 per block, with one block successfully validated, on average, every 10 minutes. In order to validate a transaction block, CPU farms across the world grind out terahashes of random SHA256 validation attempts in order to discover a sufficiently small binary that matches the cryptographic hash of the block.\nAll of this \"mining\" burns up about as much energy as it takes to run a modest-sized country. Validating a block of transactions produces a reward to the miner (and dilution of the coinbase) of 6.25 Bitcoin per block, which currently works out to nearly $200 per transaction. Yet the value of the median transaction in Bitcoin is only about $1000 in the first place.\nThere's a rather primitive regression analysis floating around (tagged as \"sophisticated\" by some observers who apparently go numb at the word \"logarithm\") that attempts to relate the log price of bitcoin to the log \"stock/flow\" ratio, as if it represents some mechanistic supply-demand relationship. Aside from the fact that the correlation between two diagonal lines is always about 0.9-something, I find that one can obtain a better fit just by regressing the log price of Bitcoin on the log ratio of block difficulty/block reward, which is basically a measure of how much energy one needs to waste in order to mine a new bitcoin.\nSo the \"value\" of Bitcoin is partially linked to the backward-looking sunk cost of the energy wasted to mine these tokens. Still, I wouldn't dream of using this sort of \"model\" to trade an object whose \"value\" is primarily in the heads of speculators. Use it if you like. If you happen make money on it, feel free send me a check, preferably in U.S. dollars.\nUndoubtedly, this view of Bitcoin will be unpopular among those who associate holding Bitcoin with superpowers like laser eyes and diamond hands. \"Not surprised Hussman doesn't get Bitcoin. Few do.\" M'kay. Look, there's certainly a case to be made that a speculative mindset creates its own reality, and while it does, there's an opportunity to obtain wealth transfers from frantic late-comers who can no longer tolerate missing out. Tulips gonna tulip. Not my gig, thanks.\n\n In the short run, it will be said to be an attack, motivated by either deficient understanding or uncontrolled envy, of the wonderful process of enrichment. Those involved with the speculation are experiencing an increase in wealth - getting rich or being further enriched. No one wishes to believe that this is fortuitous or undeserved; all wish to think that it is the result of their own superior insight or intuition. As long as they are in, they have a strong pecuniary commitment to belief in the unique personal intelligence that tells them there will be yet more. Accordingly, possession must be associated with some special genius. Speculation buys up, in a very practical way, the intelligence of those involved. Only after the speculative collapse does the truth emerge. What was thought to be unusual acuity turns out to be only a fortuitous and unfortunate association with the assets.\n\n\n - John Kenneth Galbraith, A Brief History of Financial Euphoria","news_type":1},"isVote":1,"tweetType":1,"viewCount":252,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":322226757,"gmtCreate":1615811975979,"gmtModify":1704786871213,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"Fubo ftw","listText":"Fubo ftw","text":"Fubo ftw","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/322226757","repostId":"1186863196","repostType":4,"repost":{"id":"1186863196","kind":"news","weMediaInfo":{"introduction":"Providing stock market headlines, business news, financials and earnings ","home_visible":1,"media_name":"Tiger Newspress","id":"1079075236","head_image":"https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba"},"pubTimestamp":1615811277,"share":"https://ttm.financial/m/news/1186863196?lang=&edition=fundamental","pubTime":"2021-03-15 20:27","market":"us","language":"en","title":"Toplines Before US Market Open on Monday","url":"https://stock-news.laohu8.com/highlight/detail?id=1186863196","media":"Tiger Newspress","summary":" U.S. futures and European stocks climbed, with investors focused on the strength of the global economic recovery and progress in delivering vaccines.Investors remain preoccupied with rising long-term borrowing costs and their implications for reflation trades and the rotation in the stock market from growth to value shares. The benchmark Treasury yield hovered around 1.62% on Monday.At 8:10 a.m. ET, Nasdaq 100 e-minis were up 8.25points, or 0.06%, S&P 500 e-minis were rose 3.75 points, or 0.10%","content":"<p>(March 15) U.S. futures and European stocks climbed, with investors&nbsp;focused on the strength of the global economic recovery and progress in&nbsp;delivering vaccines.</p><p>Investors remain preoccupied with rising long-term borrowing costs&nbsp;and their implications for reflation trades and the rotation in the stock&nbsp;market from growth to value shares. The benchmark Treasury yield hovered around&nbsp;1.62% on Monday.</p><p>At 8:10 a.m. ET, Nasdaq 100 e-minis were up 8.25points, or 0.06%,&nbsp;S&amp;P 500 e-minis were rose 3.75 points, or 0.10%, and Dow e-minis were up 96&nbsp;points, or 0.29%.</p><p><img src=\"https://static.tigerbbs.com/9e96bc779b77a5cd6e89a82e995f0855\" tg-width=\"1242\" tg-height=\"492\" referrerpolicy=\"no-referrer\"></p><p>*Source FromTiger&nbsp;Trade, EST 08:10</p><p>Markets are preoccupied with rising long-term borrowing costs and&nbsp;their implications for reflation trades and the rotation in the stock market&nbsp;from growth to value shares. The Federal Reserve decision later in the week is&nbsp;one of a slew due from central banks globally.