• PortfolioHub·09-23 15:44PortfolioHub

      Why Dollar Cost Averaging Is The Best Investment Strategy

      Many people don’t know what dollar cost averaging is, how it works or why they might want to do it. In this article we’ll discuss the basics of dollar cost averaging and explain how it helps investors avoid big losses during market downturns as well as providing stable returns long term.Photo byLive RicheronUnsplashTime In The Market Beats. Timing the marketMarket timing is a strategy where investors attempt to predict future stock prices. This is done by looking at historical data and trying to determine what the next trend might be. If you think the economy is about to turn around, for example, you could buy stocks that are expected to do well once the economy picks up steam. On the flip side, if you believe the economy is headed south, you could sell off shares of companies whose sales are likely to decline.The problem with market timing is that it doesn’t always make sense. Markets don’t always behave predictably, and determining whether an asset is under valued or over priced is extremely difficult. As a result, you may decide to “wait for the dip” on an asset but instead the asset rises rapidly and you miss out on gains.Or on the other hand, you may sell a stock you think will go up in the long term because you think it may go down in the short term and you might be able to make a quick profit. Well that may happen. But the stock may also continue to run up and if you have to buy back in at higher prices, then you have just missed out on some more profit.The whole idea behind dollar cost averaging is that you don’t care about the price at the time you buy. You just consistently buy the same asset over a long period of time in regular intervals. Historically this has shown to be more consistent for investors then trying to trade on short term moves.How Does Dollar Cost Averaging Work?When it comes to investing, one of the most common ways people try to save money is dollar cost averaging. In fact, according to Investopedia, about half of investors use this method. But what exactly does dollar cost averaging mean? And how does it work?To understand how dollar cost averaging works, let’s start with an example. Imagine that you want to purchase 10 shares of company X. Instead of purchasing all of these shares in one go, you may instead decide to purchase 1 share each month for 10 months.Or (the way I do it), each month after getting my pay from my fulltime job. I add whatever money I have to invest that month into all of my favourite stocks. I don’t care about the share price that particular day because many of my stocks are long term plays. I don’t expect to sell for 10+ years, unless my conviction changes.Rewards of Dollar-Cost AveragingThe key to dollar-cost averaging is to stick with it long enough to see a difference. On a day-to-day basis anything can happen. The advantages and disadvantages below are in line with what to expect if you stick to this strategy long term.Advantages of dollar cost averagingThe concept behind dollar cost averaging is simple: you buy shares of a stock over time rather than paying full price for it all at once. This method helps to keep emotions out of the equation because there are no big decisions to make about whether or not to invest.This strategy allows people to purchase items over time without having a lot of money available. For example, let’s say you want to start investing in stocks. You can start with very little money, even £10 per month to get started.You can set up recurring payments through your bank account or credit card so that you never need to worry about running out of funds. Dollar cost averaging can become very automated so you don’t even need to think about it. Especially when picking something like an index fund with a diversified basket of stocks.Disadvantages of dollar cost averagingDollar cost averaging isn’t right for everyone. If you’re looking to make a large investment, you’ll probably want to consider buying everything at once. Also, if you’re new to investing, you should wait until you’ve built up a bit of experience before diving headfirst into dollar cost averaging.If you’re a novice investor who wants to learn about investing, you might also find it difficult to stay disciplined. When you’re learning, it’s easy to get distracted by other things.It’s important to note that dollar cost averaging doesn’t guarantee success. There are plenty of examples where people have still failed at dollar cost averaging due to making the wrong stock picks.Does Dollar Cost Averaging Really Work?There are two main reasons why dollar cost averaging works. First, it gives you more control over your investments. By choosing to invest small amounts every month, you can avoid being swept away by emotion and impulse purchases.Second, dollar cost averaging makes sure that you always have some money invested. Even if you only put £1 per month, you will eventually end up with a fair amount in your portfolioA Long-Term StrategyThe stock market tends to go up and down over short periods of time. But it doesn’t always move in one direction. There are times when the market goes up and there are times when it goes down. This is called volatility. In fact, the average investor loses money during a bear market.Over the long term, the overall market tends to trend upwards. This means if you could average out your purchases over time you should be able to match the average returns of the stock. In fact, this is exactly what happens.Gaining this average price of the share over time helps smooth out any volatility along the way. If the stock does tank in share price then this means the next time you’re due to buy, you will be lowering your average cost in the long term which is a good thing. On the other hand, if the stock goes up now then you are in profit which to no surprise… is also a good thing.SummaryDollar cost averaging is a great long-term strategy because it ensures you always have some money in the market. It also helps you gain an average return on your shares over time. However, it may not work for all investors that want a more fast paced investing approach.$DJIA(.DJI)$  $NASDAQ(.IXIC)$  $S&P 500(.SPX)$ Follow me to learn more about analysis!!
      8.45K137
      Report
      Why Dollar Cost Averaging Is The Best Investment Strategy
    • LukeyTrags·09-23 15:30LukeyTrags

      Stock Markets| Thoughts on ASX& US stocks

      Hello everyone! Today I want to share some views about stock markets with you.For those interested, this is how the investment universe is classified. Over 50% of invested capital is now passively invested in index/mutual funds, ETFs etc. These are structured to target benchmark weightings.Current distribution of the ASX200. Energy is very under-owned!  $XT ASX200 US$(LF1.SI)$For the SPX/S&P500 (US stock market),#energy comes in at a slightly higher allocation of 4.65%. I suspect this trend of under-ownership in the energy sector is global..$S&P 500(.SPX)$  $SP Plus(SP)$Follow me to learn more about analysis!!
      2.05K44
      Report
      Stock Markets| Thoughts on ASX& US stocks
    • WongKonHow·09-23 15:21WongKonHow

      What the Bonds Yields show?

      All the fixed tenure yields have broken above their four decades of downtrend.To note, the shorter end rate, the fixed 2 year tenure yield is climbing faster than the longer end, the U.S. fixed 30 year tenure government bond yield.How it is going to close in 2022 in this yearly chart, it will be crucial to determine the trend transition; from this long-term downtend to uptrend.$Micro 10-Year Yield - main 2209(10Ymain)$  $Micro 2-Year Yield - main 2209(2YYmain)$  Follow me to learn more about analysis!!
      14.60K61
      Report
      What the Bonds Yields show?
    • windy00·09-23 15:12windy00
      $SHOP There’s many ways to read charts and technicalsPeople know how amazing this company is. Feds are data dependent.If we get a drop in CPI.  And housing keeps going down in price creating a bigger reserve. Oil keeps dropping used cars down 30 some percent.And the consumer stay strong like they are. This will pop big.The feds have to stay hawkish even though they know inflation is coming down.The most positive thing that was said at the fed meeting was they are Data dependent!Everything is completely oversold we will pop before the next CPI.$Shopify(SHOP)$
      1713
      Report
    • Shanosky·09-22Shanosky

      Yes, Interest Rates Really Matter

      A seemingly arbitrary figure can inflict real harm.Photo by Towfiqu barbhuiya on UnsplashWe need to prioritize the tangible over the academic.The conversation around interest rates is almost invariably the latter. We debate over inflation reduction techniques, talk about things like “homebuilder sentiment” or “lender volume,” and generally take a macro-level approach when discussing the subject. Maybe that’s why so few “regular” people seem to know or care about interest rates.And that’s a mistake. Because interest rates can have a severe impact on our actual day-to-day lives. Anyone who lives, either previously or currently, in a household with a shoestring budget understands this intrinsically, even if they don’t know the mechanics behind it. In addition to salary stagnation and runaway costs, interest rates help put the squeeze on the working and middle classes.$40 here, $20 there. It’s not a pretty lethal blow, nor is it death by 1,000 papercuts. It’s more of the “multiple puncture wounds” variety. Several recurring expenses become more…well, expensive, and suddenly, your lifestyle doesn’t work anymore.When need to focus on the seimpacts when we’re discussing interest rates, inflation and macroeconomic sentiment are worthy subjects, but they’re best left to the experts. The ordinary public wants to know what interest rates mean to their household. We should tell them.Big ticketThe most obvious impact is on large, financed purchases. This is no surprise. Obviously, a higher interest rate will have a more significant financial impact (in raw totals) on larger balances than it does on small ones. Mortgages and car loans come to mind.Way back in the ancient times of April, in this very publication,I commented that mortgage volume would be decreasingas interest rates rise. It was part of a larger piece on our housing markets, and it wasn’t a point up for debate. Subsequently,interest rates rose, andmortgage volume declined sharply. This was not a “Bold Prediction”like those on NFL Network on Sunday mornings. This was predictable.Still, some disagreed. A few pointed out that “the average person doesn’t make a decision on whether or not they need a home based on interest rates.” Absolutely, they do not. No person just abruptly changes their entire life because interest rates moved from 4.15 to 3.85 or vice versa.Photo byDillon KyddonUnsplashBut the average bank definitely uses interest rates to calculate repayment ability and determine if that equally average person is going to get approved or declined. What the average Joewantsto do is irrelevant if he can’t get financing to buy the house. And, agree with them or not, some folks do monitor rates and may make their rent/buy decision based on timing. If they think they’re coming in at the top of the market, both in mortgage cost and home cost, they may opt to rent for another year.The difference between a $360,000 mortgage on a $400,000 home (with PMI) at the 2.75% I was giving out in 2021 versus the 6.0% banks are giving nowis roughly $700 monthly.Given that most banks hew pretty closely to a 40% debt-to-income requirement, that comes out to another $1,750 in income needed monthly to qualify, or $21,000 a year. Moving qualification standards up by $21,000 near the median purchase price takesa lotof people out of the market.The difference in payments as rates increase. Mortgage rates used: 2.75%, 6.0%, 8.0%. By author.That’s a tangible effect right there — previously, you had an option to become a homeowner. Now you don’t.That, in turn, can reduce demand, creating a need for price concessions. Price concessions can gradually turn into a down market, which can put recent homebuyers underwater. Particularly the (many) who opted for those 3% down payment programs or people who “took advantage” of 100% LTV equity financing.Rising interest rates don’t automatically mean a housing correction is incoming, but they certainly make it more likely than it would be in a low-interest environment. And each little hike prices another few thousand would-be buyers out of the market. Should people who arethatborderline be buying or getting approved in the first place? Debatable. But as interest rates move higher, larger and larger incomes get impacted.Some people also have home equitylinesrather than loans. These were unquestionably more popular as the market soared and people suddenly found themselves with $200,000 in “equity.” Those lines have variable rates. The impact begins immediately.The accumulationIncreases like that may seem marginally important at best, but that really depends on the household. I spend most of my time writing about the working class. This group (which is way larger than you think) often has a budget that balances by somewhere between $20 and $100 monthly. That’s in a good month — one where no one gets a flat tire, needs to visit a doctor, or accidentally threw out some perfectly good food.40% of American households earn less than $52,000 annually. You take care of a couple of kids on that salary and you better believe you’ll notice $50. The difference between 4% and 8% on a used car loan, all your credit card APRs trending up, that darn home equity line, etc. The ends might be meeting for now, but for how much longer?If your debt is getting more expensive at the same time that costs start rising overall (as is happening right now), it can be doubly worrisome. The increased debt service hampers the ability to save properly for increased costs. Those costs make it more difficult to have leftover money for the higher debt service. You get the point.The only way out of that cycle is with a sudden and fortuitous income increase and, well, good luck with that. People who have time and space for second jobs will pick one up. Those who already have one? Tough luck.Photo byCardMapr.nlonUnsplashIf you’re wealthy, though, all of this is good news. First of all, people may be more desperate for work, so you may be able to pay them less. Costs and budgets aren’t really a major concern for this group, and the rising interest rates mean a higher yield on their investments and savings. Their increased asset growth should offset any price increases and then some.That should ultimately pour more fuel on the already-raging inferno that we call wealth disparity. In America,where that trend has been downright horrible for years, this could also exacerbate social and political tensions.Of course, none of these changes will occur overnight or in reaction to one minor interest rate hike. Taken together and over a sustained period of time? It may be a different story.HorizonsThe stock market had a bad day today, as the Fed appears set to continue raising rates. Of course, that sentence is exactly what turns most people off from the interest rate discussion. I could also add that homebuilder sentiment fell for the 9th month straight, but who cares?The point is that this climate isn’t getting better. It’s getting worse. Everything we discussed above will be our reality. It’s not an academic exercise. Rising costs and stagnant wages have already pushed the working class to the brink. There’s a good chance they’ve had to take out some credit card debt to cover unexpected expenses. That debt’s about to get more expensive along with everything else.Of course, this is also happening alongside perhaps the biggest housing affordability crisis we’ve seen in America, with other nations facing similar problems. Not a great time to make things even tighter.A two-pronged approach is needed. We still need to focus on locking in the wage gains workers saw following the pandemic and building upon them. The freelance and gig economies may continue to do some of this work for us, and trade unions are growing more popular. Still, we’ll need to monitor wages closely when so much of the country is struggling.The cost side is where we really need some work. Yes, inflation is a problem for these families too, and that’s what the interest rate hikes are meant to combat. Hopefully, they do some good. But are supply chain problems caused by a global pandemic and international conflict something that can be one away with through interest rate hikes? Unlikely.We may need to get significantly more serious on issues like affordable housing or loosening up zoning laws to allow more multi-unit buildings. The latter is a local issue and will face immeasurable pushback in many communities. The former is up to the federal government and…well, I don’t think I need to say any more than that.By all accounts, more pain is ahead. We can only hope this storm is short-lived. Many of us are unprepared, and it appears that no help is coming.Follow me to learn more about analysis!!$DJIA(.DJI)$  $S&P 500(.SPX)$  $NASDAQ(.IXIC)$
      1.63K41
      Report
      Yes, Interest Rates Really Matter
    • WongKonHow·09-22WongKonHow

      Dollar Towering, Stocks Cowering as Fed Hikes Higher

      "The chances of a soft landing are likely to diminish to the extent that policy needs to be more restrictive, or restrictive for longer," Fed Chair Jerome PowellThe Fed raised its benchmark rate by 75 basis points on Wednesday, the third such rise in a row, and officials project rates hitting 4.4% this year - higher than markets had priced in before the meeting, 100 bps more than the Fed projected three months ago.Central bank meetings in the Philippines, Indonesia, Switzerland, Britain and Norway are due later in the day with hikes expected everywhere.How has it impacted the market so far?• Dollar rose• Short-dated bonds sold off – Yield curve inverted• Wall Street fell overnight• Extending into Asia sessionThough interest rates should continue to higher both in the short and long-term, and shorter-term faster than the long end, there are some silver linings to note.$Invesco DB US Dollar Index Bullish Fund(UUP)$  $Micro 2-Year Yield - main 2209(2YYmain)$  $Micro 10-Year Yield - main 2209(10Ymain)$ $S&P 500(.SPX)$Follow me to learn more about analysis!!
      1.59K32
      Report
      Dollar Towering, Stocks Cowering as Fed Hikes Higher
    • predator007·09-22predator007

