Sure, the economy is just fine.
That's what the pundits on Bloomberg and CNBC would have you believe.
So, if everything is so darn good, why is Macy's - which has over 700 stores in the US - closing 40 stores and laying off 4,500 employees?
And why did the NASDAQ and the Dow close the day in correction territory (down 10% from high) today, with the S&P not far off?
People who host shows and are guests on TV want you to believe it's all China's fault. Over on mainland China, their stock markets closed early for the second time this year. That's twice in four days that circuit breakers have been triggered. A 7% selloff causes the market to shut down. Those are their rules. Or, rather, those were their rules.
Early in the US session, Chinese authorities announced that they were suspending the circuit-breaker rule, so their stock markets may fall a lot deeper tomorrow than a mere 7% before everything in the People's Republic goes down the drain.
It's not China's fault. It's the fault of the Fed, the government (for looking the other way and accepting bribes from corporations and banks), and the greed of Wall Street. It's also the fault of smart people taking their money out of the rigged casino, aka Wall Street, before it all vanishes, like it did in 2000, or 2008.
Also, Yahoo! is laying off 1000 employees as part of their reorganization plan. One employee that isn't being let go, but should, is CEO Marissa Mayer, of whom Money Daily said years ago was nothing but a wannabe, a poser, with no measurable skills for running a company.
Yes, the economy is not good, Wall Street and the government is run by a gang of crooks, and, incidentally, those highly-paid CEOs, like Ms. Mayer, should be in bread lines with the rest of the people being let go, because they're incompetent.
America, a once-great country, is going down the tubes, and in a big hurry. The culprit is not some foreign entity, terrorism, guns or aliens. The reasons can be found all over the country. Greedy lawyers, greedier bankers, corrupt government officials, incompetent business leaders, and, interwoven into the fabric of this country, placid, placated, ill-educated, preoccupied, self-engrossed people who vote (or don't) in elections and think they've done their part are all part of the problem, and not part of the solution.
But, people could be the solution. If people stopped making poor decisions, stopped listening to people in authority positions, and started taking responsibility for their own lives, rather than hoping for handouts from an uncle sugar government, people could solve their problems on their own.
The concept of self-reliance has been largely lost in America, but, herms hoping it's going to make a comeback when people wise up to the antics of politicians who don't deliver on their promises and kick them to the curb, where they belong.
There are lots of problems in this country that people could solve on their own if they took charge of their own lives. That, truthfully, may be asking for too much. We've wasted too much time in this country and waited too long for the governing class to do the right thing. Now, it may be too late, and we'll all just have to fend for ourselves.
Actually, that may not be too bad a thing.
The day on wall Street was not pretty, with major indices taking a third huge loss in four days. The Dow Industrials are down nearly 1000 points so far this year, putting 2016 already 6% in the red for even the safest stocks. Averages were lower all day, with no signs of rallies, and, perhaps more telling than anything, there was no snap-back at 3:30 on short covering, which has been the norm of late.
As noted by the quotes below, WTI crude oil finished with a 33 handle, a number not seen in the oil pits in 12 years. Gold and silver have broken out of moribund ranges, though holding and advancing from these levels may be difficult, as central banks collude to keep currency that may compete with the almighty dollar, euro or yen at undesirable levels.
What's undeniable about the gold and silver rigging is that it is unsustainable long-term, though central banks and their henchmen in the COMEX have managed to keep sending the prices of precious metals lower for nearly five full years. With stocks potentially falling out of favor, bonds, cash and PMs may appear to be the best bets with which to ride out a currency storm, a scenario that could be occurring in real time as the dollar/yen carry trade continues to unwind.
There is chaos everywhere, and, for the final trading day of the new year's first week, two important developments will be how the Chinese markets fare and US non-farm payroll data for December, due for release at 8:30 am ET.
Closing prices for Thursday, January 7, 2016
S&P 500: 1,943.09, -47.17 (2.37%)
Dow: 16,514.10, -392.41 (2.32%)
NASDAQ, 4,689.43, -146.34 (3.03%)
Crude Oil 33.21 -2.24% Gold 1,109.20 +1.58% EUR/USD 1.0929 +1.41% 10-Yr Bond 2.1530 -1.10% Corn 352.00 -0.35% Copper 2.02 -3.16% Silver 14.32 +2.50% Natural Gas 2.37 +4.46% Russell 2000 1,064.57 -2.72% VIX 24.99 +21.37% BATS 1000 20,761.26 -2.29% GBP/USD 1.4618 -0.05% USD/JPY 117.5480 -0.80%
Thursday, January 7, 2016
Wednesday, January 6, 2016
The End? Stocks Slammed Again; Economic Prospects for 2016 Appear Grim
What should have happened in 2008-09 may be beginning to happen now, in 2016. Investors should take losses, companies should go broke, and government apologists should have a "come to Jesus" moment and admit that they've been lying about the recovery for years.