</p><p><b>U.S. Market Last Week</b></p><p>Stocks rose last week with the Dow Jones Industrial Average rising&nbsp;4% and the S&amp;P 500 gaining 2.6%. The S&amp;P 500 and the Dow both closed at&nbsp;record highs Friday.</p><p>The Nasdaq Composite advanced 3% last week, despite a sell-off on&nbsp;Friday spurred by rising interest rates. The jump in bond yields has challenged&nbsp;growth stocks in recent weeks and sent investors into cyclical pockets of the&nbsp;market. The Nasdaq is up less than 1% this month, while the Dow and S&amp;P are&nbsp;up 6% and 3.5%, respectively.</p><p><img src=\"https://static.tigerbbs.com/48ee123fcc12c4606a850f78d8da1460\" tg-width=\"1242\" tg-height=\"583\" referrerpolicy=\"no-referrer\"></p><p>The U.S. 10-year Treasury hit its highest level in more than a year&nbsp;on Friday. The benchmark Treasury note reached 1.642%, its highest level since&nbsp;February 2020.</p><p><b>Stocks making the biggest moves in</b><b>&nbsp;the</b>&nbsp;<b>premarket&nbsp;trading</b></p><p>1) XPeng (XPEV) – XPeng got a&nbsp;$76.8 million investment from the provincial government in Guangdong, where the&nbsp;Chinese electric vehicle maker is based and has two manufacturing plants. XPeng&nbsp;added 4.2% in premarket action.</p><p>2) AMC Entertainment (AMC) – AMC will begin reopening movie theaters&nbsp;in Los Angeles, starting with two locations today. It plans to open the&nbsp;remaining 23 theaters in Los Angeles on Friday, and hopes to have all 56&nbsp;California locations open by then depending on local approvals. AMC jumped 8.7%&nbsp;in premarket trade.</p><p>3) NXP Semiconductors (NXPI), Penn National Gaming (PENN), Generac&nbsp;(GNRC), Caesars Entertainment (CZR) – The stocks will join the S&amp;P 500 as&nbsp;part of the index’s quarterly rebalancing. NXP jumped 8.1% in premarket&nbsp;trading, with Penn up 5.8%, Generac gaining 3.6% and Caesars climbing 4.8%.</p><p>4) Carnival (CCL) – Carnival CEO Arnold Donald told the Financial&nbsp;Times he sees at least two more tough years for the cruise industry. Donald&nbsp;said the cruise line operator’s full fleet might be sailing by the end of the&nbsp;year but that it will take at least until 2023 for revenue to return to&nbsp;pre-Covid levels. Carnival rose 1.2% in the premarket.</p><p>5) Ford Motor (F) – Ford will recall 2.9 million vehicles to check&nbsp;for potentially faulty driver-side Takata airbags. The National Highway Traffic&nbsp;Safety Administration had called on Ford to do so in January, and the automaker&nbsp;plans to begin notifying owners on April 1.</p><p>6) Gilead Sciences (GILD), Merck (MRK) – The drugmakers will study a&nbsp;combination of their experimental drugs to treat HIV. Gilead and Merck will&nbsp;look at the effectiveness of the drug cocktail even when taken only every few&nbsp;months.</p><p>7) Eli Lilly (LLY) – Eli Lilly said its experimental treatment for&nbsp;Alzheimer’s modestly slowed decline in patients over an 18-month period in a&nbsp;mid-stage study. Lilly has already begun a second study of the treatment. Lilly&nbsp;fell 5.3% in the premarket.</p><p>8) Lordstown Motors (RIDE) – Lordstown said it will issue a “full&nbsp;and thorough” statement in the coming days that the electric truck maker said&nbsp;would refute a critical report by short-seller Hindenburg Research. Lordstown&nbsp;has said the report contains “half-truths and lies.” Its shares rose 5.9% in&nbsp;premarket trading.</p><p>9) GenMark Diagnostics (GNMK) – GenMark will be bought by Swiss&nbsp;drugmaker Roche for $1.8 billion in cash, or $24.05 per share. Shares of the&nbsp;U.S.-based molecular diagnostic test maker had closed at $18.50 per share on&nbsp;Friday. GenMark surged 29.2% in premarket action.</p><p>10) Shaw Communications (SJR) – The Canadian communications company&nbsp;agreed to be bought by rival Rogers Communications for C$26B including debt&nbsp;($20.9B in US Dollars). Shaw’s U.S. shares surged 53% in the premarket.</p><p>11) Dollar General (DG) – The discount retailer was upgraded to&nbsp;“overweight” from “neutral” at Atlantic Equities, which cited valuation as well&nbsp;as a positive impact from stimulus check spending and continued market share&nbsp;gain.</p><p>12) AstraZeneca (AZN) – Ireland became the latest country to suspend&nbsp;the use of AstraZeneca’s Covid-19 vaccine, following reports out of Norway&nbsp;regarding blood clots in some patients. Officials said they took the action&nbsp;“out of an abundance of caution,” although AstraZeneca said its review of more&nbsp;than 17 million people showed no increased risk of blood clots.</p><p>13) United Airlines (UAL), American Airlines (AAL), Delta Air Lines&nbsp;(DAL), Southwest Airlines (LUV) – Airline stocks are gaining ground after the&nbsp;Transportation Safety Administration said airport screening levels are now at&nbsp;one-year highs. Separately, Southwest said passenger demand is continuing to&nbsp;improve this month. United was up 3% in the premarket, American gained 4.3%,&nbsp;Delta rose 2% and Southwest edged up 1.3%.</p><p>14) DraftKings (DKNG) – The sports betting company announced a&nbsp;proposed offering of $1 billion in convertible notes due in 2028. DraftKings&nbsp;fell 3.5% in premarket trade.</p><p>15) AstraZeneca Plc said that a review of safety data of more than&nbsp;17 million people vaccinated with its COVID-19 vaccine in the European Union&nbsp;and the United Kingdom showed no evidence of an increased risk of blood clots.