      3 Top Tech Stocks Ready for a Bull Run

      Don't toss Uber, Coupang, and Pinduoduo out with the bathwater.It's been a challenging year for tech stocks as rising rates and other macro headwinds have driven investors toward more conservative investments. It can be tempting to avoid the tech sector altogether until the market stabilizes. Still, investors should recall Warren Buffett's famous advice: "Be fearful when others are greedy, and greedy when others are fearful."With so many tech stocks now trading far below their all-time highs, there are plenty of opportunities to get greedy. I personally believe these three unloved tech stocks fit the bill and could experience big rallies in the near future: Uber Technologies (UBER), Coupang (CPNG), and Pinduoduo (PDD).IMAGE SOURCE: GETTY IMAGES.1. Uber TechnologiesUber's stock currently trades about 35% below its initial public offering (IPO) price of $45. The bulls retreated as the pandemic temporarily disrupted its ride-hailing business, while formidable competitors like DoorDash challenged its Uber Eats food delivery segment. Its lack of profits also made it an unappealing investment as interest rates rose.However, Uber divested its Southeast Asian, Chinese, and Indian subsidiaries and its money-losing advanced technologies group (ATG) over the past few years to narrow its losses. Its ride-hailing business also stabilized last year as the lockdowns ended, and it acquired Postmates to strengthen Uber Eats' position against DoorDash.As a result, Uber's revenues are now rising, its net losses are narrowing, and its adjustedEBITDA(earnings before interest, taxes, depreciation, and amortization) has remained positive over thepast four quarters. Uber's revenue rose 57% to $17.46 billion in 2021, while its adjusted EBITDA loss narrowed from $2.53 billion to $774 million. This year, analysts expect its revenue to grow another 79% to $31.2 billion as it generates a positive adjusted EBITDA of $1.55 billion.Those growth rates are impressive, yet Uber's stock still trades at less than two times this year's sales. But once investors start to fully appreciate Uber's changes, its stock could easily return to its IPO price and continue climbing.2. CoupangShares of Coupang, South Korea's top e-commerce company, have dropped more than 50% below its IPO price of $35 as investors fretted over its slowing growth and steep losses. However, investors seem to be glossing over its obvious strengths.About 70% of South Korea's population already lives within seven miles of one of Coupang's fulfillment centers, and it continues to expand that logistics network to maintain its edge in next-day deliveries. It also locks in its shoppers with its Amazon Prime-like "Rocket WOW" subscription service, which offers free shipping, discounts, food and grocery deliveries, and access to its streaming video platform, Coupang Play, for less than $4 a month.Coupang's revenue rose 54% to $18.41 billion in 2021, but its adjusted EBITDA loss widened from $357 million to $748 million as it continued to launch new features and expand overseas into Taiwan and Japan.Analysts expect Coupang's revenue to grow just 14% to $20.96 billion this year as its growth cools off in a post-lockdown market, but they also expect its adjusted EBITDA loss to narrow to just $129 million. Those growth rates might seem unimpressive, but Coupang's stock also looks dirt cheap at just 1.4 times this year's sales. Therefore, Coupang's stock could bounce back quickly if it stabilizes its sales growth and meaningfully narrows its losses.3. PinduoduoPinduoduo is China's third-largest e-commerce company after Alibaba and JD.com, but it's growing faster than both. It initially expanded across China's lower-tier cities by letting shoppers team up on bulk purchases, and it subsequently entered the agricultural market by directly connecting farmers to consumers.Pinduoduo finished last year with 868.7 million annual active buyers, but it remains less exposed to antitrust headwinds than Alibaba and JD because it generates significantly lower revenues from each shopper. Yet, it's still growing like a weed. In 2021, Pinduoduo's revenue rose 58% to $14.74 billion, and it generated a net profit of $1.22 billion -- compared to a net loss of $1.1 billion in 2020. Analysts expect its revenue and net profit to grow another 30% and 185%, respectively, this year.Those are explosive growth rates for a stock that trades at just 30 times forward earnings and five times this year's sales. Simply put, any positive news about China will likely drive Pinduoduo's stock higher this year.Source: The Motley Fool$Pinduoduo Inc.(PDD)$  $Uber(UBER)$  $Coupang, Inc.(CPNG)$
      77017
      Report
      3 Top Tech Stocks Ready for a Bull Run
    • sadsam·09-22sadsam
      SOFI is Just staring Engines now And will reach escape velocity after J.Powell Gives .50 point Rate hike.Great Time To Invest in SOFI tech is oversold and now Is climbing off lows of day going to go up With a Rip your face off rally over 30% up today after Powell speaks Load up now before Rocket leaves Earth! buy SOFI tech Now.Had to grab another 100 shares @5.68 that takes me up to 18,500 @ $5.43 avg thisfuture 100x stock will make that $1,850,000 in 2 yrs or so.$SoFi Technologies Inc.(SOFI)$
      1113
      Report
    • YNWIM·09-22YNWIM

      Ford Stock Just Got Hammered: Buy the Dip?

      The Detroit automaker's shares sank by a double-digit percentage after management said parts shortages would hurt its third-quarter results.Shares of automaker Ford Motor Company (F) were crushed after management said that its third-quarter profit will take a hit due to parts shortages that are expected to leave about 40,000 to 45,000 near-complete vehicles sitting around at the end of the quarter. With its shares already looking cheap before this sharp decline, is this a buying opportunity forinvestors?Sure, Ford may be facing some unexpected near-term challenges. But investors willing to look beyond the quarter have good reason to consider buying into theautomakerat this discounted valuation. After all, management did reiterate its full-year target for adjusted earnings before interest and taxes (EBIT). This suggests that Ford's current issues will likely be resolved in the fairly near future.Temporary challengesNot only will Ford wrap up its third quarter with 40,000 to 45,000 vehicles "lacking certain parts presently in short supply," according to management's update on Monday afternoon, but these "vehicles on wheels," as Ford refers to them, are disproportionately skewed toward "high demand, high margin models of popular trucks and SUVs."Adding to its difficulties, Ford said inflation-related supply costs during the quarter will be $1 billion higher than anticipated.But the silver lining in the update was that management still views these challenges as temporary headwinds. "Ford again affirmed its expectation for full-year 2022 adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion," the company said in its press release, "despite limits on availability of certain parts as well as higher payments made to suppliers to account for the effects of inflation."Reading between the lines, there are two encouraging items in this report. First, Ford's high-margin vehicles remain in high demand. Second, the company expects full-year adjusted EBIT to hit the company's previously stated target despite inflation-related supply costs running $1 billion higher than anticipated in Q3. These two facts combine to suggest that management has strong and optimistic visibility into the rest of the year.An attractive long-term risk-reward profileAfter Ford stock's slide on Tuesday, the stock is looking extremely cheap. The automaker now trades at less than 5 times the midpoint of management's full-year adjusted EBIT forecast. In addition, while they wait for a stock rebound, investors will get to collect an attractive dividend that, at the current share price, yields 4%.If global supply chain issues improve and automotive production picks back up, there's good reason to believe that Ford's sales could surge higher -- at least, that's what is suggested by management's commentary. Of course, strong demand for its lucrative trucks and SUVs could send the company's revenue and earnings soaring if global supply chain challenges dissipate.But even if the state of the global automotive industry remains dire, the market has arguably priced that challenging environment into Ford's shares. As such, this pullback looks like a great opportunity for long-term investors to scoop up some shares. They'll likely be rewarded handsomely over the long haul.Source: The Motley Fool$Ford(F)$
      2.10K26
      Report
      Ford Stock Just Got Hammered: Buy the Dip?
    • Venus_M·09-22Venus_M
      10 Things You Should Know About Bear Markets (by Hartford Funds)
      2186
      Report
    • Jo Tan·09-22Jo Tan

      Predicting and Timing the Market

      The market reminded me today that its movement cannot be predicted as sentiments of traders remained volatile. It dived after the market "felt" that Powell's remarks signalled thatthe measures in taming inflation would continue.Moments prior to his announcement, the market was waiting in anticipation for good news and expecting a relief rally. However, upon announcement, it fell. I look with amusement at how market sentiments drove the prices of all the stocks up (in anticipation) and down (in disappointment). This, despite the same rate hike as per the last time and knowing that inflation has not ended. Now, I have come to realise that collectively, the market is irrational, prone to jumping in panic and does not look forward very much. Perhaps you may say that it was Russia's actions of immobilisation but that would not be true if you look at the graph.But my opinion is that it will remain stable after a while (probably in the next few days) because the news will slowly be accepted and investors will take the chance to buy lower price stocks. My other opinion is to ignore the noise and not to follow the crowd. Lastly, as can be seen from its collective volatility, this serves as a mini reminder to me not to predictor time the market. @TigerStars  @CaptainTiger  @MillionaireTiger  
      1.06K11
      Report
      Predicting and Timing the Market
    • Capital_Insights·09-21Capital_Insights

      Historical Data: Danger Continues in Sept, Chances are Hidden in Oct

      History has taught the market that September is typically the worst month of the year for U.S. stocks — the S&P 500 has lost an average of 1% in September since 1928.Now, September 2022 has entered the second half of the year, and the $S&P 500(.SPX)$ has also “lived up to expectations”, down more than 1% so far this month.Bank of America analyst Michael Hartnett, the most accurate predictor of the trend of U.S. stocks so far this year, said that the current pain in U.S. stocks is not over, and U.S. stocks are expected to fall until October.Earlier in the year, the analyst said this year's bear market would end in October, with a minimum of 3,000 for the $S&P 500(.SPX)$ The view is also trending in line with a recent Bank of America report on the seasonality trend of the S&P 500.Stephen Suttmeier research strategist at Bank of America technical pointed out in a recent research note that seasonal data going back to 1928 shows that trends tend to be weaker in the second half of each month than in the first half of every month except December.Suttmeier pointed out in the report: According to data, the last 10 trading days of September are often more dangerous, and investors are likely to usher in bargain-hunting opportunities in the next October.Historical data shows that September is also the only month in a 12-month period in which both the average and median returns are negative for the ten trading days at the beginning of the month and the ten trading days at the end of the month. Data also shows that the average $S&P 500(.SPX)$ lost more than 1% in the last ten trading days of September.If you look at the average $S&P 500(.SPX)$ change for each day of the month, the second half of September was even worse.A seemingly unbroken sea of red stands out in the second half of September. In addition to historical factors, Bank of America also highlighted a range of other technical factors in the report that will negatively affect U.S. stocks.The three major U.S. stock indexes fell on Tuesday as investors prepared for the upcoming Federal Reserve meeting on interest rates. BlackRock, the world's largest asset management company, said that U.S. stocks and U.S. bonds will continue to increase volatility in the future, and investors need to continue to consider reducing asset portfolio risks.Economist Nouriel Roubini, better known as “Doctor Doom” – the prophet of torment or Dr. Apocalypse’ – Having predicted the housing crash of 2007 and the subsequent financial crisis of 2008, he said a few days ago that by the end of this year, there will be a "long and ugly" recession in the U.S. and around the world. The $S&P 500(.SPX)$ will fall sharply throughout next year.Doomsday Dr. Roubini believes that the Fed cannot both bring inflation down to the target and avoid a hard landing; once the world falls into a recession, there will be no fiscal stimulus, because debt-ridden governments have run out of fiscal bullets, and there will be a situation similar to that of the 1970s stagflation.Even happened a flat, ordinary recession, the $S&P 500(.SPX)$ could fall by 30%, or 40% in the event of a true hard landing.You May Interested to Read:6 Risks in September: Expecting a Bear Rebound May be Disappointed
      1.12K60
      Report
      Historical Data: Danger Continues in Sept, Chances are Hidden in Oct
    • ART_Invest·09-21ART_Invest

      Stock Market Updates: Crucial Interest Rate Decision Will Drive Markets in The Week Ahead

      Markets saw a spectacular fall last week after higher-than-expected inflation numbers raised expectations of an interest rate decision by the Central Bank in its upcoming policy meeting. For the week, the Dow Jones fell more than 4%, the S&P 500 declined 4.8%, while the tech-heavy based plunged 5.5%. $S&P 500(.SPX)$  $DJIA(.DJI)$  $NASDAQ(.IXIC)$ Two-year interest rates rose to 3.87%, with a spread between the two-year and ten-year now widening to 0.42%, which is often a leading indicator of a recession.The week ahead is packed with a crucial central bank meeting where policymakers will decide on futureinterest rates and key housing data that will show the impact of contracting demand and increased mortgage rates on the housing market.Federal Reserve Policy MeetingIn its two-day meeting on Tuesday and Wednesday, the US Federal Reserve is expected to meet to discuss its decision on the prevailing interest rates in the economy. While economists had previously anticipated the pace of rate hikes to slow down to 50 basis points (bps) per meeting, the recent increase ininflationhas made some fear a 75 bps or even a 100 bps hike in the current meeting.So far, the Fed has raised its federal funds’ rateby a cumulative 225 bps since Marchas it tries to combat inflation which is near a four-decade high. This has already resulted in a severe decline across theequity, fixed income, commodities, and housing market, but a more aggressive central bank decision could mean that asset prices could fall further.Housing Market UpdatesThe week ahead is packed with housing market data from new housing Strats to existing home sales, which is sure to paint a clear picture of how markets are impacted based on rising mortgages and falling demand.New Housing Permits, Source: TradingEconomicsOn Tuesday, the US Census Bureauis set to release data on housing starts and building permits for August. Consensus forecasts show that housing starts willfall moderately from 1.446 millionin July to 1.4 million in August due to falling consumer demand and rising material costs due to inflation.On Wednesday, the National Association of Realtor swill release updated data for existing home sales in august. Existing home sales have fallen consecutively for six months and are set to decline again in August, as mortgage rates crossed 6% for the first time in 14 years.Existing Home Sales, Source: TradingEconomicsForecasts show that home sales will fall to 4.7 million units in August, down from 4.81 million homes sold in July and far from the peak of 6.49 million homes sold in January. Housing Markets Could see more weakness in the coming months as mortgage rates continue to increase and consumers see their existing home equity diminish.S&P 500 ChartS&P 500 Chart, Source:TradingViewBottom LineThe week ahead is packed with a crucial Federal Reserve meeting on interest rates, determining where markets are headed next. Furthermore, housing market updates should also help market participants better understand the current state of the economy.Follow me to learn more about market moves!!
      2.14K34
      Report
      Stock Market Updates: Crucial Interest Rate Decision Will Drive Markets in The Week Ahead
    • KyleRodda·09-21KyleRodda

      Choppy trade heading into the FOMC

      Your morning market wrap. Choppy trade heading into the FOMC. Follow me to learn more about analysis!!$S&P 500(.SPX)$  $NASDAQ(.IXIC)$  $DJIA(.DJI)$  $Micro 10-Year Yield - main 2209(10Ymain)$  $Micro 2-Year Yield - main 2209(2YYmain)$
      175Comment
      Report
      Choppy trade heading into the FOMC
    • WongKonHow·09-21WongKonHow

      Commentary: Supply Chains aren’t Broken, at Least not in Asia

      Supply chains have actually evolved for the better in some places — particularly in Asia — despite all the challenges since 2020 as COVID-19 roiled global trade.Businesses in Asia have done better at weathering shifts in geopolitics, in 3 ways:• Concentrating on building up the inventories• Diversifying their products• Make friends and maintaining smooth trade tiesAs the scale of trade in Asia, raw materials, components and processed and consumer goods are flowing freely and in large amounts between countries.Ultimately, businesses want to do business, not geopolitics. For the US, hoping that one day the great American supply chain will emerge is misguided.Because of geopolitics, leading to today’s global inflation and uncharted interest rate hikes, there are some silver linings to note especially in Asia. Follow me to learn more about analysis!!$Straits Times Index(STI.SI)$  $HSI(HSI)$  $S&P 500(.SPX)$  $NASDAQ(.IXIC)$
      1.04K33
      Report
      Commentary: Supply Chains aren’t Broken, at Least not in Asia
    • XianLi·09-21XianLi
      $XPEV $10 more and I will break even. Yay. I never sell tho when I know it’s a good company that is in the trap for no reason. It has paid off in the past and I have no doubt it will here as well. See it all the time.Look at the 1 year chart, company been doing great, but hey! MORE FOR US!$XPeng Inc.(XPEV)$
      2671
      Report
    • Tiger_Comments·09-21Tiger_Comments