There is and there has been no recovery. GDP has been stuck between one-and-a-half and two-and-a-half percent since the financial crisis (and that's if you believe government accounting). 2015 will be fortunate to register at two percent growth.
Meanwhile, wages are stagnant and falling, 95 million able-bodied Americans are not officially counted as part of the workforce. The middle class has been hollowed out by Wall Street greed, government over-taxation, and unrealistic government salaries and pensions that suck the life out of local and state budgets.
The jobs that made America great have long gone, shipped overseas to China and elsewhere, and now we are exacerbating our pitiful condition by allowing in more immigrants - legal and illegal - taking away the few jobs left for natural-born citizens.
Baby boomers are retiring, replaced by their dumbed-down progeny. Our national debt of nearly $19 trillion - and growing - is a universal disgrace. Meanwhile the Federal Reserve, in cahoots with the shiftless Treasury Department, debases our currency by print a full 40% of government expenditures.
The federal government wants to grab our guns, the states want to charge us rent - in the form of property taxes - on the property we own, and neither of them can balance their books. The American public is at a breaking point, through with political correctness, suspicious of a government that spies upon us, regulates us, lies to us and sends our kids to die in useless wars which are never won. The controlled mainstream media propagandizes and cajoles anyone who doesn't align properly with the official corporate-government-military line.
Truly, in the short history of our Republic, we are on the cusp of complete breakdown in finance, education, morals, and decency.
And, while the blame can be placed on the people itself, because we voted for the spineless, unaccountable elected officials who have led us to this point, it should fall on the shoulders of those doing the governing, the legislating, the ones who are routinely bribed to pass legislation that favors corporations over people, banks over homeowners, and diminishment of our rights and liberties over common sense.
Our current government is the most corrupt to ever inhabit the halls of congress and the White House, our state houses and our government mansions. Is it any wonder that only half of the people who can vote, do vote?
Wall Street insiders hold all the cards, and they're gradually folding them. The Dow Industrials, S&P 500 and NASDAQ were all lower by massive amounts again today, for the second time in three this year. If this is a portent of what's ahead for the rest of the year, the ride may not be bumpy at all, merely a slide into the mediocrity created by greed, failed, moronic policies of the Federal Reserve, all with the implicit consent of the government, a government that is not worth the support of the people.
The slow collapse of stocks that has been on display the first week of this year has already been gaining steam since prior to last summer. Stocks peaked in late May and are 6-8% lower (depending on which index you choose) from their inflated high points. The Dow is down nearly 500 points in just three days this year and more than 850 points since the Fed decided, in their insipid, desperate desire, to raise interest rates mid-December.
Manufacturing, as measured by the ISM, has shown contraction for two consecutive months. US Services PMI dropped to 54.3 - the lowest since January 2015. ISM Services fell to 55.3, the lowest level since March 2014.
US factory orders for November fell 4.2% year-over-year, the 13th consecutive monthly drop. We are on the verge of a recession, in the middle of a depression. The emperor has no clothes and this time, with federal funds rates straining to hold between 0.25 and 0.50%, there is no place to hide.
If this isn't the end, it's getting pretty close. According to the most widely-accepted charting methods, stocks will enter a correction phase within a month, if not sooner. Corporate profits are falling, as companies cannot concoct any more accounting tricks to show even meager profits. Quarterly results are due out over the next three to four weeks and prospects for corporate earnings are poor. For retailers, energy stocks and consumer goods producers, the results - stemming from missing expectations for the holiday season and an oversupply of crude oil and distillates - might be devastating.
Stores are being shuttered in malls across the country and with them, marginal jobs which will not come back. The only bright spots are that inflation is nil, gasoline is cheap, and the winter, thus far, has been mild, at least in the heavily-populated Northeast.
Somehow, America will survive. However, the America of 2016 is a far cry from what the country was just 30 years ago, and a dim representation of what our Founding Fathers conceived.
S&P 500: 1,990.26, -26.45 (1.31%)
Dow: 16,906.51, -252.15 (1.47%)
NASDAQ: 4,835.76, -55.67 (1.14%)
There is and there has been no recovery. GDP has been stuck between one-and-a-half and two-and-a-half percent since the financial crisis (and that's if you believe government accounting). 2015 will be fortunate to register at two percent growth.