</p><p>16) United States Steel Corporation issued profit forecast for the&nbsp;first quarter. The company said it expects Q1 adjusted earnings of $0.61 per&nbsp;share, versus analysts’ estimates of $0.73 per share.</p><p>17) Roche Holding AG said it has entered into a definitive agreement&nbsp;to acquire GenMark Diagnostics (NASDAQ:GNMK) for $24.05 per share in cash, or&nbsp;about $1.8 billion, on a fully diluted basis.</p><p><b>Economic calendar:</b></p><p><b>Monday:</b> Empire Manufacturing, March(14.5 expected, 12.1 in February); Total Net TIC Flows, January (-$0.6 billion&nbsp;in December); Net Long-Term TIC Flows, January ($121.0 billion in December)</p><p><b>Tuesday:</b>&nbsp;Import price index,&nbsp;month-over-month, February (1.0% expected, 1.4% in January); Import price index&nbsp;excluding petroleum, February (0.4% expected, 0.9% in January); Import price&nbsp;index year-over-year, February (2.6% expected, 0.9% in January); Export price&nbsp;index, month-over-month, February (0.9% expected, 2.5% in January); Export&nbsp;price index, year-over-year, February (2.3% in January); Retail sales advance&nbsp;month-over-month, February (-0.7% expected, 5.3% in January); Retail sales&nbsp;excluding autos and gas, month-over-month, February (-1.3% expected, 6.1% in&nbsp;January); Retail sales control group, February (-1.1% expected, 6.0% in&nbsp;January); Industrial production month-over-month, February (0.4% expected, 0.9%&nbsp;in January); Capacity utilization, February (75.6% in February, 75.6% in&nbsp;January); Manufacturing production, February (0.2% expected, 1.0% in January);&nbsp;Business inventories, January (0.3% expected, 0.6% in December); NAHB Housing&nbsp;Market index, March (84 expected, 84 in February)</p><p><b>Wednesday:</b>&nbsp;MBA Mortgage Applications,&nbsp;week ended March 12 (-1.3% during prior week); Building permits,&nbsp;month-over-month, February (-7.2% expected, 10.4% in January); Housing starts,&nbsp;February (-1.0% expected, -6.0% in January); FOMC Rate Decision</p><p><b>Thursday:</b>&nbsp;Initial jobless claims, week&nbsp;ended March 13 (703,000 expected, 712,000 during prior week); Continuing&nbsp;claims, week ended March 6 (4.144 million during prior week); Philadelphia Fed&nbsp;Business Outlook Index, March (24.0 expected, 23.1 in February); Leading Index,&nbsp;February (0.3% expected, 0.5% in January)</p><p><b>Friday:</b>&nbsp;N/A</p><p><b>Earnings calendar:</b></p><p><b>Monday:</b>&nbsp;N/A</p><p><b>Tuesday:</b>&nbsp;Coupa Software (COUP),&nbsp;CrowdStrike (CRWD), Lennar (LEN) after market close</p><p><b>Wednesday:</b> Green Thumb Industries&nbsp;(GTII.CN) after market close</p><p><b>Thursday:</b> Dollar General (DG) before&nbsp;market open; Nike (NKE), FedEx (FDX), Hims &amp; Hers Health (HIMS) after market&nbsp;close</p><p><b>Friday:</b>&nbsp;N/A</p><p><b>These are some key events this week:</b></p><p>Fed Chair Jerome Powell will likely reaffirm his no-tightening&nbsp;policy stance at the Fed policy meeting Wednesday.Bank of England rate decision&nbsp;Thursday. BOE is expected to leave monetary policy unchanged.Bank of Japan&nbsp;monetary policy decision and Governor Haruhiko Kuroda briefing Friday.</p><p><b>These are the main moves in markets:</b></p><p><b>Currencies</b></p><p>The Bloomberg Dollar Spot Index increased 0.1%.The euro sank 0.2% to&nbsp;$1.1929.The British pound was little changed at $1.392.The onshore yuan&nbsp;strengthened 0.1% to 6.504 per dollar.The Japanese yen weakened 0.1% to 109.13&nbsp;per dollar.</p><p><b>Bonds</b></p><p>The yield on 10-year Treasuries increased one basis point to&nbsp;1.63%.The yield on two-year Treasuries gained one basis point to&nbsp;0.16%.Germany’s 10-year yield was unchanged at -0.31%.Britain’s 10-year yield&nbsp;jumped two basis points to 0.839%.Japan’s 10-year yield fell one basis point to&nbsp;0.111%.</p><p><b>Commodities</b></p><p>West Texas Intermediate crude declined 0.2% to $65.50 a barrel.Brent&nbsp;crude decreased 0.1% to $69.12 a barrel.Gold strengthened 0.1% to $1,729.67 an&nbsp;ounce.</p><p>Elsewhere, oil climbed and Bitcoin slid below $60,000 after a&nbsp;weekend rally to a record. On the virus front, the U.S. is reporting fewer&nbsp;infections but countries from India to Italy are seeing a resurgence.</p>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Toplines Before US Market Open on Monday</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nToplines Before US Market Open on Monday\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1079075236\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/8274c5b9d4c2852bfb1c4d6ce16c68ba);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">Tiger Newspress </p>\n<p class=\"h-time\">2021-03-15 20:27</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<p>(March 15) U.S. futures and European stocks climbed, with investors&nbsp;focused on the strength of the global economic recovery and progress in&nbsp;delivering vaccines.</p><p>Investors remain preoccupied with rising long-term borrowing costs&nbsp;and their implications for reflation trades and the rotation in the stock&nbsp;market from growth to value shares. The benchmark Treasury yield hovered around&nbsp;1.62% on Monday.</p><p>At 8:10 a.m. ET, Nasdaq 100 e-minis were up 8.25points, or 0.06%,&nbsp;S&amp;P 500 e-minis were rose 3.75 points, or 0.10%, and Dow e-minis were up 96&nbsp;points, or 0.29%.</p><p><img src=\"https://static.tigerbbs.com/9e96bc779b77a5cd6e89a82e995f0855\" tg-width=\"1242\" tg-height=\"492\" referrerpolicy=\"no-referrer\"></p><p>*Source FromTiger&nbsp;Trade, EST 08:10</p><p>Markets are preoccupied with rising long-term borrowing costs and&nbsp;their implications for reflation trades and the rotation in the stock market&nbsp;from growth to value shares. The Federal Reserve decision later in the week is&nbsp;one of a slew due from central banks globally.