      Dr. Lan: What's The End of Rate Hikes & What Powell Fears Most

      Latest Comment from Tiger Broker Market Commentator-Dr Lan.Fed's rate hike decision seems to be certain. It's basically 75 bps judging from the futures market, with a negligible probability (20%) of 100 bps. Powell will definitely follow the market's expectations. Investors should focus on the discussion around the future policy path on September FOMC meeting.Welcome to Read:82% probability of raising interest rates by 75 basis pointsFed is likely to Raise by 75bps, SPX Short-term Reverse Needed?[PREDICTION] How will SPY close on Wednesday 21 Sept?Source: CNBC.comAfter this rate hike, the US fund rate will enter the 3%-3.25% range. This rate is essentially flush with the current 10-year rate, and even though the 10-year rate will continue to climb after the rate hike, the curve will definitely flatten.Now there are 2 other questions to ponder:What is the end of the Fed's rate hike - 4%? or 5%?Will the Fed stop raising rates or even start lowering them by early next year as the futures market predicts?Before we analyze the path of the Fed's rate hikes, let's look at Powell's style.1. Powell's personal style - not confidentPeople who have followed Powell for a long time and analyzed his personality will know that he is not confident.Powell's lack of self-confidence comes from 3 areas:(1) lower education background than that of the former Federal Reserve Chairman(2) bullied by the first president he met after taking office(3) encountered an unprecedented pandemic and high inflation.The unconfident Powell likes to quote history and often mentions "19xx" from time to time between his words. It is a very good habit to like to study history, especially in investing. Hedge funds also "backtest" the historical data. But when he quoted history too many times. People may feel that he is not confident about his own words.The Great Inflation, which lasted for 17 years from 1965 to 1982, impacted on Powell's current characteristics. After WW2, the inflation was not obvious but there were 17 years of hyperinflation in The Great Inflation. This period wad also called"the greatest failure of American macroeconomic policy in This period wad also called "the greatest failure of American macroeconomic policy in the postwar period" (Siegel 1994).WSJ found that Powell is a great admirer of former Fed Chairman Paul Volcker, and often quotes Volcker's autobiography "Keeping At It" in his speeches.Volcker's main achievement was to solve the 17-year-long US inflation. Although the US economy eventually entered a severe recession, inflation has also gone down.2. Low inflation and high employment can't be achieved at the same time?According to the classical macro curve "Phillips curve", we can only take one end between the two goals of inflation and employment.If unemployment rate is low, then inflation will be high; if inflation is down, then unemployment will be high.But the Phillips curve is not fixed; it will move up and down.During the Great inflation, when inflation went high, the unemployment rate also went up. So hyperinflation becomes the main target for the Fed to deal with.After the financial crisis in 2008, global inflation, especially in the US, has remained low, so the Fed's goal has been to raise employment. But now employment is saturated and inflation is high, so the Fed's goal is to deal with inflation.3. Lessons from the Great InflationWhy did US have a 17-year-long hyperinflation? There are both man-made reasons and the natural laws of the economy.But one important lesson is that the longer hyperinflation lasts, the less likely it is that inflation will come down, creating a negative feedback. It means "if the bread maker expects the price of flour to continue to rise, then the bread maker will raise the price of bread; if the landlord expects the bread maker to raise the price of bread, then he will also raise the price of rent". When everyone expects inflation to continue, then inflation will become more stubborn.Powell also know this. So he repeatedly says that he wants to wipe out inflationary expectations in society.For Powell, the goal now is to deal with inflation at all costs, and the longer hyperinflation lasts, the more troublesome it becomes. Therefore Powell will not really care about the stock market rise or fall.So if the market still interpreted his words as dovish, and the stock market rises, Powell should not be happy. The stock market rises will also drive inflation: company stocks rise, then the company's capital expenditure will also rise.4. The end of rate hike is 4% or 5%?The analysts have different estimates on the end fund rate:But I think 4% or 5% will not be the ultimate goal of the Fed, because the Fed does not have an ultimate goal. We can refer to the end rate during the Great Inflation when Volcker raised the interest to 20%.Many people knew that the Fed would cancel the dot plot this time, but no one bothered to why is that. The dot plot will give the long-term path of rate hikes.The Fed canceled the dot plot this time because Powell does not want to give the market any hope of the possible "end of rate hike". Powell does not want the market to interpret the dot plot as: After another 100 bps, the Fed will stop rate hike.Bottom LineDuring the 17-year great inflation, inflation was up and down many times. The lowest point of the inflation retreat was once at 3.7%, but then it rose rapidly again.I don't know if history will repeat itself. But Powell will learn from history and dare not ease up on rate hikes, let alone cut rates. Even if inflation falls to 3.7%, Powell may not cut rates in order to avoid a similar repeat of hyperinflation this time.Any expectation that the Fed will turn dovish is illusory.
      21.92K275
      Report
      Dr. Lan: What's The End of Rate Hikes & What Powell Fears Most
    • Capital_Insights·09-20Capital_Insights

      6 Risks in September: Expecting a Bear Rebound May be Disappointed

      Hawkish rate hike storm, Davis double kill, high inflation, economic recession, repurchase flameout, pension fund sales, quantitative to short... U.S. stocks are still not good, agencies warn that even if there is a small bear market rebound, and don't hold your hopes up.Below are some of the factors that still affect the development of US stocks:1. Hawkish Fed's Rate HikesThe market expects that the Fed will raise interest rates by 75 bps on Wendesday, also the expectation of raising by 100 bps has also increased.  Meanwhile, the expectation on next two interest rate meetings this year will maintain the pace of rapid interest rate hikes.Goldman Sachs’ forecast is more aggressive.The bank raised its final interest rate forecast by the end of 2022 to a range of 4%-4.25%. Specifically, the interest rate will be raised by 75 bps in September and 50 basis points in November and December.According to the latest survey of economists released by the media, most economists expect the ceiling of the federal funds rate to hit 4% by the end of 2022, to maintain this position in 2023, and to cut interest rates in early 2024.You may know that raising interest rates will cause asset prices to fall, but don't understand the process clearly. The impact of interest rate hikes is mainly divided into two parts, namely valuation and performance, also known as Davis Double Play.The first play is that the rise in interest rates will lead to the revaluation of assets, the stock price-earnings ratio will drop sharply, and the fall in asset prices often occurs in an instant (usually within a month);The second play is the decline of the macro economy and business operations. This kind of market generally has a long cycle and will be accompanied by large fluctuations in asset prices (not necessarily falling). For like the central bank's interest rate hike will first pass on the deposit and loan interest rates of commercial banks, and then affect commercial activities and consumption habits.Davis’s financial life had three phases: learn, earn, and return. The learn phase lasted into his early forties, and the earn phase stretched from his forties into his late seventies. At that point, he tackled the return phase.” Return phase = philanthropy. Davis died in 1994 leaving $900 million to personal cause.www.amazon.comOn Monday's trading, the US 30-year mortgage rate soared to 6%, the highest since November 2008. The dollar was unchanged after the news, but all asset prices fell. This shows that the rise in risk-free interest rates is gradually eroding the real demand for assets.2. High Inflation and RecessionLast week, the economic barometer $FedEx(FDX)$ issued a profit warning, the CEO even directly warned that "we are entering a global recession, and the company data is not a good omen."Global inflation is highThe Monetary Authority of Singapore said that in the medium term, global inflation is likely to remain at higher levels for longer than the low levels of benign inflation seen over the past decade.The U.S. CPI data rose more than expected in August and the number of initial jobless claims released a signal that inflation was entrenched, reinforcing the importance of accelerating interest rate hikes.Overall, high inflation and economic recession are still the main factors under pressure on US stocks. At present, the actual interest rate hike action has not been fully transmitted to the demand side, and reducing inflation not only depends on the strength of interest rate hikes, but also takes time to ferment.Bank of America's global fund manager survey for September shows fund managers believes recession is likely has increased further in September to 68%, the highest since May '20 ,and 79% of the global fund manager survey participants see slower inflation over the next 12 months than today, hinting that inflation may have peaked last month.Goldman Sachs also sharply lowered its GDP growth rate forecast for the U.S. economy this year to 0 from 4% a year ago, and lowering its economic forecast for next year to 1.1% from an earlier 1.5%.3. Companies Buyback StalledThis week, repurchase, an important engine of U.S. stocks, stalled. Beginning last Friday, 50% of S&P 500 listed companies entered a silent period for repurchase for one month. During the period of silence, Goldman's repurchase unit has turned back to its usual busy state, with the 10b-5.1 program kicking in, reducing average daily trading volume by 30-35%, or about 0.7 times the average daily volume in 2021. The slowdown is crucial and means stocks could be even worse.https://www.zerohedge.com/, BY TYLER DURDEN4. Month-end and Quarter-end Rebalancing of Pensions FundsAccording to Goldman Sachs calculations, there will be more selling pressure by the end of September - pension fund monthly and quarter-end rebalancing.Goldman Sachs models estimate that pensions could sell $18 billion in equities. From the perspective of the past three years, in terms of absolute dollar value, the $18 billion sell-off ranked 58th; in terms of net value, the $18 billion sell-off ranked 33rd, and the scale is not small.While Last two weeks of quarter could see rally due topension fundrebalancing in a similar manner to March and June. This is counter to strong seasonal tendencies and up to 84 billion dollars of debt securities maturing on Fed's balance sheet in last two weeks.5. CTA Strategy funds May Turn to ShortEarlier, UBS strategist Nicolas Le Roux pointed out that CTA will turn bearish again in September, and recently US stocks may face some selling pressure from CTA in the next two weeks.JPMorgan analyst John Schlegel said, if the economy ends up heading for a recession, U.S. stocks could even fall below their mid-June lows, at which point the CTA strategy fund could be shorting stocks further.Goldman Sachs expects to buy $7.7 billion in stocks in the coming week and reduce its holdings of $614 million in the next month as the stock market rebounds.https://www.zerohedge.com/, BY TYLER DURDEN6. Fund's Cash Balance A 20 Years HighAnother statistic to watch is that fund managers have now raised their cash balances to 6.1%, the highest level in 20 years. Rising interest rates have made cash investing equally attractive, both positive and negative.Bank of America's global fund manager survey for September shows sentiment among money managers is 'super-bearish'. ET takes a look at the key highlights of the brokerage's survey based on responses from 212 participants with $616 billion in assets under management (AUM). The findings reflect the mood among global fund managers.Fund managers' average cash balance has risen to 6.1% in September - the highest since October 2001 after the 9/11 shock, and well above the long-term average of 4.8% as recession concerns rise, the survey said.The bad news doesn't stop there, US stocks are hardly optimistic this week, and Goldman Sachs warned that anyone expecting a "bear market rebound" may be disappointed.$S&P 500(.SPX)$$SPDR S&P 500 ETF Trust(SPY)$ ,$ProShares Short QQQ(PSQ)$ ,$NASDAQ(.IXIC)$ ,$Nasdaq100 Bear 3X ETF(SQQQ)$ ,$iShares Russell 2000 ETF(IWM)$ ,$DJIA(.DJI)$ ,$Dow30 Bear 3X ETF(SDOW)$Want to join other topics as well to win more coins? [Markets Related]:Fed Meeting(21 Sept): 75bps rate hike, or 100bps?
      27.90K207
      Report
      6 Risks in September: Expecting a Bear Rebound May be Disappointed
    • KyleRodda·09-20KyleRodda

      News about Macroeconomy

      Your morning market wrap. A late rally on Wall Street; expectations for Fed policy haven't changed.Follow me to learn more about market analysis!!$NASDAQ(.IXIC)$  $DJIA(.DJI)$  $S&P 500(.SPX)$
      1Comment
      Report
      News about Macroeconomy
    • Cody_Collins·09-20Cody_Collins

      Should You Finally Consider Adding Bonds to Your Portfolio?

      Drastic times call for drastic measuresPhoto by Ante Hamersmit on UnsplashWe are in “unprecedented” times; a “polycrisis.”A pandemic, war in Ukraine, inflation, supply chain issues, an impending recession, high government debt, rising energy prices, climate issues, and political divide.It may seem like we are facing many issues, but these have been ongoing for months. There’s almost nothing new to discuss.One new topic to discuss is the rising short-term interest rates and falling financial markets.Interest RatesThe Federal Reserve has been raising the benchmark interest rate for the last few months. Since raising rates in March, the Fed has raised rates at each of the following meetings. And they will raise rates at their September meeting (September 20–21); it is widely accepted the rate increase will be 0.75%.Interest rates are now at an elevated level. After years of being held near zero, they are finally above the Fed’s inflation target of ~2%. The only issue,inflation is now at 8%.So the 2% interest you receive on your savings is still losing purchasing power in comparison to the current inflation rate.Similarly, the 3% interest from government treasuries also loses purchasing power. But at least it provides investors with a small return, compared to stocks, which have tanked for all of 2022.SourceThe black line represents the current interest rates from U.S. Treasury yields, the highest they have been in many years. Long-term and short-term treasuries are offering yields not seen in years.Should You Buy Bonds?There are, of course, many options when considering bonds. But for these purposes, we will only look at U.S. Treasuries.While some of the longer-term treasuries can offer more than 3% for a decade(s), those are not what caught my attention. Not listed in the image above are the rates for 1-Month and 2-Month.The 1-Month is above 2.50% and the 2-Month is at 3%.These are tempting investments. As long as the next month’s inflation rate is below 2.50%, or inflation for the next two months is below 3%, these would be good investments.And not to mention, there is no state income tax on treasury bill interest.Opportunity CostInvesting in short-term treasury bills makes sense when looking at the real interest rate. But there are other uses for your money than just treasury bills.The two most relevant are stocks and cash.YTD the stock market is down around 20%. A small gain of ~2–3% from treasuries is better than losing money.However, the market is a long-term investment. Investing today, or even at the beginning of the year, into the stock market is a choice for the long haul. Over time, the stock market will go up.As the market continues to slide down, the money put into treasury bills could instead be used toDollar Cost Averageinto the market.The other option, cash, is a sensible alternative givenour uncertain future. Bloomberg Economics’ Model says there’s a 100% probability of a recession by the start of 2024. (Not sure if I’d describe them as optimistic or realistic. )Currently, the unemployment rate is extremely low, which means it can only worsen.Inflation is still persistent and energy prices are still high as winter approaches.Cash can be an excellent option for unexpected turbulence in the next year. It is also a great option to hold and invest in the stock market if / when prices fall some more.Final ThoughtsIn addition to treasury bills, another investment to consider isI bonds. They currently yield ~8% but require a longer commitment (at least a year.)Personally, I am not investing in any bonds — treasuries or I bonds. I’ve considered I bonds and may look more into short-term (1-Month or 2-Month treasuries). For now, I want to build cash.I still believe in dollar cost averaging into the stock market.I believe markets can continue falling into 2023. Thus, I’d like to have a sizable pile of cash available to dump into the market if things get bad. And if they don’t, then I will keep dollar cost averaging, per usual.$S&P 500(.SPX)$  $NASDAQ(.IXIC)$  $DJIA(.DJI)$  $Micro 10-Year Yield - main 2209(10Ymain)$  $Micro 2-Year Yield - main 2209(2YYmain)$ Follow me to learn more about analysis!!
      62615
      Report
      Should You Finally Consider Adding Bonds to Your Portfolio?
    • PortfolioHub·09-23 15:44PortfolioHub

      Why Dollar Cost Averaging Is The Best Investment Strategy

      Many people don’t know what dollar cost averaging is, how it works or why they might want to do it. In this article we’ll discuss the basics of dollar cost averaging and explain how it helps investors avoid big losses during market downturns as well as providing stable returns long term.Photo byLive RicheronUnsplashTime In The Market Beats. Timing the marketMarket timing is a strategy where investors attempt to predict future stock prices. This is done by looking at historical data and trying to determine what the next trend might be. If you think the economy is about to turn around, for example, you could buy stocks that are expected to do well once the economy picks up steam. On the flip side, if you believe the economy is headed south, you could sell off shares of companies whose sales are likely to decline.The problem with market timing is that it doesn’t always make sense. Markets don’t always behave predictably, and determining whether an asset is under valued or over priced is extremely difficult. As a result, you may decide to “wait for the dip” on an asset but instead the asset rises rapidly and you miss out on gains.Or on the other hand, you may sell a stock you think will go up in the long term because you think it may go down in the short term and you might be able to make a quick profit. Well that may happen. But the stock may also continue to run up and if you have to buy back in at higher prices, then you have just missed out on some more profit.The whole idea behind dollar cost averaging is that you don’t care about the price at the time you buy. You just consistently buy the same asset over a long period of time in regular intervals. Historically this has shown to be more consistent for investors then trying to trade on short term moves.How Does Dollar Cost Averaging Work?When it comes to investing, one of the most common ways people try to save money is dollar cost averaging. In fact, according to Investopedia, about half of investors use this method. But what exactly does dollar cost averaging mean? And how does it work?To understand how dollar cost averaging works, let’s start with an example. Imagine that you want to purchase 10 shares of company X. Instead of purchasing all of these shares in one go, you may instead decide to purchase 1 share each month for 10 months.Or (the way I do it), each month after getting my pay from my fulltime job. I add whatever money I have to invest that month into all of my favourite stocks. I don’t care about the share price that particular day because many of my stocks are long term plays. I don’t expect to sell for 10+ years, unless my conviction changes.Rewards of Dollar-Cost AveragingThe key to dollar-cost averaging is to stick with it long enough to see a difference. On a day-to-day basis anything can happen. The advantages and disadvantages below are in line with what to expect if you stick to this strategy long term.Advantages of dollar cost averagingThe concept behind dollar cost averaging is simple: you buy shares of a stock over time rather than paying full price for it all at once. This method helps to keep emotions out of the equation because there are no big decisions to make about whether or not to invest.This strategy allows people to purchase items over time without having a lot of money available. For example, let’s say you want to start investing in stocks. You can start with very little money, even £10 per month to get started.You can set up recurring payments through your bank account or credit card so that you never need to worry about running out of funds. Dollar cost averaging can become very automated so you don’t even need to think about it. Especially when picking something like an index fund with a diversified basket of stocks.Disadvantages of dollar cost averagingDollar cost averaging isn’t right for everyone. If you’re looking to make a large investment, you’ll probably want to consider buying everything at once. Also, if you’re new to investing, you should wait until you’ve built up a bit of experience before diving headfirst into dollar cost averaging.If you’re a novice investor who wants to learn about investing, you might also find it difficult to stay disciplined. When you’re learning, it’s easy to get distracted by other things.It’s important to note that dollar cost averaging doesn’t guarantee success. There are plenty of examples where people have still failed at dollar cost averaging due to making the wrong stock picks.Does Dollar Cost Averaging Really Work?There are two main reasons why dollar cost averaging works. First, it gives you more control over your investments. By choosing to invest small amounts every month, you can avoid being swept away by emotion and impulse purchases.Second, dollar cost averaging makes sure that you always have some money invested. Even if you only put £1 per month, you will eventually end up with a fair amount in your portfolioA Long-Term StrategyThe stock market tends to go up and down over short periods of time. But it doesn’t always move in one direction. There are times when the market goes up and there are times when it goes down. This is called volatility. In fact, the average investor loses money during a bear market.Over the long term, the overall market tends to trend upwards. This means if you could average out your purchases over time you should be able to match the average returns of the stock. In fact, this is exactly what happens.Gaining this average price of the share over time helps smooth out any volatility along the way. If the stock does tank in share price then this means the next time you’re due to buy, you will be lowering your average cost in the long term which is a good thing. On the other hand, if the stock goes up now then you are in profit which to no surprise… is also a good thing.SummaryDollar cost averaging is a great long-term strategy because it ensures you always have some money in the market. It also helps you gain an average return on your shares over time. However, it may not work for all investors that want a more fast paced investing approach.$DJIA(.DJI)$  $NASDAQ(.IXIC)$  $S&P 500(.SPX)$ Follow me to learn more about analysis!!
      8.45K137
      Report
      Why Dollar Cost Averaging Is The Best Investment Strategy
    • WongKonHow·09-23 15:21WongKonHow

      What the Bonds Yields show?

