Showing posts with label predictions. Show all posts
Showing posts with label predictions. Show all posts

Thursday, December 31, 2015

Money Daily TacklesThe Best Of Wall Street With 2016 Predictions; The Big Fail: S&P, Dow Finish Lower for 2015

Stocks took it on the chin on the last trading day of 2015, and the S&P and Dow Industrials ended the year with losses. Only the NASDAQ showed a gain for the year.

Closing prices for December 31, 2015:

-19.42 (0.94%)

Chart for ^GSPC

-178.84 (1.02%)

Chart for ^DJI

-58.44 (1.15%)

Chart for ^IXIC
That's a wrap for the year. Read on, because 2016 is going to be even more interesting.

Picks for 2016

Courtesy of Barron's, here are some of Wall Street's top strategists picks to click in 2016:

Note the groupthink among these masters of the universe posers.

Aside from Steven Auth's outrageous call for 2500 (it might be a typo) the target for the S&P 500 ranges from 2100 to 2250. The expected 2016 GDP is all in a range from 1.9% to 2.8%. These are not the brave and the bold, that's for sure.

So, since Wall Street analysts have decided to continue with the false narrative that all is well, Money Daily offers the following set-up for what figures to be a downright fascinating year.

Since it's a presidential election year and the past two which marked the end of an eight-year presidency (Bush replaced Clinton in 2000, Obama replaced Bush in 2008) both were near-disasters for equity traders, 2016 promises to be an explosive twelve months.

Now that you've seen theirs - which, by the way, don't vary much - here is what Money Daily believes will work in the coming year.

First, the equity markets will absolutely tank.

Stocks Take a Beating

While it would be foolhardy to predict where whole indices will be trading at the end of the year 2016, it may be more instructive to offer a timeline. Since the S&P and Dow haven't made new highs since May of 2015 and both ended the year lower than they closed out 2014, the table has been set for an absolute bear-fest in the opening quarter of the year.

As bears emerge from a short hibernation due to climate change (one of the warmest winters on record in the Northeastern US), they will be hungry to take down entire sectors of the market. Hardest hit will be consumer goods, financials, health care, technology and services. No sector will be spared, but the safest havens will be in basic materials and utilities. The best place of all to be will be largely in cash or bonds. The 10-year note is likely to rally strongly as people flee to safety, and, despite the best efforts of Janet Yellen and the Federal Reserve to boost interest rates, the market will set the tone.

The major indices will be looking up at highs which will seem ridiculous by June. Taken on a monthly basis, January will see outright selling, putting the major indices into correction (-10%). February and March may be mild, but could be wild, depending on the direction of most of the well-followed indicators, like industrial production, capacity utilization, the various Fed surveys, factory orders, ISM manufacturing and services, and, of course, non-farm payrolls.

By April or May, the bloom will truly be off the rose, as first quarter GDP comes in below expectations or even shows up negative, the most likely culprit, warmer weather, as opposed to cold weather, which was blamed for the last two Q1 debacles.

Timing the return to a bear market can be tricky, so let it suffice to say that by June at the very latest, stocks will be down more than 20% overall, and the scare will be on.

At the bottom, which will be any time prior to election day, here's where Money Daily expects the major indices to be residing:

S&P 500: 1450
Dow: 12,400
NASDAQ: 3200

Bonds Will Be Wonderful

The 10-year note will trade higher from February through September, with the yield going below the two percent mark and staying there for an extended period, perhaps through the end of the year. Since stocks will offer only losses, lowered guidance and dividend cuts, the flight to bonds will be massive. The short end will be anathema; the 10-year and 30-year will be the bright spots.

GDP May Appear Recessionary

If 2016 results in any growth at all, it will be anemic, in the 1-1.5% range at best. With either the first and second or the second and third quarters putting up negative numbers, the odds for a true recession are high, and the Fed, without any interest rate cuts to counter the slack in the economy, will prove powerless.

The long look will be on currency collapse. After the massive gains in 2015 for the US dollar, that trade will likely reverse. Either that, or a global depression will be the order of the day.