</p><p><b>U.S. Market Last Week</b></p><p>Stocks rose last week with the Dow Jones Industrial Average rising&nbsp;4% and the S&amp;P 500 gaining 2.6%. The S&amp;P 500 and the Dow both closed at&nbsp;record highs Friday.</p><p>The Nasdaq Composite advanced 3% last week, despite a sell-off on&nbsp;Friday spurred by rising interest rates. The jump in bond yields has challenged&nbsp;growth stocks in recent weeks and sent investors into cyclical pockets of the&nbsp;market. The Nasdaq is up less than 1% this month, while the Dow and S&amp;P are&nbsp;up 6% and 3.5%, respectively.</p><p><img src=\"https://static.tigerbbs.com/48ee123fcc12c4606a850f78d8da1460\" tg-width=\"1242\" tg-height=\"583\" referrerpolicy=\"no-referrer\"></p><p>The U.S. 10-year Treasury hit its highest level in more than a year&nbsp;on Friday. The benchmark Treasury note reached 1.642%, its highest level since&nbsp;February 2020.</p><p><b>Stocks making the biggest moves in</b><b>&nbsp;the</b>&nbsp;<b>premarket&nbsp;trading</b></p><p>1) XPeng (XPEV) – XPeng got a&nbsp;$76.8 million investment from the provincial government in Guangdong, where the&nbsp;Chinese electric vehicle maker is based and has two manufacturing plants. XPeng&nbsp;added 4.2% in premarket action.</p><p>2) AMC Entertainment (AMC) – AMC will begin reopening movie theaters&nbsp;in Los Angeles, starting with two locations today. It plans to open the&nbsp;remaining 23 theaters in Los Angeles on Friday, and hopes to have all 56&nbsp;California locations open by then depending on local approvals. AMC jumped 8.7%&nbsp;in premarket trade.</p><p>3) NXP Semiconductors (NXPI), Penn National Gaming (PENN), Generac&nbsp;(GNRC), Caesars Entertainment (CZR) – The stocks will join the S&amp;P 500 as&nbsp;part of the index’s quarterly rebalancing. NXP jumped 8.1% in premarket&nbsp;trading, with Penn up 5.8%, Generac gaining 3.6% and Caesars climbing 4.8%.</p><p>4) Carnival (CCL) – Carnival CEO Arnold Donald told the Financial&nbsp;Times he sees at least two more tough years for the cruise industry. Donald&nbsp;said the cruise line operator’s full fleet might be sailing by the end of the&nbsp;year but that it will take at least until 2023 for revenue to return to&nbsp;pre-Covid levels. Carnival rose 1.2% in the premarket.</p><p>5) Ford Motor (F) – Ford will recall 2.9 million vehicles to check&nbsp;for potentially faulty driver-side Takata airbags. The National Highway Traffic&nbsp;Safety Administration had called on Ford to do so in January, and the automaker&nbsp;plans to begin notifying owners on April 1.</p><p>6) Gilead Sciences (GILD), Merck (MRK) – The drugmakers will study a&nbsp;combination of their experimental drugs to treat HIV. Gilead and Merck will&nbsp;look at the effectiveness of the drug cocktail even when taken only every few&nbsp;months.</p><p>7) Eli Lilly (LLY) – Eli Lilly said its experimental treatment for&nbsp;Alzheimer’s modestly slowed decline in patients over an 18-month period in a&nbsp;mid-stage study. Lilly has already begun a second study of the treatment. Lilly&nbsp;fell 5.3% in the premarket.</p><p>8) Lordstown Motors (RIDE) – Lordstown said it will issue a “full&nbsp;and thorough” statement in the coming days that the electric truck maker said&nbsp;would refute a critical report by short-seller Hindenburg Research. Lordstown&nbsp;has said the report contains “half-truths and lies.” Its shares rose 5.9% in&nbsp;premarket trading.</p><p>9) GenMark Diagnostics (GNMK) – GenMark will be bought by Swiss&nbsp;drugmaker Roche for $1.8 billion in cash, or $24.05 per share. Shares of the&nbsp;U.S.-based molecular diagnostic test maker had closed at $18.50 per share on&nbsp;Friday. GenMark surged 29.2% in premarket action.</p><p>10) Shaw Communications (SJR) – The Canadian communications company&nbsp;agreed to be bought by rival Rogers Communications for C$26B including debt&nbsp;($20.9B in US Dollars). Shaw’s U.S. shares surged 53% in the premarket.</p><p>11) Dollar General (DG) – The discount retailer was upgraded to&nbsp;“overweight” from “neutral” at Atlantic Equities, which cited valuation as well&nbsp;as a positive impact from stimulus check spending and continued market share&nbsp;gain.</p><p>12) AstraZeneca (AZN) – Ireland became the latest country to suspend&nbsp;the use of AstraZeneca’s Covid-19 vaccine, following reports out of Norway&nbsp;regarding blood clots in some patients. Officials said they took the action&nbsp;“out of an abundance of caution,” although AstraZeneca said its review of more&nbsp;than 17 million people showed no increased risk of blood clots.</p><p>13) United Airlines (UAL), American Airlines (AAL), Delta Air Lines&nbsp;(DAL), Southwest Airlines (LUV) – Airline stocks are gaining ground after the&nbsp;Transportation Safety Administration said airport screening levels are now at&nbsp;one-year highs. Separately, Southwest said passenger demand is continuing to&nbsp;improve this month. United was up 3% in the premarket, American gained 4.3%,&nbsp;Delta rose 2% and Southwest edged up 1.3%.</p><p>14) DraftKings (DKNG) – The sports betting company announced a&nbsp;proposed offering of $1 billion in convertible notes due in 2028. DraftKings&nbsp;fell 3.5% in premarket trade.</p><p>15) AstraZeneca Plc said that a review of safety data of more than&nbsp;17 million people vaccinated with its COVID-19 vaccine in the European Union&nbsp;and the United Kingdom showed no evidence of an increased risk of blood clots.