      All the fixed tenure yields have broken above their four decades of downtrend.To note, the shorter end rate, the fixed 2 year tenure yield is climbing faster than the longer end, the U.S. fixed 30 year tenure government bond yield.How it is going to close in 2022 in this yearly chart, it will be crucial to determine the trend transition; from this long-term downtend to uptrend.$Micro 10-Year Yield - main 2209(10Ymain)$  $Micro 2-Year Yield - main 2209(2YYmain)$  Follow me to learn more about analysis!!
      14.60K61
      Report
      What the Bonds Yields show?
    • Capital_Insights·09-06Capital_Insights

      Fed QT Doubles in Sept, How Will it Impact the Market?

      Entering September, the global market ushered in an important change: the Fed's quantitative tightening (QT) accelerated.Although it has been more than three months since the Fed started quantitative tightening in June, under the aggressive interest rate hikes, QT, which has a very low sense of existence, has not caused much trouble, and in the case of sufficient bank reserves, the impact of shrinking the balance sheet is indeed limited.However, with the progress of the reduction of the balance sheet and the doubling of the monthly scale, the market began to feel uneasy, and worries began to rise.The Fed officially started to shrink its balance sheet in June, with a monthly cap of $47.5 billion from June to August, and this rate will double in September, raising the limit to $95 billion, including $60 billion in U.S. Treasuries and 35 billion in mortgage-backed securities (MBS), or about 1% of the balance sheet.Balance Sheet Data from St. Louis Fed, chart by MishAccording to statistics, the Fed has absorbed $2.2 trillion in reserves from the banking system in the form of overnight deposits, compared with zero at the beginning of last year.For now, the reduction in reserves is not a problem, and banks still have $3.3 trillion in reserves, more than at any time before last year, but there are risks.Analysts pointed out that, on the one hand, with the acceleration of QT and the decline of bank reserves, the willingness of banks to take risks will decrease, which will affect the overall liquidity of the market.On the other hand, when reserves fall below safe levels, the Fed will have to stop rolling off its balance sheet early in order to avoid a damaging spike in repo rates.This also means that the Fed will have to adopt more aggressive interest rate hikes to make up for the lack of rolling balance sheets, and the impact on the market will be self-evident.Regarding the impact of QT, Yellen, the former chairman of the Federal Reserve and the current U.S. Treasury Secretary, once had a vivid metaphor: "It's like watching the paint dry, which is unremarkable."Solomon Tadesse, head of quantitative strategy for equities in the Americas at Societe Generale, wrote in a note last week: From a policy perspective, a lack of awareness and clear communication of the potential impact of QT could create the risk of over-tightening. On the market side, an increase in QT could trigger the next drop in the market. In other words, investors haven't realized how aggressive the QT cycle is going to be.Hedge fund giant Bridgewater is also concerned about the impact of QT. The company believes that the market will be plunged into a "liquidity hole" as a result. Bank of America equity strategist Savita Subramanian believes that QT alone could lead to a 7% drop in shares as the boost from quantitative easing reverses.Alex Lennard, investment director at Ruffer LLP, a British investment manager, said an accelerated sell-off in the Fed's holdings of U.S. Treasuries would suck liquidity out of the market, just as rising interest rates and falling stock and bond prices would increase demand for cash. Shock to stock and bond markets."Deutsche Bank strategist Tim Wessel noted in a recent report that the Fed may stop QT when bank reserves fall to $2.5 trillion. At the current rate at which money market funds are taking deposits and placing them in the Fed's reverse repo facility, that level could be reached as early as January 2023.Details of QT Path:Source: https://mishtalk.com/Plans for Reducing the Size of the Federal Reserve's Balance SheetIn January 2022, the Fed announced an intention to start QT.In May, the Fed announced itsPlans for Reducing the Size of the Federal Reserve's Balance Sheet.In June the Fed finally got around to doing QT.From January until March, despite a housing market totally out of control, the Fed kept doing QE (both treasuries and mortgage backed securities (MBS)Plan CapsBeginning on June 1, principal payments from securities held in the System Open Market Account (SOMA) will be reinvested to the extent that they exceed monthly caps.For Treasury securities, the cap will initially be set at $30 billion per month and after three months will increase to $60 billion per month. The decline in holdings of Treasury securities under this monthly cap will include Treasury coupon securities and, to the extent that coupon maturities are less than the monthly cap, Treasury bills.For agency debt and agency mortgage-backed securities, the cap will initially be set at $17.5 billion per month and after three months will increase to $35 billion per month.June 1, 2022 AssetsTotal Assets: 8,915,050Treasuries: 5,770,779MBS: 2,707,446August 24, 2022 AssetsTotal Assets: 8,851,436Treasuries: 5,700,628MBS: 2,725,906Three-Month Apparent ProgressTotal Assets: 8,915,050 - 8,851,436 = 63,614Treasuries: 5,770,779 - 5,700,628 = 70,151MBS: 2,707,446 -2,725,906 = -18,460Apparent Progress NotesThe key word regarding progress is the word "apparent".On August 20, I commentedYes, Quantitative Tightening by the Fed is Really HappeningHere is an explanation from Joseph Wang, a former senior trader who handled QE trades for the Fed.MBS Holdings Really Are DecliningThe Fed’s MBS holdings are decreasing, even if this is obscured by the sawtooth pattern of its holdings, which arises from the repayment and settlement schedule of MBS, wherein MBS bonds receive principal repayments on the 25thof the month and newly purchased MBS settle on the 15thof the month. The spikes in Fed MBS holdings arise from the settlement of newly purchased MBS; the declines are due to principal repayments. The Fed is still receiving MBS principal repayments each month that must be reinvested, so its MBS holdings continue to show periodic spikes even as overall MBS holdings are declining.The Fed’s policy of settling MBS purchases within a three-month window adds another wrinkle to understanding Fed MBS holdings. The Fed is the largest investor in the MBS market and aims to minimize any potential disruption by postponing MBS settlement if it judges that postponement would improve market functioning.This means some of the increases in the Fed’s MBS portfolio could arise from purchases conducted three months ago, including purchases from reinvesting principal received the period between the end of QE and the start of QT.These delayed settlements are recorded as commitments to buy MBS and have steadily declined over the months. These commitments obscure the steady drop of Fed MBS holdings but will dissipate in a few months.Just Wait for SeptemberQT is taking place exactly as the Fed has telegraphed and the balance sheet declines will become more apparent in the coming months. Soon the QT pace will quicken, and all past-purchased MBS will have settled. From that time, the Fed’s balance sheet will clearly and steadily decline each month.Projected Principal PaymentsNew York Fed Projected Payments
      2.60K351
      Report
      Fed QT Doubles in Sept, How Will it Impact the Market?
    • TigerObserver·09-05TigerObserver

      Weekly: Market May Dip Further as FED's Rate Hike+Slower Earnings Growth

      The major U.S. stock indexes fell around 3% to 4%, marking the third weekly setback in a row for the $S&P 500(.SPX)$. The decline was steepest for the $NASDAQ(.IXIC)$ , which has fallen nearly 11% over the past three weeks.As of last Friday,$DJIA(.DJI)$ YTD is -12.5%,$NASDAQ(.IXIC)$ YTD is -25.3%,$S&P 500(.SPX)$ YTD is -16.8%. $S&P/ASX 200(XJO.AU)$ &$Straits Times Index(STI.SI)$ in YTD performance is -8.09% & 2.97% respectively.You May Interested to Read: August Recap & 2 Strategies to Break the "Sept Curse"!Beware: 5 Reasons to Fall Back into a Bear MarketThe three major U.S. stock indexes fell to their lowest levels since July. The latest non-farm payrolls report did not settle the suspense of the FED's decision this month. Facing a new round of geopolitical and economic downside risks, investors chose to stay on the sidelines before the long weekend holiday.According to the AAII survey of the American Association of Individual Investors, the net bearish ratio of U.S. stocks rose sharply from 3.3% to 28.5% last week. The recent increase in the volatility of growth stocks and group stocks that retail investors have actively participated in has become an important reason for the decline in market confidence.Binky Chadha, Deutsche Bank chief global strategist, warned that investors could be squeezed by another bear market rally.Peter Oppenheimer, chief global equity strategist at Goldman Sachs, believes that the soft landing of the U.S. economy that stock market bulls are looking for is unlikely given the continued rise in inflation and the risk of a global slowdown.As the September interest rate meeting is approaching, the assessment of monetary policy will continue to be a disturbing factor, and the long-short game is gradually heating up.Sectors & Stocks Performances Review:Judging from the performance of the sectors last week, all sectors fell, and the raw materials sector fell the most. In terms of individual stocks, $Apple(AAPL)$ ,$Alphabet(GOOG)$ , $Amazon.com(AMZN)$ , and $Microsoft(MSFT)$ fell by 2% to 4% respectively.Weekly Top Gainners of S&P 500:$DXC Technology Company(DXC)$ ,$Cardinal Health(CAH)$ ,$Bath & Body Works Inc.(BBWI)$$Ulta Salon Cosmetics & Fragrance(ULTA)$$Dollar General(DG)$ ,$Target(TGT)$$Gilead Sciences(GILD)$$AES Corp(AES)$$MarketAxess(MKTX)$ .Macro Factors to Focus:Jobs Consistency: The U.S. labor market didn’t generate new jobs in August at the same rapid clip that it did in July, but the latest month’s gain of 315,000 was slightly above most economists’ expectations. The unemployment rate rose to 3.7% from 3.5%, but that increase stemmed in part from a rise in Americans entering the labor force by seeking employment.Earnings Scorecard: Companies in the S&P 500 posted an average second-quarter earnings gain of 6% over the same quarter a year earlier, according to FactSet data from the recently concluded earnings season. That result marked the slowest growth rate since the fourth quarter of 2020.Surging 10-year Yield: Growing expectations for further sharp interest-rate increases weighed on prices of U.S. government bonds, sending the yield of the 10-year U.S. Treasury bond up for the fifth week in a row. The yield climbed to around 3.20% on Friday, up from 2.64% at the end of July.Other Markets:2-year Yield Spike: Before closing the week at 3.40%, the yield of the 2-year U.S. Treasury bond on Thursday climbed to 3.52%, the highest level since 2007. The 2-year yield is especially sensitive to the near-term outlook for U.S. Federal Reserve policy and expectations for another big interest-rate increase to be announced on September 21.Oil Pullback: U.S. crude oil was trading around $87 per barrel on Friday, dropping more than 6% for the week. Concerns about softening global demand weighed on the price, in part owing to renewed economic restrictions in China to fight COVID-19 outbreaks in some cities.Currency Divergence: Japan’s yen was trading at around 140 to the U.S. dollar on Friday, its lowest level since 1998. The yen’s value relative to the dollar has fallen around 18% year to date, in part reflecting expectations of higher interest rates in the United States and Japan’s continued embrace of a low-rate policy.Gold Decline: Gold prices fall for the third week in a row! Gold futures $Gold - main 2212(GCmain)$ prices fell 1.55% last week. Gold prices may still have room for a long-term decline due to strong dollar under rake hike.The Week Ahead: September 5-9MondayLabor Day holiday, U.S. financial markets closedTuesdayInstitute for Supply Management’s nonmanufacturing indexWednesdayTrade balance, U.S. Census BureauThursdayConsumer credit, U.S. Federal ReserveWeekly unemployment claims, U.S. Department of LaborFridayWholesale inventories, U.S. Census Bureau​What's your understanding of this market?Any great strategy, please join below to discuss.
      45.38K1.39K
      Report
      Weekly: Market May Dip Further as FED's Rate Hike+Slower Earnings Growth
    • Elliottwave_Forecast·06-24Elliottwave_Forecast

      USDNOK – Dollar remains strong

      USDNOK – Dollar remains strongJune 23, 2022ByEWFZorraysWe have been pretty bullish on the Dollar throughout the year and I believe Dollar has more strength to come.Recently, we recently posted a trade idea on USDNOK as we saw the market was correcting in a 3 or 7 swing structure and we took advantage of this.Lets have a look at a before short21st June 2022 – 1 Hour TimeframeWe can see that wave 2 was correcting as a Zigzag and our entry is based on wave ((c)) = ((a)) from the extreme of wave ((b)). Therefore, our entry was at 9.87 and the invalidation for the trade was at 1.618% extension at 9.75.The above screenshot shows that this trade was already triggered as it reached into the bluebox zone but we still had projected wave (iv) and (v) to complete this 5 wave sequence into wave ((c)) of 2.22nd June 2022 – 1 hour timeframeSo we can see here, wave (iv) and (v) did take place and it was very much deep towards 1.618% – but the trade was not stopped out. We can see that the trade has been unfolding towards a 5 wave sequence into wave ((i)) of 3.We have now taken 50% profits off the table and moved stoploss the same distance between the entry and 50% from wave ((b)) below the entry point. Therefore, the trade is 100% risk free.Next stepWe are waiting for price to complete a 5 wave sequence to the upside and reach 100% extension of wave 3 against 1. But prior to that we want to see price breaking the extreme of wave 1.Source:https://elliottwave-forecast.com/forex/usdnok-dollar-remaining-strong/
      10.06K172
      Report
      USDNOK – Dollar remains strong
    • CourtneyDS·08-03CourtneyDS

      How Vicious Will The Recession Be?

      The Recession Will Be Deeper Than You ExpectThe average American and politicians seem to think the economy is fine. Fed Chairman Powell talks about how strong the labor market is to support his contention that the economy is strong.But cracks are appearing in this façade.We just technically went into a recession with two consecutive quarters of negative GDP.Consumer expectations are plungingThe housing market is starting to crackBut how deep will it be? Will it be 2008 all over again? Or milder or a depression?I’ll give you my opinion another day. But today, I want to focus on what the bond market thinks.I could give the case that the bond market is the smartest market there is. I don’t know if I would win that argument but I could make a good case for it.The chart shows the difference between 3 month treasury bill yields and the ten year yield. This is the 3 mo/10 year yield curve.There have been 18 recessions since World War II. This yield curve has predicted each and every one of them. As you can see, we are there now.But notice the absolute collapse in the curve. The curve just fell off the edge of the table. No controlled drop. Nope, A collapse.Why?And how do we make money from it?The collapse occurred because the two ends of the curve went in opposite directions! Rare!The Fed is raising the yield on 3 month bills but the 10 year yield dropped sharply.But why are long yield collapsing?The only possible answer is that they believe:The Fed policy will cause a recessionThe recession will be deep and viciousThe recession will cause inflation to collapse from the current 9.1% to less than 2%I need you to think about how deep and hard the recession would have to be to cause inflation to drop so much in such a short period of time.I think the bond traders are looking for a recession worse than the Great Recession of 2008! I’m not ready to say they are looking for a depression but something worse than 2008 will be at least approaching a recession.Right now, the stock market is in the middle of a tepid seasonal rally, But that rally ends soon and we get a seasonal drop into fall.The way to make money will be to:Sell stocks in August like QQQBuy bonds now like TLTSell housing stocks like XHBTo get my actual trades, subscribe to my weekly video newsletter. Go to wsw2021.com to learn more
      7.21K339
      Report
      How Vicious Will The Recession Be?
    • 程俊Dream·06-14程俊Dream

      The Fed will make a big move this week ,How will gold and oil change?