Precious Metals Still Shine

While shunned with near-unaniminity on Wall Street, gold, silver, and platinum will hold their own and probably explode to the upside in the face of outright recession or depression. Gold and platinum could easily see 30-40% gains, while silver, the most-suppressed metal (and most important) could double by year-end, but all the metals will pull back in the early stages of the bear market in stocks.

Once a base is set for the precious metals, it will be off to the races in what will be the resumption of the decades-long bull market that began in 2000. The declines from 2012-2015 will be seen only as a cyclical bear correction amidst a secular bull.

Commodities Useful in Any Environment

So beaten down has been the commodity index, investors may be able to pick and choose from their choice of useful basic materials. Coal, iron, copper, zinc, lumber, oil and other fuels can be a boon in the best or worst of times.

Low prices in crude oil, natural gas and coal should remain in place for the entire year, and beyond. The usefulness of any commodity is, naturally, the selling point, but, in an oversupply environment, end users, rather than producers, will be the main beneficiaries.

An outright deflationary environment should prevail, a boon to cottage industries and small business, which is a welcome change from the repressed conditions of the previous decade. Anyone with the ability to store or make productive use of any manner of commodity should benefit greatly.

Real Estate As Investment Could Be Solid

There are three good reasons to own real estate. Living in a residential home, farming or mining, and renting on a commercial basis.

Since residential real estate is and has been in the stratosphere in many parts of the USA, it's likely to take a serious hit in 2016, with price declines of 10-30% in selected areas, more in others. Speculators and flippers will be fed to the sharks and there will be a slew of defaults in the REIT space.

Farmland, especially anything under 30 acres, which can be handled by a family or small enterprise, could be the best investment of the year. Productive land is usually safe, and besides, you can eat what you grow, which is always a concern.

Commercial real estate will go begging. It's massively overpriced and over-leveraged, due for a massive decline.


The US and global economies have been on a collision course between a massive debt bubble and a large pin. It all comes to a head in 2016, some of it pre-planned, much of it unrehearsed, unwanted and unnecessary.

Stocks will be hated, Wall Street bankers will once again be the object of derision (as they so rightly deserve to be), and politicians will be exposed as mere vassals to the deep state and the banking cartel.

The US will be lucky to avoid a major war, as the Military-Industrial-Congressional-Conplex (MICC) seeks a way out of debt crash and currency debauchery. There isn't one. Only systemic collapse can heal what's wrong in the economies of the world. Watch Japan closely, then Europe. They are the proverbial canaries in the coal mines. China will set its own course, but will continue to emerge as a world power.

The outlook isn't very rosy, admittedly, but, the great oligarchs of the day have made it so. Unmanageable levels of government, business and household debt are screaming for a reset, a break, a jubilee, and it very well could happen.

On the other side of a currency collapse is a bright future, but, if any of the outcomes predicted here actually occur, it will only be the beginning, and there will be more pain for the remainder of the decade. Until Americans and people around the world throw off the shackles of governments, replete with their laws, rules, regulations and onerous taxes, there will be no prosperity.

Donald Trump will win the presidency in November, a sign that the American people have had enough of the status quo.

Happy New Year!

Friday, December 30, 2011

Rush for the Exits as 2011 Ends on Sour Note; Markets Flat for 2011; Predictions for 2012

Stocks traded in their usual tight ranges on the final day of trading for 2011, and just about every trader, investor and pundit seems to be in agreement that they year was a difficult one. At the end of the session, a rash of selling sent the major indices near their lows of the day. Volume was insignificant, but the late-day selling was an eye-opener, though possibly not materially a precursor to January, 2012.

Today's Closing Numbers:

Dow 12,217.56, -69.48 (0.57%)
NASDAQ 2,605.15, -8.59 (0.33%)
S&P 500 1,257.60, -5.42 (0.43%)
NYSE Composite 7,477.03, -8.60 (0.11%)
NASDAQ Volume 1,008,177,750
NYSE Volume 2,225,404,500
Combined NYSE & NASDAQ Advance - Decline: 2647-3004
Combined NYSE & NASDAQ New highs - New lows: 178-47
WTI Crude oil: 98.83, 0.82
Gold: 1,566.80, +25.90
Silver: 27.92, +0.60

Of the four major indices, only two - the Dow and S&P 500 - returned positive results for the year.