</p><p>16) United States Steel Corporation issued profit forecast for the&nbsp;first quarter. The company said it expects Q1 adjusted earnings of $0.61 per&nbsp;share, versus analysts’ estimates of $0.73 per share.</p><p>17) Roche Holding AG said it has entered into a definitive agreement&nbsp;to acquire GenMark Diagnostics (NASDAQ:GNMK) for $24.05 per share in cash, or&nbsp;about $1.8 billion, on a fully diluted basis.</p><p><b>Economic calendar:</b></p><p><b>Monday:</b> Empire Manufacturing, March(14.5 expected, 12.1 in February); Total Net TIC Flows, January (-$0.6 billion&nbsp;in December); Net Long-Term TIC Flows, January ($121.0 billion in December)</p><p><b>Tuesday:</b>&nbsp;Import price index,&nbsp;month-over-month, February (1.0% expected, 1.4% in January); Import price index&nbsp;excluding petroleum, February (0.4% expected, 0.9% in January); Import price&nbsp;index year-over-year, February (2.6% expected, 0.9% in January); Export price&nbsp;index, month-over-month, February (0.9% expected, 2.5% in January); Export&nbsp;price index, year-over-year, February (2.3% in January); Retail sales advance&nbsp;month-over-month, February (-0.7% expected, 5.3% in January); Retail sales&nbsp;excluding autos and gas, month-over-month, February (-1.3% expected, 6.1% in&nbsp;January); Retail sales control group, February (-1.1% expected, 6.0% in&nbsp;January); Industrial production month-over-month, February (0.4% expected, 0.9%&nbsp;in January); Capacity utilization, February (75.6% in February, 75.6% in&nbsp;January); Manufacturing production, February (0.2% expected, 1.0% in January);&nbsp;Business inventories, January (0.3% expected, 0.6% in December); NAHB Housing&nbsp;Market index, March (84 expected, 84 in February)</p><p><b>Wednesday:</b>&nbsp;MBA Mortgage Applications,&nbsp;week ended March 12 (-1.3% during prior week); Building permits,&nbsp;month-over-month, February (-7.2% expected, 10.4% in January); Housing starts,&nbsp;February (-1.0% expected, -6.0% in January); FOMC Rate Decision</p><p><b>Thursday:</b>&nbsp;Initial jobless claims, week&nbsp;ended March 13 (703,000 expected, 712,000 during prior week); Continuing&nbsp;claims, week ended March 6 (4.144 million during prior week); Philadelphia Fed&nbsp;Business Outlook Index, March (24.0 expected, 23.1 in February); Leading Index,&nbsp;February (0.3% expected, 0.5% in January)</p><p><b>Friday:</b>&nbsp;N/A</p><p><b>Earnings calendar:</b></p><p><b>Monday:</b>&nbsp;N/A</p><p><b>Tuesday:</b>&nbsp;Coupa Software (COUP),&nbsp;CrowdStrike (CRWD), Lennar (LEN) after market close</p><p><b>Wednesday:</b> Green Thumb Industries&nbsp;(GTII.CN) after market close</p><p><b>Thursday:</b> Dollar General (DG) before&nbsp;market open; Nike (NKE), FedEx (FDX), Hims &amp; Hers Health (HIMS) after market&nbsp;close</p><p><b>Friday:</b>&nbsp;N/A</p><p><b>These are some key events this week:</b></p><p>Fed Chair Jerome Powell will likely reaffirm his no-tightening&nbsp;policy stance at the Fed policy meeting Wednesday.Bank of England rate decision&nbsp;Thursday. BOE is expected to leave monetary policy unchanged.Bank of Japan&nbsp;monetary policy decision and Governor Haruhiko Kuroda briefing Friday.</p><p><b>These are the main moves in markets:</b></p><p><b>Currencies</b></p><p>The Bloomberg Dollar Spot Index increased 0.1%.The euro sank 0.2% to&nbsp;$1.1929.The British pound was little changed at $1.392.The onshore yuan&nbsp;strengthened 0.1% to 6.504 per dollar.The Japanese yen weakened 0.1% to 109.13&nbsp;per dollar.</p><p><b>Bonds</b></p><p>The yield on 10-year Treasuries increased one basis point to&nbsp;1.63%.The yield on two-year Treasuries gained one basis point to&nbsp;0.16%.Germany’s 10-year yield was unchanged at -0.31%.Britain’s 10-year yield&nbsp;jumped two basis points to 0.839%.Japan’s 10-year yield fell one basis point to&nbsp;0.111%.</p><p><b>Commodities</b></p><p>West Texas Intermediate crude declined 0.2% to $65.50 a barrel.Brent&nbsp;crude decreased 0.1% to $69.12 a barrel.Gold strengthened 0.1% to $1,729.67 an&nbsp;ounce.</p><p>Elsewhere, oil climbed and Bitcoin slid below $60,000 after a&nbsp;weekend rally to a record. On the virus front, the U.S. is reporting fewer&nbsp;infections but countries from India to Italy are seeing a resurgence.</p>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1186863196","content_text":"(March 15) U.S. futures and European stocks climbed, with investors focused on the strength of the global economic recovery and progress in delivering vaccines.Investors remain preoccupied with rising long-term borrowing costs and their implications for reflation trades and the rotation in the stock market from growth to value shares. The benchmark Treasury yield hovered around 1.62% on Monday.At 8:10 a.m. ET, Nasdaq 100 e-minis were up 8.25points, or 0.06%, S&P 500 e-minis were rose 3.75 points, or 0.10%, and Dow e-minis were up 96 points, or 0.29%.