      After the latest January inflation data was released and hit a new high, the market had new expectations for the Fed's actions. According to the latest Fedwatch data, the probability of FOMC in July has been 50-50. In this week's expectation, although there are some variables, the probability of 50 basis points is obviously superior.​​Data show that the probability of raising interest rates by 50 basis points on June 15th is close to 80%. Although this figure has dropped significantly compared with 98.2% a week ago, as we said before, it is still relatively stable when it exceeds 70%. In contrast, July's data, which also overwhelmingly raised interest rates by 50 basis points a week ago, is now seriously divided. Even the probability of raising interest rates by 75 basis points has reached half.​​​Judging from the data, there is still a greater possibility that the Fed will not take the initiative to make the market more turbulent this week. At the same time, we can also take this opportunity to fully communicate with the market again.If the inflation data of next month still can't stop, then we will really start work in July.It should be noted that FedWatch data is changing, and there are still about 2 days before FOMC. You can pay close attention to the data situation. If the probability of 50 basis points is less than 70%, you should be careful.From the market point of view, panic seems to have begun to appear. S&P has fallen vertically in the past three trading days, and its weekly line is almost bald and not far from the low of 3800. The low point in May is technically crucial, and setting a new low every other month will mean that the market will start a new round of decline. Combined with other risky assets, such as the recent stormy ETH, the risk-off atmosphere has a "liquidation" intention.Last Friday, gold showed a trend of first suppressing and then rising, which was obviously stronger than silver. Many investors don't quite understand why gold will rise when the interest rate hike may be even greater.First of all, as far as inflation itself is concerned, it is a neutral factor for gold, and there is no clear positive and negative correlation between them in history. Secondly, on the issue of interest rates, there have been signs of decoupling between US bond yields and gold performance since the beginning of last year.Higher nominal/real interest rates are of course not conducive to interest-free asset gold in theory, but don't forget that gold still has a safe haven aura. When gold and US dollar index run in the same direction, gold will remain strong with high probability.At present, the price of gold still fluctuates in a relatively middle range, and last week's counterattack cannot declare that the bulls have won in an all-round way. It is expected that the market will try to build a rebound high point first, and then break again before confirming its strength. If the low level in May is broken down, we should change our thinking, and gold may turn to bear.Crude oil has also begun to show a correction in recent trading days, so it is still necessary to observe the performance of oil prices and US stocks. The rise in crude oil and the fall in US stocks mean that the economic crisis will follow; Crude oil pullback US stock rebound hints at revised respite time; Both of them run in the same direction, no matter whether they rise or fall, they are in line with the correlation of most times. In addition, considering the actual situation in the United States, if the oil price continues to be high, I believe they will take some actions/measures.$NQmain(NQmain)$   $YMmain(YMmain)$   $ESmain(ESmain)$   $GCmain(GCmain)$   $CLmain(CLmain)$
      41.28K1.06K
      Report
      The Fed will make a big move this week ,How will gold and oil change?
    • HONGHAO·03-08HONGHAO

      The War and the Oil Surge vs. A New World Monetary Order

      On March 4, BZ topped 115 as Russian forces gradually encircled southern cities of Ukraine. Crude oil traders rushed to cancel their short orders. A large number of short sellers have gathered in this price range. The withdrawal of these short orders and upcoming long orders are likely to lead to a further spike in oil prices. The U.S. announced 60 million barrels of crude oil will be released. But it only equals to 3-4 days of US consumption, and wartime is likely to consume more oil. With crude oil inventory data well below market forecasts, crude oil futures logically present a super-backwardation structure. It means that traders have no confidence in the short-term market supply balance. In fact, not only crude oil futures, but also other major commodity futures are starting to exhibit a similar structure. The proportion of commodity futures with super-backwardation structure is at one of the highest levels on record. Since last November, I have repeatedly highlighted the continued strength of crude oil and commodities. If anyone has any illusions about the current strength of crude oil and commodities -- it must be Fed officials. In 1973, Egypt, seeking to reclaim the Golan Heights and Sinai Peninsula lost in the Six Day War, raid Israel on the Yom Kippur holiday. After the holiday, the Israeli army asked US for help and defeated Egypt in an overwhelming battle. Nixon applied to Congress for financial assistance to Israel. However, Nixon deliberately delayed the application by a week, who aimed to buy time for Egypt. This, of course, was another move by the US to interfere with the geopolitical landscape: superficially, the US treated both countries fairy; but it laid the foundation for more conflicts later. Sure enough, Arab countries didn't buy it. The oil embargo resulted in oil prices soaring four times from $2-plus to more than $12, opening up a period of Great stagflation in the United States. By 1979, after the Iranian revolution, oil prices even doubled again, until Volcker took the responsibility and saved the economy. Currently, the dollar is appreciating, US Treasury yields are falling, and safe-haven asset prices are rising. All of this seems at odds with crude oil and commodity trends. Some Fed officials also argue on this basis that inflationary pressures will not persist. After all, no one buys bonds when there's inflation. If the bond market don’t worry about the inflation, let alone Fed. However, there is another perspective. After announcing sanctions against the Russian payment system, the US deliberately excluded energy from the sanctions, despite constantly stating that "Russian crude oil will not be an exception in the end". The bigger killer was the freezing of the Russian central bank's dollar reserve assets abroad and the ban on the Russian central bank providing liquidity to bail out sanctioned Russian banks. Yesterday, shares of SBER Bank, one of Russia's major banks, plunged to just a penny in London. Such dollar hegemonic sanctions have indeed hit the Russian financial system hard in the short term, but not without a backlash. The exclusion of Russia from the dollar payment system and the freezing of the Russian central bank's dollar assets are practical ways to show that dollar assets are not so-called "safe assets". Your assets are only safe if the US recognizes them. In the short term, such sanctions do force dollar-dependent countries, especially emerging countries, to seek for more dollar assets under this background. However, after recognizing this hegemonic rule of the dollar system, these countries may remain vigilant and start developing a payment system independent of the dollar. The continuous strengthening of the RMB is just like a mirror that shows the weakness of the dollar system. Historically, every oil crisis or oil price spike has invariably been followed by a recession in the US economy. Currently, this kind of surge in oil price is very rare. The last time we saw oil prices soar to such heights in such a short time was the 1973 oil crisis. The Bretton Woods system crashed down in the face of the oil crisis; a new global monetary system emerged. At one time, oil was priced in gold. After the Bretton Woods system went bust, Kissinger brought the world the petrodollar system that established the hegemony of the dollar. At that time, oil would be priced at over $400 a barrel if it were denominated in gold. Without the anchor of gold, the global monetary system is like a kite with a broken string, which can fly very high in a flash, but can also fall down in an instant. As oil soars epically, other assets are not immune. For the third time in more than three decades, German Treasuries fell by more than 20 points in a single day as Germany announced a massive increase in military spending. At the same time, the single-day implied volatility of Treasuries changed by a factor of five variance - or a probability of one in three and a half million, a theoretical one in 20,000 years. Readers who follow my research should know that the appearance of these epic price swings is no accident and hints that a new monetary system will shape. In fact, it is not impossible for countries that have been kicked out of the dollar system to return to gold. If Russia's currency were priced in gold instead of dollars, then the Russian ruble would probably be 20-30 instead of 120. One of the relatively certain outcomes we can expect from this war is that the turmoil in the crude oil market will continue in the short term. As it remains uncertain whether the scope of sanctions will include energy, financial institutions will be indecisive to open letters of credit to refining companies. This situation is bound to further contract oil supply in the short term. Some oil traders are already seeing $200 for oil prices. Currently, US Treasury real yields have plunged to the lowest. This scenario also happened in the oil crises of 1975 and 1980. Both of them led to US stagflation, recession, and double-dip in stock and bond markets. Many market analysts have never seen such a scene in their life. That said, every oil crisis or oil price spike has been accompanied by a reshaping of the monetary system: 1973, 1980 and 2008. This time should be no different. At one time, Arthur Burns, the Fed chairman before Volcker, argued exhaustively why monetary policy could not solve inflation caused by structural problems such as war, and deliberately excluded oil and food prices from the calculation of inflation. Ultimately, this economic sophistry, which was defiant in the face of a devastating economic cycle, made Fed miss a good opportunity to tighten monetary policy, which led directly to the subsequent Great Stagflation. But, it helped establish a dollar-centered monetary system. After all, Volcker showed how a central bank can double its benchmark interest rate to 20 percent during fierce inflation after credit money has abandoned gold. Volcker's move undoubtedly laid the groundwork for the subsequent credit and hegemony of the dollar, but the credit created by the pioneers has almost been lost by those who came after. The "Modern Monetary Theory" that was so popular last year argued that no matter how the Fed prints money, inflation is difficult to get up. The core of this theory is the continuation of the credit and the hegemony of dollar is alive and well. However, if the inflation is calculated according to the original inflation calculation method before the 1970s, the CPI in the U.S. is now 15%, not 7.5%. When considering the balance of both ends of the national balance sheet, and that the Fed's liabilities are the appreciation of Americans' assets, the "Modern Monetary Theory" fails to take into account that without credit, asset prices are only inflated. Printing money only adds another “zero” to the price of assets, but the value of cash flows generated by assets does not change. Macro changes are always silent and difficult to see, but eventually they come as a shock - like the melting of a glacier and the final avalanche. At this turning point, which currency will rule the world in the near future?
      43.31K1.12K
      Report
      The War and the Oil Surge vs. A New World Monetary Order
    • TigerObserver·08-22TigerObserver

      Weekly: Defensive Sector Leads The Market, Bear Rally Ended?!

      The major U.S. stock indexes were little changed through most of the week but ended with a decline on Friday, snapping a string of four consecutive weekly gains for the $S&P 500(.SPX)$ and the$NASDAQ(.IXIC)$. With the next U.S. Federal Reserve meeting just over a month away, investors worried about the pace of further interest-rate increases. As of last Friday, $DJIA(.DJI)$ YTD is -6%, $NASDAQ(.IXIC)$ YTD is -18.4%, $S&P 500(.SPX)$ YTD is -10.4%. $S&P/ASX 200(XJO.AU)$ &$Straits Times Index(STI.SI)$ in YTD performance is -4.9% & 4.06% respectively. Since bottoming out in mid-June, U.S. stocks have ushered in a rebound on expectations that the FED's aggressive interest rate hikes will help lower inflation. Subsequently, the decline in energy prices, the easing of supply chain bottlenecks, and the hope that prices have peaked to a certain extent alleviated the pressure on monetary policy. In addition, the upward revision of overall corporate profit expectations in the new earnings season further boosted market risk appetite.Earnings season is coming to an end, investors are turning their focus back to the economic outlook for further clues about future rate hikes. The Friday Jackson Hole annual meeting and the upcoming release of inflation and nonfarm payrolls data could spark a new round of shocks in the coming weeks.Macro Factors: Fed's Tough Task: Minutes released from last month's U.S. Federal Reserve meeting showed that policymakers agreed they needed to keep raising interest rates, although they expressed concerns about lifting borrowing costs too fast and unduly weakening the economy.Housing Market Slump: Sales of existing homes fell for the 6 consecutive month in July as a recent rise in mortgage rates continued to weigh on the U.S. housing market. Sales fell 5.9% versus the previous month and 20.2% relative to July 2021, according to the National Association of Realtors.Retail Flattens Out:There was virtually no change last month in U.S. retail sales, a segment of the economy that’s recently been holding up relatively well amid high inflation. The flat result for July was attributed largely to the recent decline in the price of gasoline; excluding gas and autos, retail and food sales rose 0.7% relative to the previous month.Currency Convergence :The year-to-date strengthening of the U.S. dollar relative to the euro has brought the value of the 2 currencies to a near-parity level. On Friday afternoon, the value of a single euro fell as low as $1.0035. The last time the two currencies reached parity was five weeks earlier during intraday trading; prior to that, the last time was in late 2002.Sectors Performances:In the past week, consumer staples and utilities were the two best-performing sectors of the S&P 500's 11 sectors. Defensive sector leads the way. Conversely, the two worst-performing sectors were materials and communications services, which are cyclical sectors.Last week, most sectors drop, with Communication Services drop 3.8% the most, then Basic Materials and Technology sector followed. Consumer Defensive see 1.29% increase , and utilities see 0.84% increased. Goldman Sachs pointed out that the cyclical sector led a bear market rally in U.S. stocks in July and early August, "however, as the defensive sector regained the lead, this wave of bear market rebound in U.S. stocks appears to have ended this week.""When cyclicals underperform defensives, investors get nervous," Goldman said. According to Goldman Sachs, the following signs are showing that the bear market rally in US stocks is about to end.Weekly Top Gainners of S&P 500:$Occidental(OXY)$$Coterra Energy Inc.(CTRA)$ , $Kroger(KR)$$Eli Lilly and(LLY)$$PG&E Corp(PCG)$$Devon(DVN)$$CDW Corp(CDW)$$Cisco(CSCO)$$Smucker's(SJM)$$Hasbro(HAS)$ .Other Markets:Yields Rebound: Expectations for further aggressive moves to raise U.S. interest rates fueled a decline in government bond prices, sending yields to the highest level in nearly a month. The yield of the 10-year U.S. Treasury bond rose to about 2.98% on Friday, up from 2.85% at the close of the previous week.Rising Euro Inflation: Inflation in the 19 countries that use the euro rose at an annual 8.9% rate last month, the highest level since the currency was created in 1999. A separate report from the United Kingdom showed that inflation there rose to 10.1%ꟷthe fastest pace since 1982. By comparison, the latest monthly U.S. inflation reading was 8.5%.Gold Still Under Pressure: $Gold - main 2212(GCmain)$ has just refreshed a three-week low, and with the precious metal falling 3% last week, Wall Street is taking a negative view on gold prices this week due to a stronger dollar and pressure from the upcoming Jackson Hole central bank annual meeting.Oil fluctuated around $90: Oil future prices fell last week, weighed down by a stronger dollar and concerns that a slowing economy would dent crude demand; Iran nuclear talks await whether the U.S. can comply with Iran’s “red line.” This week will be held in Jackson Hole annual meeting of global central bankers, also need to pay attention to the speech of the chairman of the Federal Reserve.The Week Ahead: August 22-26Notable Earnings: $Zoom(ZM)$ ,$Palo Alto Networks(PANW)$ ,$Macy's(M)$ ,$Intuit(INTU)$ ,$Nordstrom(JWN)$ ,$Petco Health and Wellness Company, Inc.(WOOF)$ ,$NVIDIA Corp(NVDA)$ ,$Salesforce.com(CRM)$$Grab Holdings(GRAB)$ ,$Dell Technologies Inc.(DELL)$ ,$VMware(VMW)$ ,$Dollar General(DG)$ ,$Dollar Tree(DLTR)$ .MondayNo major reports scheduledTuesdayNew home sales, U.S. Census BureauWednesdayDurable goods orders, U.S. Census BureauPending home sales, National Association of RealtorsThursdaySecond-quarter GDP, second estimate, U.S. Bureau of Economic AnalysisWeekly unemployment claims, U.S. Department of LaborFridayPersonal Consumption Expenditure Price Index, U.S. Bureau of Economic AnalysisUniversity of Michigan Index of Consumer SentimentPersonal income and consumer spending, U.S. Bureau of Economic AnalysisWhat's your understanding of this market? any great strategy, please join to discuss.
      33.06K853
      Report
      Weekly: Defensive Sector Leads The Market, Bear Rally Ended?!
    • TechnicalMaster·09-16TechnicalMaster

