Can the economic news get any worse? Today, February 29, we got three reports of new data and they were all terrible. Now I know why they call this a leap year, as in leap off a cliff.
With the fourth quarter earnings season almost completed, Q4 Earnings per Share (EPS) for the S&P500 are down 3.3% year over year (YoY), making this the third consecutive quarter of declining YoY earnings.
Analysts at the German bank told investors on Friday (February 26, 2016) that they should buy the precious metal. “Gold is still expensive,” they said “but rising economic risks and market turmoil mean investors should buy it for insurance.”
The second estimate of real US fourth quarter GDP released today was a miserable seasonally- adjusted annual rate of 1.0%. But it was up from the even more miserable first estimate of fourth quarter growth of 0.7% which came out at the end of January. The second estimate was even above the consensus range. Good news, right?
This major gold producer opened down 10% this morning (February 26, 2016) because of the earnings news released the night before. Were the earnings that bad? No, not at all. Once again, the market sells when it should buy and buys when it should sell. Continue reading “Pick of the Week: Goldcorp (GG: NYSE)”
January new home sales were reported yesterday and they fell the most since 2009 when the economy was in recession. New home prices plunged to a two-year low. Anyone expecting an economic recovery in the US and more Fed rate hikes should wake up and smell the coffee. Continue reading “New Home Sales: Bad News for the Economy”
Last month, JP Morgan predicted that the collapse in the crude oil price would generate $75 billion in sales of global equities in 2016. Why? Because Sovereign Wealth Funds (SWFs) own a lot of stocks and some of these SWFs now have serious cash flow problems. Continue reading “Billions of Dollars in Stocks for Sale”
In my opinion, the stock market is now in the first stages of a bear market that will eventually test the March 2009 S&P low of 666. Meanwhile, the market is on a tear to the upside over the past few trading days so I must be an idiot, right? Continue reading “You Should be a Seller”
On February 16, 2016 the Washington Post published an op-ed piece by Larry Summers titled “It’s time to kill the $100 bill” in which he makes it clear that the war against paper money is only just starting. Not surprisingly, just like in Europe, he argues that killing Benjamins will help eradicate crime, saying that “a moratorium on printing new high denomination notes would make the world a better place.” Continue reading “The War on Cash (2)”
Both Central banks and commercial banks have always hated cash. When you hold cash, the banks don’t have it. And the banks want it all. Money in the bank funds the bank. Cash in your hands takes you outside their system, empowers you and reduces their profit potential. Continue reading “The War on Cash”