*Source FromTiger Trade, EST 08:10Markets are preoccupied with rising long-term borrowing costs and their implications for reflation trades and the rotation in the stock market from growth to value shares. The Federal Reserve decision later in the week is one of a slew due from central banks globally.U.S. Market Last WeekStocks rose last week with the Dow Jones Industrial Average rising 4% and the S&P 500 gaining 2.6%. The S&P 500 and the Dow both closed at record highs Friday.The Nasdaq Composite advanced 3% last week, despite a sell-off on Friday spurred by rising interest rates. The jump in bond yields has challenged growth stocks in recent weeks and sent investors into cyclical pockets of the market. The Nasdaq is up less than 1% this month, while the Dow and S&P are up 6% and 3.5%, respectively.The U.S. 10-year Treasury hit its highest level in more than a year on Friday. The benchmark Treasury note reached 1.642%, its highest level since February 2020.Stocks making the biggest moves in the premarket trading1) XPeng (XPEV) – XPeng got a $76.8 million investment from the provincial government in Guangdong, where the Chinese electric vehicle maker is based and has two manufacturing plants. XPeng added 4.2% in premarket action.2) AMC Entertainment (AMC) – AMC will begin reopening movie theaters in Los Angeles, starting with two locations today. It plans to open the remaining 23 theaters in Los Angeles on Friday, and hopes to have all 56 California locations open by then depending on local approvals. AMC jumped 8.7% in premarket trade.3) NXP Semiconductors (NXPI), Penn National Gaming (PENN), Generac (GNRC), Caesars Entertainment (CZR) – The stocks will join the S&P 500 as part of the index’s quarterly rebalancing. NXP jumped 8.1% in premarket trading, with Penn up 5.8%, Generac gaining 3.6% and Caesars climbing 4.8%.4) Carnival (CCL) – Carnival CEO Arnold Donald told the Financial Times he sees at least two more tough years for the cruise industry. Donald said the cruise line operator’s full fleet might be sailing by the end of the year but that it will take at least until 2023 for revenue to return to pre-Covid levels. Carnival rose 1.2% in the premarket.5) Ford Motor (F) – Ford will recall 2.9 million vehicles to check for potentially faulty driver-side Takata airbags. The National Highway Traffic Safety Administration had called on Ford to do so in January, and the automaker plans to begin notifying owners on April 1.6) Gilead Sciences (GILD), Merck (MRK) – The drugmakers will study a combination of their experimental drugs to treat HIV. Gilead and Merck will look at the effectiveness of the drug cocktail even when taken only every few months.7) Eli Lilly (LLY) – Eli Lilly said its experimental treatment for Alzheimer’s modestly slowed decline in patients over an 18-month period in a mid-stage study. Lilly has already begun a second study of the treatment. Lilly fell 5.3% in the premarket.8) Lordstown Motors (RIDE) – Lordstown said it will issue a “full and thorough” statement in the coming days that the electric truck maker said would refute a critical report by short-seller Hindenburg Research. Lordstown has said the report contains “half-truths and lies.” Its shares rose 5.9% in premarket trading.9) GenMark Diagnostics (GNMK) – GenMark will be bought by Swiss drugmaker Roche for $1.8 billion in cash, or $24.05 per share. Shares of the U.S.-based molecular diagnostic test maker had closed at $18.50 per share on Friday. GenMark surged 29.2% in premarket action.10) Shaw Communications (SJR) – The Canadian communications company agreed to be bought by rival Rogers Communications for C$26B including debt ($20.9B in US Dollars). Shaw’s U.S. shares surged 53% in the premarket.11) Dollar General (DG) – The discount retailer was upgraded to “overweight” from “neutral” at Atlantic Equities, which cited valuation as well as a positive impact from stimulus check spending and continued market share gain.12) AstraZeneca (AZN) – Ireland became the latest country to suspend the use of AstraZeneca’s Covid-19 vaccine, following reports out of Norway regarding blood clots in some patients. Officials said they took the action “out of an abundance of caution,” although AstraZeneca said its review of more than 17 million people showed no increased risk of blood clots.13) United Airlines (UAL), American Airlines (AAL), Delta Air Lines (DAL), Southwest Airlines (LUV) – Airline stocks are gaining ground after the Transportation Safety Administration said airport screening levels are now at one-year highs. Separately, Southwest said passenger demand is continuing to improve this month. United was up 3% in the premarket, American gained 4.3%, Delta rose 2% and Southwest edged up 1.3%.14) DraftKings (DKNG) – The sports betting company announced a proposed offering of $1 billion in convertible notes due in 2028. DraftKings fell 3.5% in premarket trade.15) AstraZeneca Plc said that a review of safety data of more than 17 million people vaccinated with its COVID-19 vaccine in the European Union and the United Kingdom showed no evidence of an increased risk of blood clots.16) United States Steel Corporation issued profit forecast for the first quarter. The company said it expects Q1 adjusted earnings of $0.61 per share, versus analysts’ estimates of $0.73 per share.17) Roche Holding AG said it has entered into a definitive agreement to acquire GenMark Diagnostics (NASDAQ:GNMK) for $24.05 per share in cash, or about $1.8 billion, on a fully diluted basis.Economic calendar:Monday: Empire Manufacturing, March(14.5 expected, 12.1 in February); Total Net TIC Flows, January (-$0.6 billion in December); Net Long-Term TIC Flows, January ($121.0 billion in December)Tuesday: Import price index, month-over-month, February (1.0% expected, 1.4% in January); Import price index excluding petroleum, February (0.4% expected, 0.9% in January); Import price index year-over-year, February (2.6% expected, 0.9% in January); Export price index, month-over-month, February (0.9% expected, 2.5% in January); Export price index, year-over-year, February (2.3% in January); Retail sales advance month-over-month, February (-0.7% expected, 5.3% in January); Retail sales excluding autos and gas, month-over-month, February (-1.3% expected, 6.1% in January); Retail sales control group, February (-1.1% expected, 6.0% in