      Bear Market Has Entered its Final Stage?Take Chances Please

      Do your know the Five stages of Grief of bear market?As of market close on Thursday,$S&P 500(.SPX)$ ,$NASDAQ(.IXIC)$$DJIA(.DJI)$ 's YTD are -18.66%, -27.04%, -15.37% respectively.The market are digest the probabilty of FED's rate hike in 100bps, although the consensus of forcast still at 75bps rise in September 21st.Citi's U.S. economist's base rorcast is a 75 bps hike, but he noted 100 bps is also a possibility.Bank of America U.S. economist also expect a 75bps rate hike this month. He also predicted that the updated forecast would point to an increased risk of a hard landing.The talk of a hawk-to-dove Fed policy has also died down, and Wall Street strategists also believe the bear market will be more difficult to defuse.Tech stocks fell sharply on Thursday, led by technology stocks, and some traders believes that the bear market has entered its final stage.Cited from one Hedge Fund Trader i've know, He said, often the end of a bear market is a continuous heavy-volume slump of the giants stocks. On Thursday, $Direxion Daily Technology Bull 3X Shares(TECL)$ led the decline. This scene is actually relatively rare for many months, it is almost the last round of wave of every long bear trend. Institutions always want cheaper chips, and depressed sentiment is a mirror image of the middle (bottom) of big swings. When everyone in the market bet the bear of market, which has been last for many months, such as now, then the coming bottom will be the starting point of a big round of gains.According to this veteran trader friend, is the current bear market really in its final stages?The market psychology of bear markets generally follows a five stages similar to what psychologists call grief - denial, anger, bargaining, frustration, and acceptance--by Elisabeth Kubler-Ross in her 1969 model for coping with terminal illness.Here's how they fare in the stock market:Denial: At this initial stage, the prevailing view is that stock market weakness is nothing more than a buying opportunity. Far from being angry (see next phase), investors are rather optimistic, as the market correction provides an opportunity to buy stocks at a cheaper price than if the bull market continued.Anger: Denial is getting harder to sustain as the market correction becomes too severe. Investor sentiment eventually turned into anger, who complained about the unfairness of the pullback. A hallmark of this stage is when investors view pullbacks as a personal insult -- as if the market cares if you or I lose money.Bargaining: At this stage, investors redirect their energies to figuring out if they can maintain their lifestyle while their portfolios take a hit; retirees recalibrate their financial plans. Investors promise to forgo luxury cars or European vacations -- the fat in their budgets -- as long as they don't need to cut spending.Depression: As the market continues to slide, people realize that spending cuts aren't enough. There will be major changes in lifestyle. Close to retirees working longer than originally planned; retirees returning to work.Acceptance: In the final stage, investors throw in the towel. They surrendered to the bear market and stopped even imagining when it would end. They see any sign of a stronger market as a "fool's rally," enticing the gullible to lose more money on the next dip.According to the above five psychology, how do you feel? Macroscopically, under the macro factors of the Fed raising interest rates, the strong global harvest of the US dollar, the geopolitical crisis, the energy crisis, and the repeated epidemics dragging down the economy, the pessimism in the stock market does not seem to have dissipated.However,Winston Churchill was working to form the United Nations after WWII, he famously said, “Never let a good crisis go to waste”.Investor Warren Buffett once said that I was born in a bear market. Know that Buffett's performance in a bear market can be described as perfect.During the first oil crisis in 1973, the S&P 500 index fell 13%, and Buffett achieved a positive return of 5%; in 1974, the S&P 500 continued to fall by 20%, while Buffett achieved a positive return of 6%; During the second oil crisis, the S&P 500 index fell 8%, and Buffett achieved 32% performance; in 1981, Paul Volcker took "shock therapy" to suppress inflation, raising interest rates rapidly by nearly 10%, the S&P 500 fell 7%, Buffett The yield was 31.8%, outperforming the broader market by 38.8%.Before and after the financial crisis in 2008, Buffett increased his assets in industries such as industry, energy, health care, and optional consumption. It was also at this opportunity that Buffett made further adjustments and improvements to the degree of diversification and anti-risk capabilities of the portfolio.There are actually ways for investors to make money in a falling market: for example, buying put options, or buying bearish ETFs, etc.Recommend to Read:Prepare to Hedge The Market Crash? Check These 4 StrategiesSPX Outlook & All Tickers/ETFs to Hedge the Down Market
      31.47K551
      Report
      Bear Market Has Entered its Final Stage?Take Chances Please
    • Capital_Insights·09-20Capital_Insights

      6 Risks in September: Expecting a Bear Rebound May be Disappointed

      Hawkish rate hike storm, Davis double kill, high inflation, economic recession, repurchase flameout, pension fund sales, quantitative to short... U.S. stocks are still not good, agencies warn that even if there is a small bear market rebound, and don't hold your hopes up.Below are some of the factors that still affect the development of US stocks:1. Hawkish Fed's Rate HikesThe market expects that the Fed will raise interest rates by 75 bps on Wendesday, also the expectation of raising by 100 bps has also increased.  Meanwhile, the expectation on next two interest rate meetings this year will maintain the pace of rapid interest rate hikes.Goldman Sachs’ forecast is more aggressive.The bank raised its final interest rate forecast by the end of 2022 to a range of 4%-4.25%. Specifically, the interest rate will be raised by 75 bps in September and 50 basis points in November and December.According to the latest survey of economists released by the media, most economists expect the ceiling of the federal funds rate to hit 4% by the end of 2022, to maintain this position in 2023, and to cut interest rates in early 2024.You may know that raising interest rates will cause asset prices to fall, but don't understand the process clearly. The impact of interest rate hikes is mainly divided into two parts, namely valuation and performance, also known as Davis Double Play.The first play is that the rise in interest rates will lead to the revaluation of assets, the stock price-earnings ratio will drop sharply, and the fall in asset prices often occurs in an instant (usually within a month);The second play is the decline of the macro economy and business operations. This kind of market generally has a long cycle and will be accompanied by large fluctuations in asset prices (not necessarily falling). For like the central bank's interest rate hike will first pass on the deposit and loan interest rates of commercial banks, and then affect commercial activities and consumption habits.Davis’s financial life had three phases: learn, earn, and return. The learn phase lasted into his early forties, and the earn phase stretched from his forties into his late seventies. At that point, he tackled the return phase.” Return phase = philanthropy. Davis died in 1994 leaving $900 million to personal cause.www.amazon.comOn Monday's trading, the US 30-year mortgage rate soared to 6%, the highest since November 2008. The dollar was unchanged after the news, but all asset prices fell. This shows that the rise in risk-free interest rates is gradually eroding the real demand for assets.2. High Inflation and RecessionLast week, the economic barometer $FedEx(FDX)$ issued a profit warning, the CEO even directly warned that "we are entering a global recession, and the company data is not a good omen."Global inflation is highThe Monetary Authority of Singapore said that in the medium term, global inflation is likely to remain at higher levels for longer than the low levels of benign inflation seen over the past decade.The U.S. CPI data rose more than expected in August and the number of initial jobless claims released a signal that inflation was entrenched, reinforcing the importance of accelerating interest rate hikes.Overall, high inflation and economic recession are still the main factors under pressure on US stocks. At present, the actual interest rate hike action has not been fully transmitted to the demand side, and reducing inflation not only depends on the strength of interest rate hikes, but also takes time to ferment.Bank of America's global fund manager survey for September shows fund managers believes recession is likely has increased further in September to 68%, the highest since May '20 ,and 79% of the global fund manager survey participants see slower inflation over the next 12 months than today, hinting that inflation may have peaked last month.Goldman Sachs also sharply lowered its GDP growth rate forecast for the U.S. economy this year to 0 from 4% a year ago, and lowering its economic forecast for next year to 1.1% from an earlier 1.5%.3. Companies Buyback StalledThis week, repurchase, an important engine of U.S. stocks, stalled. Beginning last Friday, 50% of S&P 500 listed companies entered a silent period for repurchase for one month. During the period of silence, Goldman's repurchase unit has turned back to its usual busy state, with the 10b-5.1 program kicking in, reducing average daily trading volume by 30-35%, or about 0.7 times the average daily volume in 2021. The slowdown is crucial and means stocks could be even worse.https://www.zerohedge.com/, BY TYLER DURDEN4. Month-end and Quarter-end Rebalancing of Pensions FundsAccording to Goldman Sachs calculations, there will be more selling pressure by the end of September - pension fund monthly and quarter-end rebalancing.Goldman Sachs models estimate that pensions could sell $18 billion in equities. From the perspective of the past three years, in terms of absolute dollar value, the $18 billion sell-off ranked 58th; in terms of net value, the $18 billion sell-off ranked 33rd, and the scale is not small.While Last two weeks of quarter could see rally due topension fundrebalancing in a similar manner to March and June. This is counter to strong seasonal tendencies and up to 84 billion dollars of debt securities maturing on Fed's balance sheet in last two weeks.5. CTA Strategy funds May Turn to ShortEarlier, UBS strategist Nicolas Le Roux pointed out that CTA will turn bearish again in September, and recently US stocks may face some selling pressure from CTA in the next two weeks.JPMorgan analyst John Schlegel said, if the economy ends up heading for a recession, U.S. stocks could even fall below their mid-June lows, at which point the CTA strategy fund could be shorting stocks further.Goldman Sachs expects to buy $7.7 billion in stocks in the coming week and reduce its holdings of $614 million in the next month as the stock market rebounds.https://www.zerohedge.com/, BY TYLER DURDEN6. Fund's Cash Balance A 20 Years HighAnother statistic to watch is that fund managers have now raised their cash balances to 6.1%, the highest level in 20 years. Rising interest rates have made cash investing equally attractive, both positive and negative.Bank of America's global fund manager survey for September shows sentiment among money managers is 'super-bearish'. ET takes a look at the key highlights of the brokerage's survey based on responses from 212 participants with $616 billion in assets under management (AUM). The findings reflect the mood among global fund managers.Fund managers' average cash balance has risen to 6.1% in September - the highest since October 2001 after the 9/11 shock, and well above the long-term average of 4.8% as recession concerns rise, the survey said.The bad news doesn't stop there, US stocks are hardly optimistic this week, and Goldman Sachs warned that anyone expecting a "bear market rebound" may be disappointed.$S&P 500(.SPX)$$SPDR S&P 500 ETF Trust(SPY)$ ,$ProShares Short QQQ(PSQ)$ ,$NASDAQ(.IXIC)$ ,$Nasdaq100 Bear 3X ETF(SQQQ)$ ,$iShares Russell 2000 ETF(IWM)$ ,$DJIA(.DJI)$ ,$Dow30 Bear 3X ETF(SDOW)$Want to join other topics as well to win more coins? [Markets Related]:Fed Meeting(21 Sept): 75bps rate hike, or 100bps?
      27.90K207
      Report
      6 Risks in September: Expecting a Bear Rebound May be Disappointed
    • Capital_Insights·06-10Capital_Insights

      Growth Stocks Outperform Value Stocks? Data & Analyst Tell You Why

      This article gonna explain why the well-recognized indices and analysts believe the growth stocks will outperform the value stocks.According to MSCI indices, Quality & Growth investing will continue to outperform Value. Let's look at the three types MSCI indices.Before we start, we need to know what MSCI World Index is: The MSCI World Index captures large and mid-cap representation across 23 Developed Markets (DM) countries. With 1,540 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country.1. The MSCI World Growth Index It captures large and mid cap securities exhibiting overall growth style characteristics across 23 Developed Markets (DM) countries. Five variables are considered: long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate and long-term historical EPS growth trend and long-term historical sales per share growth trend. From this chart, we can tell that the growth companies outperform the broader market.2. The MSCI World Quality IndexThe index aims to capture the performance of quality growth stocks by identifying stocks with high quality scores based on three main fundamental variables: high return on equity (ROE), stable year-over-year earnings growth and low financial leverage.The quality stocks perform way better than the broader market in the past decade.3. The MSCI World Value Index It captures large and mid cap securities exhibiting overall value style characteristics across 23 Developed Markets (DM) countries.The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield.Among the three indices, only the value stocks underperform the MSCI world index.From this trend, we can detect the growth and quality stocks will continue to outperform the broader market in the future.Analysts are also positive on the growth stocks for 2 reasons1. fundamentalsCompared to value stocks, growth stocks have a weaker correlation with short-term fundamentals. Long-term fundamentals have a greater impact on growth stocks, such as industry trends, industry growth, and the competitive landscape of companies. After the pandemic, the slope of economic recovery is the core concern of the market. Growth stocks have a lower requirement for the slope of recovery, and as long as the pandemic and market sentiment recover, growth stocks will likely rise. However, the rebound of value stocks has higher requirements on the slope of economic recovery, policy implementation and effect.2. liquidityGrowth stocks are more sensitive to the liquidity environment. Overseas liquidity uncertainty is being removed. The implied rate hike expectations for the year in FFR futures has fallen back since May, and US Treasuries have fallen from a high of 3.2%. We think the Fed may slow down the pace of rate hikes in Q3 and stop raising rates in Q4. If we look at the six-month dimension, both rate hike and U.S. Treasury rates are falling back.A major reversal in growth stocks may be startingBoth fundamentals and improved liquidity are more favorable to growth stocks, so the certainty of growth stocks rising is higher. Once market sentiment improves, a rally in growth stocks could open up a major trend reversal.However, there are more influencing factors that restrict the rise of value stocks. In the short and medium term, it may continue the oscillating pattern, and may still need to wait for the opportunity of reversal.ConclusionMaybe it is counter-intuitive, growth stocks are still good choice in this market. But we shouldn't put all eggs in the growth basket. Rather, we can focus more on growth and quality stocks, and also buy some value stocks to hedge risks. $S&P 500(.SPX)$ $NASDAQ(.IXIC)$ $Coca-Cola(KO)$
      37.71K1.11K
      Report
      Growth Stocks Outperform Value Stocks? Data & Analyst Tell You Why
    • HONGHAO·03-22HONGHAO

      An Oversold Reprieve: How Far will it Go?