Here's how 2011 stacked up:

Index Close 12/31/10 Close 12/30/11 Change
Dow 11577.51 12217.56 +640.05
NASDAQ 2652.87 2605.15 -47.72
S&P 500 1257.64 1,257.60 -0.04
NYSE Comp. 7964.02 7477.03 -486.99

Now, checking back on Money Daily's 2011 predictions, here, here and here, we can summarize the results.

We said the overriding theme would be VALUE. With the emphasis now on dividend-paying stocks, we can give ourselves a half thumbs-up, though the real word for the year, especially the second half, was VOLATILITY.

We mentioned that "US employment situation is not going to get materially better in 2011..." A+ on that call.

Housing: "The expectation is for residential housing prices to drop another 6-10% during the year, with larger decreases in the NorthEast and MidWest." Bingo.

FOREX: "The US dollar will fare well against almost all other competing currencies. Destruction of the world's reserve currency takes time, and a year is just a small part of the breaking tableau." Another spot on analysis.

Eventually, price will meet demand, or lack thereof, and some equilibrium found before riots and starvation become the norm. Your best bets for 2011 are still gold and silver, with the latter being the favored instrument as it seeks to re-establish the 15-1 gold-silver ratio. Both should appreciate well in excess of 15%, so $1500 gold should be an easy target and silver may bust right through $40 per ounce in rapid manner.

As far as oil is concerned, apart from the rigged and artificial aspects of how it is traded, crude prices cannot exceed $100 for very long, if they even reach them. Absolute price inflation will crimp demand, and, thus, set the wheel back to "go" again, so don't expect oil prices to skyrocket or decline much at all. Stable prices would be best for all parties (except those selling the stuff, short term), and that's what we may get. There's about a 30% chance oil prices actually fall on slack demand, back under $75, but not much further, though a price around $60 per barrel would go a long way toward global growth, though the supply/demand numbers simply don't add up well for that to be much more than a wing and many prayers.

Despite a serious decline in the latter months of 2011, gold and silver held up well, despite blatant price manipulation by central banks. The call on oil was pretty much correct.


The following are the predicted trading ranges for the major indices in 2011:
Dow: 9250-12000
NASDAQ: 2100-2750
S&P 500: 875-1300
NYSE Comp: 5650-8100

Not a bad showing, though the predicted lows were never met.

Money Daily also made some comments regarding the bond market, inflation, social trends and politics which were generally in the right direction. They can be found here.

Now, on to predictions for 2012 (very briefly):

Stocks: At the end of 2012, after a protracted decline though to the elections, the markets should get a bounce and end somewhere around:
Dow: 10,700
NASDAQ: 2350
S&P: 1050
NYSE Composite: 6780

Overall, it's going to be another challenging year for stocks, with high unemployment, the collapsing Euro and high tensions in the Middle East among the factors that will keep investor confidence low.

Commodities: Since gold and silver fell off the cliff at the end of 2011, they should rebound smartly and be among the best investments of the year. Oil will continue to fluctuate between $75 and $100, though passage of a bill allowing the Keystone pipeline to be built or a war with Iran (very high probability) could push prices out of that range; lower in the former instance, much higher in the latter.

Bonds are going to remain in their tight ranges, since the Fed has already announced they'd keep the federal funds rate unchanged though 2013.

FOREX: Short the Euro, Long US dollar, Aussie and Canada.

Politics will keep the economy from gaining very much traction until the election. The plan by the schemers behind the candidates is to keep the economy stumbling along in order to usher in a new Republican era. Whether or not they succeed will depend on a vast sea of changing factors, though the most pressing will still be the economy, followed by Iran, Obama-care and voting right. The Republicans can't win with Newt Gingrich or Mitt Romney. A Ron Paul candidacy could make life a little too interesting for the incumbent and Paul would be a great president, exactly what's needed in the US at this time of perpetual crisis. Paul would change the nature of US foreign policy, reform entitlements and get back to the rule of law.

While it's a near certainty that the Republican party chiefs will do everything in their power to keep him from winning the nomination, he could do it. Otherwise, a third party candidacy by Dr. Paul would ensure an Obama landslide.

Unless Ron Paul is in the race, Obama will win a second term.

That's it. See you in 2012. Happy New Year!