January); Industrial production month-over-month, February (0.4% expected, 0.9% in January); Capacity utilization, February (75.6% in February, 75.6% in January); Manufacturing production, February (0.2% expected, 1.0% in January); Business inventories, January (0.3% expected, 0.6% in December); NAHB Housing Market index, March (84 expected, 84 in February)Wednesday: MBA Mortgage Applications, week ended March 12 (-1.3% during prior week); Building permits, month-over-month, February (-7.2% expected, 10.4% in January); Housing starts, February (-1.0% expected, -6.0% in January); FOMC Rate DecisionThursday: Initial jobless claims, week ended March 13 (703,000 expected, 712,000 during prior week); Continuing claims, week ended March 6 (4.144 million during prior week); Philadelphia Fed Business Outlook Index, March (24.0 expected, 23.1 in February); Leading Index, February (0.3% expected, 0.5% in January)Friday: N/AEarnings calendar:Monday: N/ATuesday: Coupa Software (COUP), CrowdStrike (CRWD), Lennar (LEN) after market closeWednesday: Green Thumb Industries (GTII.CN) after market closeThursday: Dollar General (DG) before market open; Nike (NKE), FedEx (FDX), Hims & Hers Health (HIMS) after market closeFriday: N/AThese are some key events this week:Fed Chair Jerome Powell will likely reaffirm his no-tightening policy stance at the Fed policy meeting Wednesday.Bank of England rate decision Thursday. BOE is expected to leave monetary policy unchanged.Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing Friday.These are the main moves in markets:CurrenciesThe Bloomberg Dollar Spot Index increased 0.1%.The euro sank 0.2% to $1.1929.The British pound was little changed at $1.392.The onshore yuan strengthened 0.1% to 6.504 per dollar.The Japanese yen weakened 0.1% to 109.13 per dollar.BondsThe yield on 10-year Treasuries increased one basis point to 1.63%.The yield on two-year Treasuries gained one basis point to 0.16%.Germany’s 10-year yield was unchanged at -0.31%.Britain’s 10-year yield jumped two basis points to 0.839%.Japan’s 10-year yield fell one basis point to 0.111%.CommoditiesWest Texas Intermediate crude declined 0.2% to $65.50 a barrel.Brent crude decreased 0.1% to $69.12 a barrel.Gold strengthened 0.1% to $1,729.67 an ounce.Elsewhere, oil climbed and Bitcoin slid below $60,000 after a weekend rally to a record. On the virus front, the U.S. is reporting fewer infections but countries from India to Italy are seeing a resurgence.","news_type":1},"isVote":1,"tweetType":1,"viewCount":280,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":328507268,"gmtCreate":1615537445254,"gmtModify":1704784245276,"author":{"id":"3577588192452574","authorId":"3577588192452574","name":"RyanKei212","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3577588192452574","authorIdStr":"3577588192452574"},"themes":[],"htmlText":"Nice","listText":"Nice","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/328507268","repostId":"2118953819","repostType":4,"repost":{"id":"2118953819","kind":"news","pubTimestamp":1615531690,"share":"https://ttm.financial/m/news/2118953819?lang=&edition=fundamental","pubTime":"2021-03-12 14:48","market":"sg","language":"en","title":"Tencent and Baidu Fined by Antitrust Regulator For Previous Deals","url":"https://stock-news.laohu8.com/highlight/detail?id=2118953819","media":"Bloomberg","summary":"Regulator handed out penalties in review of 10 previous deals\nDidi, ByteDance units also censured fo","content":"<ul>\n <li>Regulator handed out penalties in review of 10 previous deals</li>\n <li>Didi, ByteDance units also censured for earlier joint ventures</li>\n</ul>\n<p>China’s antitrust regulator issued fines against some of its largest tech giants including Tencent Holdings Ltd., Baidu Inc. and Didi Chuxing for past acquisitions and investments as it stepped up its crackdown on the sector.</p>\n<p>Pony Ma’s Tencent is being fined for 500,000 yuan ($77,000) for its 2018 investment in online education app Yuanfudao, according to a statement by the State Administration for Market Regulation on Friday. Baidu was fined the same amount for its 2014 takeover of Ainemo Inc., a maker of consumer electronics including voice-controlled speakers. The firms are being censured for not seeking prior approvals for the deals -- a violation of country’s anti-monopoly laws -- though the regulator had determined the deals themselves aren’t anti-competitive.</p>\n<p>Tencent and Baidu join fellow behemoth Alibaba Group Holding Ltd. in coming under fire from the country’s powerful antitrust regulator, as Beijing steps up efforts to rein in its once free-wheeling technology industry. The regulator had last year issued fines against Alibaba as well as Tencent unit China Literature Ltd. for similar violations.</p>\n<p>“The message is clear that seeking government approvals in deals like these are a must.” said Ye Han, a partner at Beijing-based law firm Merits &amp; Tree, who specializes in antitrust and M&amp;A. “While we haven’t seen cases where companies got broke up or mergers got unwinded, such evaluations are likely going on behind the scene.”</p>\n<p>Didi Mobility Pte, a unit of ridehailing giant Didi Chuxing, and Japan’s&nbsp;SoftBank Corp.&nbsp;were also issued fines of 500,000 yuan each -- the maximum penalty possible -- for setting up a joint venture without permission. A ByteDance unit and its partner Shanghai Dongfang Newspaper Co. were also penalized the same amounts for a 2019&nbsp;partnership&nbsp;that created a video-copyright venture. ByteDance said the joint venture has since been canceled.