      “When all the dreams drain, same are loss and gain.” – The Romance of Three KingdomsKey Points- Hong Kong’s selloff and reversal last week were epic, but onshore less so.- Short sellers onshore are wrongfully blamed, as they have been cutting positions. Net long on margin peaked with the onshore market around mid 2021, and had since entered a deleveraging phase. It will still weigh on indices.- An onshore leverage cycle is typically ~3 years, consistent with the wavelength of 3 to 4 years in our theory of China’s economic cycle.- On October 20, 2018, there was a meeting at the Committee of Financial stability and Development. The onshore market eventually bottomed out in early January 2019. It will take more than a meeting and a phone call to end this bear. A second low is likely. But such likelihood is less perceptible now, as the market gets swayed by the near-term momentum.- Our trading range forecast of the Shanghai Composite continues to holdbetween slightly below 3,200 and slightly below 3,800, with the worst scenario being just below 3,000. We will continue to adjust our risk appetite according to the composite’s position within this range.One of the Most Oversold MarketsLast week was epic. The change of index points in the past twenty days ranked among the second steepest in more than four decades, together with October 28, 1997, during the Asian Crisis, and March 20, 2020, during the pandemic. The worst twenty-day selloff occurred two weeks preceding October 27, 2008, at the depth of the global financial crisis (Figure 1).The selloff and its dramatic reversal came at such speed that it stunned many young traders and analysts in the market. For those of us, who started covering markets since the Asian Crisis twenty five years ago, the epic volatility had spurred an innate crisis reflex attained after decades of market watching. In our report titled “The Ides of March”on Monday, March 14, we warned of the impending plunge. Then in our pre-market report titled “Another Technical Reprieve: Who Is Still Sellling?” on Wednesday, March 16, we presaged the epic short squeeze. After emerging from the vortex of trading fury, we must pause to ask why, and where to from here.The Russian-Ukraine conflict is still raging on. And the stance of a US-led alliance is toughening. Russia is confronted by significant resources constraints and reported flagging morale. As the U.S. keeps warning of the possibility of World War III should the war drag on, all eyes are on China, an important balancing piece in this War.Within China, opinions are split, and the debates are intense. But one can probably draw wisdom from one of China’s ancient classics “the Romance of Three Kingdoms” to understand the strategic dynamics between the US, Russia, and China. In the novel, the second and third most powerful kingdoms (the Kingdom of “Su” and “Wu”) at times joined forces to resist the dominant kingdom. At times, Su and Wu bickered with each other to maintain boundaries and balance of power, while separately growing their own military power to prepare to challenge the dominant kingdom to unite China.It is a fascinating classic full of strategies, games, and wisdoms. I could go on if this were not a market strategy piece. For Chinese well versed in this novel, the current delicate balance in the battlefield can be appreciated.Figure 1: All major China indices are oversold, close to their historical extremesSource: Bloomberg, BOCOM Int’lAs Russian central bank’s forex reserve overseas was sanctioned by the US soon after the war broke out, all US rivalries must have started to ponder the safety of their USD assets. If the USD system can be weaponized, a small and open economy such as Hong Kong that is also an important financing channel for many Chinese companies must have apprehensions about being cut off. No wonder, the short-selling interest and the put volume ratio in the Hong Kong market had been at their records (please refer to “Another Technical Reprieve: Who is Still Selling?” on 2022-03-16). After the sanctions on Russia, Hong Kong appears even more strategically important for China in the overall grand schema.The Important Meetingon 16 MarchThe onshore market had also sustained substantial volatility this week, albeit to a much lesser extent when compared with the Hong Kong market. While the Shanghai Composite plunged over 4% in one day during last Tuesday’s trading, the point loss over the past twenty days was not uncommon in the past twenty years.After lunch break on Wednesday, Xinhua announced that vice premier Liu He chaired a work meeting at the Committee of Financial Stability and Development. During the meeting, vice premier Liu addressed many market’s concerns, most notably the US-listed Chinese companies versus the HFCAA, the support for the platform companies, and the reform of the property sector, as well as monetary and fiscal policies. He also mentioned that China had been working closely with the SEC and the HKEx regarding the US-listed Chinese companies, and had been making progress.The market immediately jolted into action. Interestingly, the Shanghai Composite initiated its rebound at 3,023, a touch below its secular trend line of 850-day moving average at 3,160 on Wednesday. From trough to peak, the Shanghai Composite recovered almost 8% in three days. And there were whispers about some hedge funds engaged in short selling had been targeted. A quick search of Soro’s books, the infamous manager who made a fortune during the financial crisis, returned no results from many of China’s online bookstores. It is odd, as Soros is worshipped by many Chinese traders as the “God of Trading”, same as the underground triads worship General Guan Yu, one of the main characters in the Romance of Three Kingdoms. Anecdotes such as this invoke the memories of the summer of 2015, when short sellers were rounded up to save the market.Yet our data analysis suggest that the short sellers have been in retreat – since mid 2021 indeed (Figure 2). Meanwhile, China’s USD junk bond continues to plunge, together with the short positions outstanding in the onshore market. That is, short selling is not the instigator of this selloff. While the market recovery since Wednesday has been impressive, it has a different cause from what is being understood by the market.Figure 2: On-shore short selling has been retreating since last year, together with USD junk bondsSource: Bloomberg, BOCOM Int’lPeaked Cycle andWaning ConfidenceWe believe leveraged traders are the smarter money in the onshore market. At least, they are confident and committed. By studying their trading behaviors, we will get a glimpse into market confidence, and gauge the future direction of the onshore market.Our data analysis shows that net buying activities in the Shenzhen Stock Exchange has peaked around mid 2021, and has been declining since. We note that the net buying activities peaked at the same level seen during the summer of 2015 – just before the stock market bubble burst. And the Shenzhen Composite has been falling in tandem (Figure 3, upper panel). We have found similar patterns in the Shanghai Stock Exchange (Figure 3, bottom panel).Figure 3: Shenzhen/Shanghai net long on margin has peaked for the current cycleSource: Bloomberg, BOCOM Int’lFurther, we have found a 3-year cycle in the margin trading activities in China, roughly consistent with the wavelength of our theory of China’s economic short cycle of between every three and four years. It seems that on a six-year cycle consisting of two sub-cycles of three years, the first three years are the period of substantial leveraging up then deleveraging down in margin trading, then followed by another three years of steadier margin accumulation – before the eventual violent deleveraging process, such as early 2016 and the entire 2018. Right now, it seems that the deleveraging process is continuing. If the most confidence and the smartest money is retreating, the onshore market will likely feel the pinch.The unwinding of leveraged positions is a sign of waning confidence. It is not atypical at the end of the cycle. Indeed, such deleveraging trades will magnify the volatility that tends to be concurrent with the cycle’s end. It is just a usual part of the market cycle, and it will come and go – like the turn of the seasons.In our 2022 outlook, we outlined our macro framework this year by examining China’s external-related macro accounts to gauge the change in dynamics between China and the rest of the world, most notably the US. We believe that exports and the current account surplus, as well as the forex deposits in China’s commercial banks have been an important source of liquidity to sustain the performance of the onshore market.As 2022 progresses, we find that the strength of Chinese exports is starting to wane (Figure 4). This should not have come as a surprise. As the western world gradually achieves crowd immunity, production capacity is recovering and the dependency on Chinese exports is lessened. Based on this macro framework, we have been a near lone cautious voice on the onshore market. Meanwhile, Hong Kong’s export growth continued its slide for a third quarter, and Chinese exports will slow in tandem (Figure 4).Figure 4: China mainland and HK’s exports will continue to slow; US cycle peakedSource: Bloomberg, BOCOM Int’lAt the end of the cycle, all growth assets tend to be affected. For instance, CATL, China’s biggest new energy play, finds itself closely correlated with the NDX, the biggest 100 tech companies in the US Nasdaq (Figure 5). It is not a coincidence. After this technical reprieve, investors will once again focus on decelerating fundamentals typically featured at the end of the cycle.Figure 5: CATL vs. NDX – both growth assets at the end of the cycleSource: Bloomberg, BOCOM Int’lConclusionLast week’s technical reprieve in offshore markets was epic, but onshore less so, as suggested by points loss over the preceding twenty days before the market rebound. Onshore, short sellers were wrongfully blamed for the selloff. Indeed, they have been retreating since mid 2021, in tandem with plunging USD Chinese junk bonds.While Wednesday’s important meeting has addressed many market’s concerns, China does not have much sway in the outcome of the negotiation with SEC. For the past ten firms named by the SEC under the HFCAA, all had handed over the audit drafts -- with China’s approval. While Hong Kong is a natural market for the return of Chinese ADRs, Hong Kong is much less liquid than New York. Upon returning, the ADRs will suffer a liquidity discount, and will likely be roiled by the change of investor base. The sheer volume of the ADRs’ return will likely overwhelm HKEx. Of course, a special gateway can be open in the HKEx for these best-of-breeds Chinese firms to return home.The net long on margin in the onshore market has peaked for the cycle in tandem with the onshore indices, and deleveraging appears to be in progress. The pressure on the onshore market cannot be easily dissipated by one meeting or a phone call, as important as these communications are. On October 20, 2018, during the depth of the trade war and as the US market plunging into its worst Christmas since the Great Depression, the Financial Stability and Development Committee had a similar meeting, too. But the onshore market eventually bottomed out in early January 2019. We continue to believe a second low is likely -- if history is a guide. But such likelihood will not be immediately apparent, as the market gets swayed by near-term momentum.In our 2022 outlook published last November, we forecasted the trading range for the Shanghai Composite to bebetween slightly below 3,200 and slightly below 3,800, and the worst scenario to be just below 3,000(“Outlook 2022: Shadow Fed Tightening”, 2021-11-15). Last week’s selloff almost got us to 3,000. Our forecast range continues to hold, and we continue to adjust our risk appetite according to the composite’s position within our forecasted trading range.
      35.24K1.01K
      Report
      An Oversold Reprieve: How Far will it Go?
    • HONGHAO·03-16HONGHAO

      Six Charts Showing You The Ides of March

      Key Points- Selling in Hong Kong at one of its worst. Indiscriminate selling by institutional and individual investors. Pessimism will take time to dissipate, the Hang Seng will take time to bottom. Fleeting technical rebound will be difficult to trade.- Onshore market is no better. Foreign investors are reducing Chinese treasury. Onshore funds’ equity allocation uncomfortably high, and inconsistent with COVID resurgence, potential US sanctions and disappointing February credit growth. Be aware of contagion. The PBoC will act accordingly.- BUT forward points on the HKD suggest long-term confidence. Difficult case against HFCAA means accelerated return of US listed Chinese stocks. It will drain liquidity in Hong Kong near term, but China’s finest will eventually prove well worth it.February monetary stats onlyhalf of expectation.Last Friday’s trading was memorable. But it was not only because of the Shanghai Composite’s (SHCOMP) V-shaped reversal intraday, and continued bounce from its 850-day moving average. Just a few hours before China’s monetary statistics were due for release in the afternoon trading, the China treasury bond futures surged suddenly. This late-day surge in both bonds and stocks left many experienced traders scratching their heads.Later, at only half of the consensus expectation, China’s monetary stats for February proved to be very disappointing. Private long-term loan growth, a.k.a. mortgage, was negative for the first time in well over a decade. Of course, economists blamed the lunar new year as expected. But the market’s hope for aggressive easing must have been dashed, after cheering for the “historic” monetary stats in January.Such weak credit growth helped explain why the sudden surge in both bonds and stocks – bonds thought the economic slowdown will continue, yet stocks continued to bet on looming monetary easing. But neither could explain the mysterious surge BEFORE the release. And when it comes to predicting the future, bonds tend to be right more often than stocks.As mortgage growth decelerated dramatically, super-luxury apartments in Shanghai were flying off the shelves. A record RMB350,000 per square meter sales was reported, together with a flurry of apartment sales with total price tags from at least RMB30m to well over RMB50m or more. These are extra sour grapes, especially when the “Twin Sessions” didn’t mention “common prosperity”. These apartment sales did not need mortgage – they were all settled in cash.It is a wild menagerie.Confidence on Hong Konghas notwaned.At this juncture when the SHCOMP made its first attempt to bounce off its 850-day moving average, an important secular trend line, the bottom of the Hang Seng Index fell out. The Hang Seng failed to find support on its 17-year secular trend line, despite showing deep allocation value since Christmas and being the best-performing major index globally (Please refer to our reports titled “This Christmas, Hong Kong in Deep Value” on 2021-12-23 and “Hong Kong at Secular Inflection Point” on 2022-01-24 for more detailed discussions). We note that the secular trend line is neither support nor resistance level, but rather the underlying secular trend of an index. The addition to five more US-listed Chinese firms to the SEC watchlist according to the HFCAA did not help. The US-listed Chinese firms endured another bloody selloff on Friday in New York trading.And traders are wondering what next for these US-listed Chinese firms. Even though these firms have at most till 2024 to comply with the SEC rules and hand over their audit draft for SEC’s perusal, the accelerated HFCAA can dramatically reduce this grace period to two years or less. The HKEx has been preparing for their return to Hong Kong, the offshore Chinese market. But the HKEx has already been overwhelmed by hundreds of A1 filings. And too many IPOs will drain the liquidity in Hong Kong. 2021 is a good example.There will be no easy way out. As a leading China investment banker who had helped listing some of the biggest Chinese internet platform companies lamented during our chat, “the Chinese internet space had become uninvestable, everyone wants out”. Another fund manager who managed one of the largest China equity funds also jibed, “confidence is all but lost”.Confidence is hard to come by and difficult to quantify, but we will give it a try any way. We look at the change in forward points in the Hong Kong Dollar (HKD,Figure 1). Surprisingly, despite rife pessimism, the change in forward points in the HKD is more consistent with times with higher confidence about Hong Kong’s future, such as 2007 and 2017, not with the periods of 2005, early 2016 and early 2020 when confidence was low. Historically, the forwards points paid on the HKD are closely correlated with the return of the Hang Seng. Yet, right now, the Hang Seng has absolutely tanked, but confidence in Hong Kong’s future has not waned.Figure 1: Confidence in HK as suggested by HKD forward points has not waned, but diverged from the Hang SengSource: Bloomberg, BOCOM Int’lWho is buying? Foreigners reducingChinese Treasury.So who is still buying in depressing times like these? We look at cross-asset and cross-ownership holdings to gauge the penchant to buy or sell Chinese assets. Firstly, we examine the change in foreign holdings of the Chinese treasury. Our data show that foreign investors have been slowing their purchase of the Chinese treasury since early 2021, and this February they turned into outright outflow. Indeed, the outflow of US$35bn in February from the Chinese treasury is the largest single-month outflow we have since data history.It could be due to the Russian central bank selling some of its Chinese treasury holding to raise cash, as its foreign reserve is frozen by the US. But there must be some repatriation flows as well, as some leading international investment banks have cut their ratings of Chinese treasury and advised clients to reduce holdings.Importantly, bond investors are smart money. Historically, our data analysis shows that the change in foreign holding of Chinese treasury led foreign buying of onshore stocks and their return by up to about nine months (Figure 2). As such, when foreigners are reducing their Chinese treasury holdings, investors in onshore stocks must take note, as volatility will spill over from treasury to stocks.Further, we must be mindful of the consequent pressure on the RMB, as foreigners exit. The potential contagion effect could weaken the RMB suddenly, and induce capital flight. Right now, we are still seeing orderly depreciation of the RMB. The scenario of capital flight is a risk scenario in a market where cross-border capital flows are still monitored.Figure 2: Foreign buying of Chinese treasury bonds slowing, portending slowing offshore buying and dwindling return of A sharesSource: Bloomberg, BOCOM Int’lWho is buying? Selling in on/offshorestock markets.Taking the lead from the foreign investors in Chinese treasury bonds, both on- and off-shore stock markets saw intense selling.In Hong Kong, we are seeing the net buying activities in the market plunge to its lowest in history, and stuck there for months now (Figure 3). Meanwhile, our bottom-up aggregation suggests that, on the stock level, both institutional and individual investors have been dumping Hong Kong stocks (Figure 4). Even though the net-buying activities have been at the record low for months now, this tends to lead the eventual bottom in the Hang Seng by three months or more.Figure 3: Buying in Hong Kong and daily sentiment plunged to one of its worst in more than a decadeSource: Bloomberg, BOCOM Int’lAnd the indiscriminate selling by both institutions and individuals suggests that prevalent pessimism in Hong Kong. Such pessimism tends to ferment at some of the most difficult periods for Hong Kong, such as 2012, second half of 2015 to early 2016, as well as early 2020 (Figure 4). As such, even though the bottom has fallen out of the Hang Seng, it would still be rash to catch the falling knives in the near term. But we are sure long-term investors must have begun to appreciate the long-term value in Hong Kong, as suggested by the HKD forward points.Figure 4: Both institutional and private investors are dumping Hong Kong stocksSource: FactSet, BOCOM Int’lThe onshore market is a similar story. Net buying activity has precipitated into one of its lowest on record (Figure 5). However, we caution against using this measure as a market timing indicator for bottom fishing. Historically, it coincided with some of the lowest points in the SHCOMP, but not all. And its recent track record since 2016 has been blemished.Figure 5: Buying of onshore stocks collapsing, but not yet seen its worstSource: Bloomberg, BOCOM Int’lInstead, the equity allocation in the onshore aggressive allocation funds stays elevated at still above 80% (Figure 6). These funds raised their equity exposure in late 2021, and only reduced slightly their risk exposure despite the recent volatile market. In our 2022 outlook “The Shadow Fed Tightening” published on 2021-11-15, we highlighted that fund managers were inappropriately positioning for the end of the cycle and loaded their portfolios with risks. Such excess risky disposition will likely take some more time to unwind.Figure 6: Onshore investors’ stock allocation in their portfolio is still elevatedSource: Wind, BOCOM Int’lConclusionForeign investors are reducing their holdings of Chinese treasury at its fastest speed on record. Such treasury portfolio reduction tends to lead on/offshore stock buying activities and onshore stock return by around three quarters. Bonds are smart money.Selling in Hong Kong is intense, and is at one of its worst on record. Both institutional and individual investors are dumping Hong Kong stocks. Such pessimism tends to ferment during some of Hong Kong’s darkest hours, and stocks, while capitulating, will still need time to heal. It would be rash to bottom fish in Hong Kong, but long-term investors must have begun to appreciate the long-term value of Hong Kong stocks. The forward points in HKD suggest so.Net buying in the onshore market is at one of its worst on record as well. But its track record as a market timing indicator is patchy, especially in recent years. Meanwhile, onshore aggressive funds still have very high stock allocation of over 80% of their portfolios, and have only reduced slightly during recent market jolts. Such high equity exposure is not consistent with market capitulation. Our trading range forecast for the SHCOMP published last November was between just below 3,200 and just below 3,800, with the worst case being just below 3,000 should everything go south.Russian central bank’s reduction of the Chinese treasury can have contagion effects on assets such as the RMB, and induce capital flight if not managed carefully. Chinese companies with Russian business connection can be affected by the US sanctions, although the extent is still unclear. While the PBoC will likely step up its easing efforts, COVID is resurging, too.Be aware of the ides of March.
      35.26K966
      Report
      Six Charts Showing You The Ides of March
    • TechnicalMaster·06-22TechnicalMaster

      Market Still in Extremely Fear: 10 Indicators to Check Bottom Reverse

      Wednesday's rise of US stocks seemed to make people forget the suffering of the bear market. $DJIA(.DJI)$ ,$NASDAQ(.IXIC)$ ,$S&P 500(.SPX)$.Various indexes rose, with clean green energy ranking the first rise for 3,52%.Meanwhile, the CBOE Volatility Index VIX also rose 3.51% to 31.According to the CNN' Fear and Greed Index, the current market sentiment is Extreme Fear.This may indicates that the market is still very pessimistic, and the US stock market seems to have not hit the bottom under the expectation of depression and inflation.Yesterday, I shared two indicators to confirm a bottom: 2 Ways to Confirm a Market Bottom & 3 Levels to BuyToday, I want share Oppenheimer's technical analysis team‘s tracking of 10 bottom indicators and which found that the stock market is close to 70% of its bottom.Analyst ARI Wald said: "in our stock market bottom checing list, 7 of the 10 indicators have met the preset values, but these values are not as extreme as in 2009 or 2020."There are still 3 indicators that fail to reach the preset values, namely, 1) the duration from peak to bottom, 2)the 52 week net high of the New York Stock Exchange, and 3) the 10 day average put / call option ratio . See the following chart for details:Wald said: "according to our analysis, although the market performs worst when the interest rate exceeds 10%, the forward return has been lower than the average level. When the interest rate is lower than 10% (currently 1.75%), the forward return can better reflect the current situation and is closer to the average value of all periods."He also said: "there was a sell-off in the stock market after the interest rate hike last week. We don't think it is a big problem, because the Federal Reserve raised interest rates by at least 75 basis points on november15,1994. The S & P index fell by 4% in the following week, but it bottomed out in the next two weeks, and then rebounded strongly in 1995."According to the chart, It seems that after the 75bp interest rate increase, the average performance of the market in 13 weeks and 26W was around 4%, and the average performance in 52w is 9.7%.Do you think the market will come out of the bottom soon?
      23.69K965
      Report
      Market Still in Extremely Fear: 10 Indicators to Check Bottom Reverse
    • Capital_Insights·07-15Capital_Insights

      Gene Munster: Market Will Hit Bottom After Earnings Season

      This article is an excerpt from Gene Munster, Loup Ventures managing partner, who joined the 'Power Lunch'.Here are the 2 key points of his talk, and may be helpful for investors.if the tech sector is near a bottom?what investors are likely to hear from companies in September?1. Is the worst over for tech?In this year, it’s a good position for us to have 50% in cash, which may be a bad situation in the last year.Gene Munster said:Tech has bottomed and bottom is not a single point. It is a forming of a bottom and I think we're in the early stages of that.In particular,there are some positive signs:l $Micron Technology(MU)$ adjusted income guidance is down by 20%.l Last week stock closed down 3%.l June CPI reached 9.1% and rates are going to be up.Some institutions would say that the commentary is going to be negative about September. But I think we're gonna hit a bottom probably after this earnings season.And part of it is not just because the commentary I thinkresets a bar, but moreimportantly, the market looks six months forward. So the markets mentality, especially with big tech, is already in early 2023. And I suspect that some of these downward revisions that we're gonna see in the next few weeks, sets up for an easier bar and 2023.So as you kind of play this forward and think about the bottom of forming over the next couple of months, and I think 2023 is going to be a great year for tech.2. What's the big deal about September and what companies are likely to say and what you think we're likely to hear?Well, the important part is just resetting that bar. And I think that what investors want is for companies to exceed expectations. They don't want surprises.So in the theory is that the September quarter is the I think the first true reset quarter.We've looked at the commentary from companies of March & June report commentary. And we looked at 20 the top rated companies. And six of them had negative commentary about June. I think it's going to be more like 12 or 20. We'll have some negative commentary.Gene Munster said:But I see that as kind of a changing moment here allows tech investors in particular just to take a deep breath and and say yes, we've been waiting for these cuts. Now the cuts have happened. Now we can start even more fully embracinga easier 2023. Do you think the tech sector is near a bottom next quarter?Share your thoughts and win tiger coins~
      32.82K1.12K
      Report
      Gene Munster: Market Will Hit Bottom After Earnings Season
    • 程俊Dream·04-12程俊Dream

      U.S. Dollar Index hits fresh 2-year high, What can we expect from it?

      Last week, the US dollar index briefly hit the 100 integer mark, which broke through 100 again since May 2020. For a long time, the dollar has behaved closer to commodities-showing a trend of mean reversion, fluctuating around the median,When the price is too low, it will rise, and when the price is too high, it will fall. In terms of current prices, there is still 10-20% room from the long-term median. ​​ ​ Too long ago, the trend of the US dollar is linked to too many political and economic topics, and as a trader entering the market in the millennium, he can't be perfectly fastidious. However, after the financial crisis in 2007/08, there is still a very clear logic line supporting the market of the US dollar. On the whole, the leading position of the US economy compared with other economies (for better or worse) and the market's risk appetite are the main factors affecting the fluctuation of the US dollar. Taking the subprime mortgage crisis as an example, the first round of risk aversion was followed by worries about the collapse of the US economy, which led to the V-shaped reversal of the US dollar. After the European debt crisis in 2012, the weak state of Europe and the strong state of the United States helped the US dollar regain its strength. Although there is the Federal Reserve's monetary policy interspersed among them, it is not difficult to find that raising interest rates/cutting interest rates is more of a staged impact than a trend-oriented one. Back to the current situation, the sound of American economic strength has not stopped since last year. Although some skeptics have put forward various theories of American collapse, from the data level, compared with other major economies, the relative strength of the United States is still an unavoidable problem. This is why the Fed dared/was forced to raise interest rates. After the crisis in Russia and Ukraine broke out at the beginning of this year, Europe naturally became the eye of the storm. As we all know, the biggest composition of the US dollar index comes from the opponent's euro. Concerns about the prospects of Europe and the euro have caused European assets to fluctuate downward. In other words, another factor supporting the dollar, hedging, also exists. From a purely technical point of view, breaking 100 is only a psychological level position and does not have much strategic value. The real breakthrough of US dollar has been formed and determined since 97/98. The next major real concern appears in the 102/103 area, which will get rid of/out of the consolidation range since 2016 after breaking up. Does the dollar have a chance to go higher and further? We think the probability is not small. This is not to say how strong the American economy is, it is really "set off by opponents". Under the bad environment, the US dollar is similar to gold, without many advantages, but there is no natural obvious disadvantage. So will the trend of the US dollar herald greater market turmoil or crisis? We think we may not be able to focus on the dollar index itself intuitively. We might as well refer to the other two opponents, one is Japanese yen and the other is RMB. The yen has long been one of the safe-haven currencies, and is now close to where it was in 2007. If there is a big decline in risky assets, the yen should not continue to be under pressure. As for RMB, we have talked a lot before.So far this year, there has been no sign of direct talks between China and the United States, but the RMB has stopped appreciating. If G2 starts to work, risk-off is an inevitable result. ​​ $E-mini Nasdaq 100 - main 2206(NQmain)$   $E-mini Dow Jones - main 2203(YMmain)$  $Gold - main 2206(GCmain)$   $China A50 Index - main 2204(CNmain)$   $Hang Seng Index - main 2204(HSImain)$
      28.78K894
      Report
      U.S. Dollar Index hits fresh 2-year high, What can we expect from it?
    • TigerObserver·05-07TigerObserver

      Weekly Recap: Energy Sector Top the Increase By 7.4%, Will trend Continue?

      The major U.S. stock indexes fell for the fifth week in a row, and the NASDAQ hit the longest weekly decline in 10 years. With many important news and signals, you can turn to Why Market Plummeted? Joining the Vote of 8 Biggest Factors! for a better understanding of the recent big decline. Bull Market is Always Born in Pessimism! Key to Survive After Rate Hike! As of Friday, $DJIA(.DJI)$ slightly dropped 0.24%, $NASDAQ(.IXIC)$ declined 1.54%, $S&P 500(.SPX)$ lost 0.21%, $S&P/ASX 200(XJO.AU)$ dropped 3.09%, $Straits Times Index(STI.SI)$ slightly decreased 1.94%. Macro Factors: Fed's Rate Hike Meets Expectation: Fed announced a 50bps rate hike, in line with market expectations. The short-term interest rate market immediately ruled out the possibility of raising interest rates by 75 basis points in June. Powell warned that the Fed may act "quickly", which is likely to mean that if inflation remains high, it is necessary to raise interest rates more than 50 bps 3 times. Bond Yield Surge:The yield of 10-year US bonds broke through 3% again at the beginning of Powell's speech. The most recent rise to 3% occurred in 2018, and further ahead is after the subprime mortgage crisis in 2010 and 2009. Judging from historical data, the S & P 500 index is certain to fluctuate after the 10Y U.S. bond yield stands at 3%. Recession Risk Alert: US GDP fell 1.4% m-o-m in Q1 2022, far lower than the expectation of positive growth of 1%. Summing up the economic law since 1950, whenever the US inflation exceeds 4% and the unemployment rate is less than 5%, the US economy will fall into recession within 2 years. So far, inflation in the United States has exceeded 4% for 13 consecutive months, and the unemployment rate has been below 5% for 8 consecutive months. Top Sectors of S&P 500 Index Last week, The Energy, Utilities, and Communication Services sectors, are the top gainer sectors, especially energy got 7.41% increase. Consumer Cyclical, Real Estate, Consumer Defensive continue the 3 losers of last week. Inside the Energy Sector, Oil &Gas Refining & Marketing, Exploration & Production, Equipment &Services  industries all got good performance during last week. The TOP 10 performances of S&P 500 last week are $Albemarle(ALB)$ ,$Devon(DVN)$ , $Occidental(OXY)$ , $Pioneer Natural Resources(PXD)$ , $Valero(VLO)$ , $NRG Energy Inc(NRG)$ , $Hess(HES)$ , $Monolithic Power(MPWR)$ , $EOG Resources(EOG)$ , $Diamondback(FANG)$ . Other Markets: Volatility Lower: Last week, the VIX ended its fourth consecutive rise, but the fluctuation range increased. Before the interest rate increase, VIX exceed 36, approaching the panic that the NASDAQ fell into the bear market area on March 8. However, after the interest rate resolution came out, it fell back to the 24. When the VIX Index is in the low range (10-30), indicating that the market sentiment is optimistic / not pessimistic. Dollar Index touched 104:The U.S. dollar’s value versus a basket of other major currencies hit a 20-year High, after the interest rate hike decision, the US dollar index rose sharply and returned to above 103 on Thursday, approaching the 104 important mark, but analysis reminds that the continued rise of the dollar is unsustainable. Oil Rebounded Slightly:due to the decline of U.S. crude oil inventories, also the European Commission officially submitted sanctions including the oil embargo on Russia. Last week, the oil price rose from $100 to $110 per barrel. Still The market has doubts about the oil price breaking through the high of $120. Gold in Box Vibration: fell for three consecutive days last week, gaining support above $1880. At present, gold is supported by positive factors under anti-inflation expectations. The analysis is expected that it is still worth challenging near $2000. The previous week, gold market saw Hugh inflow in ETF last week. The week ahead: April 18-22Earning to focus: $Palantir Technologies Inc.(PLTR)$ ,$Tyson(TSN)$ ,$AMC Entertainment(AMC)$ ,$Novavax(NVAX)$ ,$Sony(SONY)$ ,$Peloton Interactive, Inc.(PTON)$ ,$Li Auto(LI)$ $Occidental(OXY)$ ,$Coinbase Global, Inc.(COIN)$ ,$Unity Software Inc.(U)$ ,$Walt Disney(DIS)$ ,$Fiverr International Ltd.(FVRR)$ ,$Rivian Automotive, Inc.(RIVN)$
      32.09K1.02K
      Report
      Weekly Recap: Energy Sector Top the Increase By 7.4%, Will trend Continue?
    • Alvin 邹咏翰·03-11Alvin 邹咏翰

      Hello stagflation

      US Labor Department data showed that the consumer price index jumped 7.9% from a year ago following a 7.5% annual gain, the highest yoy gain in 40 years. What is high for US would be high for everyone else eventually. Even if you are not an investor, you will be concerned about the rising costs of living. It doesn't feel good to pay for higher prices on necessities and leave you with less money to buy stuff you desire. Air ticket prices may go up just when you thought you could travel after two years of Covid.How likely is inflation going to persist?Some believe that the commodity price spikes were caused by the ongoing war between Russia and Ukraine and hence, prices should come down should the war ends. This is only one of the two factors. The war did cause a sudden spike in prices in the recent weeks. We also saw commodity prices coming down when President Zelenskyy softened his stance on NATO membership and the breakaway states. But talks in Turkey has just failed. Commodity prices are likely to swing up and down wildly following such political news but yes, the war has a direct impact.However we should not be too quick to think that a ceasefire would kill off the inflation woes. Sanctions are likely to be in place even if the war ends and Russia's absent supply would have to be covered by other countries. US has been requesting OPEC to turn up the tap and UAE has been mulling it. Saudi Arabia has said no. Hence, the supply gap may not be fulfilled and prices may remain high.The second factor is due to a combination of the Fed's liquidity and supply shock from Covid. This has caused prices to go up since a year ago, way before the war started. The Fed has decided to raise interest rate because of this. Senior Minister Tharman gave a speech about a "perfect storm" during the IMAS-Bloomberg Investment Conference. He related the current situation to the double-digit inflation in the 1970s. But this time it is more complex because it isn't just an oil shock, but it includes "food, metals and fertilisers". He went on to say that economic models aren't going to work well and that central banks would have a huge challenge to navigate this uncharted waters. A stagflation is in the cards - persistent inflation and slower growth.I agree with him and the Fed is in a dilemma. Initially it was more of an inflation problem and raising rates would be the natural cause of action to tame it. But the Russia-Ukraine problem threw a spanner and disrupted trade and slowed economic growth. The economy was recovering from Covid and now this. Raising rates could endanger the economy and may sink it into a recession. So raise or don't raise? Either action may yield unintended consequences where the magnitude of impact is unknown. It might be a good idea to buy things now, especially those that are imported from China. This is because coal prices have soared more than 500% from a year ago and coal makes up more than 50% of China's energy sources. Being a factory of the world, China consumes more energy producing stuff for others and the rising cost might be passed down to consumers. We have not felt it yet but it might just be around the corner.
      61.42K675
      Report
      Hello stagflation
    • Capital_Insights·06-01Capital_Insights

      May Recap: V-Shaped Month on Stocks and Huge Insider Buys

      Sell in May?They certainly did, but rather than go away as the old stock market adage suggests, traders returned to aggressively buy the dip, causing some of the wildest monthly swings in recent times.There was plenty of selling in the first half of the month across asset classes, driven by doubt over the economic data,mixed corporate earnings,aggressive central banks, inflation and China's lock-down policies.US stocks $S&P 500(.SPX)$ briefly dipped into bear market territory, down 20% from their recent peak, But markets subsequently started dialing back expectations of U.S. interest rate rises. Weekly Recap: The Market Tend to Start to More Strength?!1. V-Shaped Month on StocksCited from Ruters: The MSCI's global stocks benchmark had burnt nearly $5 trillion of value at its bottom on May 9 versus its peak during the month, plumbing its lowest in around 18 months.From that point the index has rallied 8% as markets unwound the most aggressive Fed tightening bets. So the MSCI World index is set to end May with a small gain, returning to a market capitalisation north of $60 trillion.The stock segment arguably most vulnerable to interest rate swings - U.S. tech - meanwhile plunged 15% in the first 20 days of the month, before rebounding 12%.The Nasdaq Composite index $NASDAQ(.IXIC)$ ended May down 2.1%. That’s a narrower decline than in April when the index fell 13%, but it remains in bear market territory, down 23% this year.2. Record Buybacks and Insider BuysIn May, S&P 500 buybacks were the strongest since March 2020, according to VerityData. Separately, in May, for the broader small-cap index Russell 2000, share buybacks exceeded sales for the first time since March 2020.Executives bought company stock at the fastest pace since the 2020 COVID-19 outbreak. Some Wall Street analysts said that was an encouraging sign for U.S. stocks.Analysts at JPMorgan Chase said on May 27 that while retail investors pulled out of the stock market and the threat of a U.S. economic slowdown or recession loomed, corporate insiders’ views on most industries were contrary to market consensus and were going crazy.” "Buying the bottom", its own stock that has been falling endlessly.Analysts at the bank said the “record” corporate buybacks indicated that U.S. stocks were about to bottom out.The Detailed TOP 10 Insider Buys Stock by cost are as follow: $Seven Hills Realty Trust.(SEVN)$ , $Tradeup Acquisition Corp(UPTD)$ , $Runway Growth Finance Corp.(RWAY)$ , $Occidental(OXY)$ , $Nielsen Holdings PLC(NLSN)$ , $Santander Consumer USA(SC)$ , $ServiceSource(SREV)$ , $Carvana Co.(CVNA)$ , $HP Inc(HPQ)$ , $Korab Resources Ltd(KOR.AU)$ .Data source: gurufocus.comInside which, $(OXY)$ and $(HP)$ were all increased position by $Berkshire Hathaway(BRK.B)$, $Berkshire Hathaway(BRK.A)$ .For more inside buy info, you can turn to gurufocus.com website if needed.3. CRYPTO CRASHEDRegarding Crypto Market, rocked by the mid-May collapse of Terra USD, a stablecoin which lost its 1:1 dollar peg triggering big falls in all other crypto assets.By the time Terra USD collapsed, the total market cap of all cryptocurrencies had slipped as low as $1.14 trillion, according to CoinMarketCap.It stands now at $1.3 trillion, down around 25% this month and more than 56% below November's peak of almost $3 trillion.Stock futures were higher early Wednesday morning as Wall Street turned the page to another month.What your target and what's your expectations on this market in June?Feel free to Join the Topic please ~~
      24.64K969
      Report
      May Recap: V-Shaped Month on Stocks and Huge Insider Buys