</p>\n<p>Technology companies like Tencent had previously carried out mega mergers and acquisitions through so-called Variable Interest Entity structures, which operate on shaky legal grounds. The new antitrust rules, accompanied by the fines handed down by the regulators, are a signal VIEs are now under their oversight.</p>\n<blockquote>\n What Bloomberg Intelligence SaysTencent’s ability to strengthen its domestic ecosystem through M&amp;A may be significantly weakened on rising anti-monopoly scrutiny, underlined by a 500,000 yuan fine by the State Administration for Market Regulation on March 12 for failing to seek approval for its investment in online education platform Yuanfudao in 2018. While the amount is immaterial to Tencent, retroactive application of new anti-competitive rules announced in November may be a stern warning to toe the line in future.\n</blockquote>\n<blockquote>\n -- Vey-Sern Ling and Tiffany Tam, analysts\n</blockquote>\n<p>Other companies that were penalized in the latest round include&nbsp;TAL Education Group&nbsp;and&nbsp;Intime Retail Group Co.</p>","source":"lsy1584095487587","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tencent and Baidu Fined by Antitrust Regulator For Previous Deals</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTencent and Baidu Fined by Antitrust Regulator For Previous Deals\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-12 14:48 GMT+8&nbsp;&nbsp;&nbsp;<a href=http://bloomberg.com/news/articles/2021-03-12/tencent-baidu-fined-by-antitrust-regulator-for-previous-deals?srnd=premium-asia><strong>Bloomberg</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Regulator handed out penalties in review of 10 previous deals\nDidi, ByteDance units also censured for earlier joint ventures\n\nChina’s antitrust regulator issued fines against some of its largest tech ...</p>\n\n<a href=\"http://bloomberg.com/news/articles/2021-03-12/tencent-baidu-fined-by-antitrust-regulator-for-previous-deals?srnd=premium-asia\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BABA":"阿里巴巴","BIDU":"百度","TAL":"好未来","K3SD.SI":"u BIDU ADR US$+","09888":"百度集团-SW","00700":"腾讯控股","SOBKY":"Softbank Corp.","QNETCN":"纳斯达克中美互联网老虎指数","PIAHY":"Ping An Healthcare & Technology Co Ltd.","PANHF":"Ping An Healthcare & Technology Co Ltd.","TCEHY":"腾讯控股ADR"},"source_url":"http://bloomberg.com/news/articles/2021-03-12/tencent-baidu-fined-by-antitrust-regulator-for-previous-deals?srnd=premium-asia","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2118953819","content_text":"Regulator handed out penalties in review of 10 previous deals\nDidi, ByteDance units also censured for earlier joint ventures\n\nChina’s antitrust regulator issued fines against some of its largest tech giants including Tencent Holdings Ltd., Baidu Inc. and Didi Chuxing for past acquisitions and investments as it stepped up its crackdown on the sector.\nPony Ma’s Tencent is being fined for 500,000 yuan ($77,000) for its 2018 investment in online education app Yuanfudao, according to a statement by the State Administration for Market Regulation on Friday. Baidu was fined the same amount for its 2014 takeover of Ainemo Inc., a maker of consumer electronics including voice-controlled speakers. The firms are being censured for not seeking prior approvals for the deals -- a violation of country’s anti-monopoly laws -- though the regulator had determined the deals themselves aren’t anti-competitive.\nTencent and Baidu join fellow behemoth Alibaba Group Holding Ltd. in coming under fire from the country’s powerful antitrust regulator, as Beijing steps up efforts to rein in its once free-wheeling technology industry. The regulator had last year issued fines against Alibaba as well as Tencent unit China Literature Ltd. for similar violations.\n“The message is clear that seeking government approvals in deals like these are a must.” said Ye Han, a partner at Beijing-based law firm Merits & Tree, who specializes in antitrust and M&A. “While we haven’t seen cases where companies got broke up or mergers got unwinded, such evaluations are likely going on behind the scene.”\nDidi Mobility Pte, a unit of ridehailing giant Didi Chuxing, and Japan’s SoftBank Corp. were also issued fines of 500,000 yuan each -- the maximum penalty possible -- for setting up a joint venture without permission. A ByteDance unit and its partner Shanghai Dongfang Newspaper Co. were also penalized the same amounts for a 2019 partnership that created a video-copyright venture. ByteDance said the joint venture has since been canceled.\nTechnology companies like Tencent had previously carried out mega mergers and acquisitions through so-called Variable Interest Entity structures, which operate on shaky legal grounds. The new antitrust rules, accompanied by the fines handed down by the regulators, are a signal VIEs are now under their oversight.\n\n What Bloomberg Intelligence SaysTencent’s ability to strengthen its domestic ecosystem through M&A may be significantly weakened on rising anti-monopoly scrutiny, underlined by a 500,000 yuan fine by the State Administration for Market Regulation on March 12 for failing to seek approval for its investment in online education platform Yuanfudao in 2018. While the amount is immaterial to Tencent, retroactive application of new anti-competitive rules announced in November may be a stern warning to toe the line in future.\n\n\n -- Vey-Sern Ling and Tiffany Tam, analysts\n\nOther companies that were penalized in the latest round include TAL Education Group and Intime Retail Group Co.","news_type":1},"isVote":1,"tweetType":1,"viewCount":327,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}