Meanwhile, wages are stagnant and falling, 95 million able-bodied Americans are not officially counted as part of the workforce. The middle class has been hollowed out by Wall Street greed, government over-taxation, and unrealistic government salaries and pensions that suck the life out of local and state budgets.
The jobs that made America great have long gone, shipped overseas to China and elsewhere, and now we are exacerbating our pitiful condition by allowing in more immigrants - legal and illegal - taking away the few jobs left for natural-born citizens.
Baby boomers are retiring, replaced by their dumbed-down progeny. Our national debt of nearly $19 trillion - and growing - is a universal disgrace. Meanwhile the Federal Reserve, in cahoots with the shiftless Treasury Department, debases our currency by print a full 40% of government expenditures.
The federal government wants to grab our guns, the states want to charge us rent - in the form of property taxes - on the property we own, and neither of them can balance their books. The American public is at a breaking point, through with political correctness, suspicious of a government that spies upon us, regulates us, lies to us and sends our kids to die in useless wars which are never won. The controlled mainstream media propagandizes and cajoles anyone who doesn't align properly with the official corporate-government-military line.
Truly, in the short history of our Republic, we are on the cusp of complete breakdown in finance, education, morals, and decency.
And, while the blame can be placed on the people itself, because we voted for the spineless, unaccountable elected officials who have led us to this point, it should fall on the shoulders of those doing the governing, the legislating, the ones who are routinely bribed to pass legislation that favors corporations over people, banks over homeowners, and diminishment of our rights and liberties over common sense.
Our current government is the most corrupt to ever inhabit the halls of congress and the White House, our state houses and our government mansions. Is it any wonder that only half of the people who can vote, do vote?
Wall Street insiders hold all the cards, and they're gradually folding them. The Dow Industrials, S&P 500 and NASDAQ were all lower by massive amounts again today, for the second time in three this year. If this is a portent of what's ahead for the rest of the year, the ride may not be bumpy at all, merely a slide into the mediocrity created by greed, failed, moronic policies of the Federal Reserve, all with the implicit consent of the government, a government that is not worth the support of the people.
The slow collapse of stocks that has been on display the first week of this year has already been gaining steam since prior to last summer. Stocks peaked in late May and are 6-8% lower (depending on which index you choose) from their inflated high points. The Dow is down nearly 500 points in just three days this year and more than 850 points since the Fed decided, in their insipid, desperate desire, to raise interest rates mid-December.
Manufacturing, as measured by the ISM, has shown contraction for two consecutive months. US Services PMI dropped to 54.3 - the lowest since January 2015. ISM Services fell to 55.3, the lowest level since March 2014.
US factory orders for November fell 4.2% year-over-year, the 13th consecutive monthly drop. We are on the verge of a recession, in the middle of a depression. The emperor has no clothes and this time, with federal funds rates straining to hold between 0.25 and 0.50%, there is no place to hide.
If this isn't the end, it's getting pretty close. According to the most widely-accepted charting methods, stocks will enter a correction phase within a month, if not sooner. Corporate profits are falling, as companies cannot concoct any more accounting tricks to show even meager profits. Quarterly results are due out over the next three to four weeks and prospects for corporate earnings are poor. For retailers, energy stocks and consumer goods producers, the results - stemming from missing expectations for the holiday season and an oversupply of crude oil and distillates - might be devastating.
Stores are being shuttered in malls across the country and with them, marginal jobs which will not come back. The only bright spots are that inflation is nil, gasoline is cheap, and the winter, thus far, has been mild, at least in the heavily-populated Northeast.
Somehow, America will survive. However, the America of 2016 is a far cry from what the country was just 30 years ago, and a dim representation of what our Founding Fathers conceived.
S&P 500: 1,990.26, -26.45 (1.31%)
Dow: 16,906.51, -252.15 (1.47%)
NASDAQ: 4,835.76, -55.67 (1.14%)
Tuesday, January 5, 2016
Stocks Retrace Lows, End Positive; Gold At Inflection Point
There wasn't much to talk about on the second trading day of 2016, except that stocks managed not to fall for the second consecutive day, thanks to late-day jacking by people who apparently haven't yet gotten the memo that Buying the Dip is so 2012-2015.
Rather than investors seeking bargains, today's late action was more or less a bailout by the NY Fed or the PPT (maybe the same entity) lest people get the idea that the markets are rigged and uncertain.
Surely, economic data and downgrades of the S&P by Citi and the US economy by Duetsche Bank couldn't support the irrational failing that typified the trading on the session.
All three major indices ended the day happily in the green after retracing their lows, giving the CNBC and Bloomberg talking heads a talking point to the effect of "bouncing off yesterday's lows" and being oversold and other such rubbish that is the mainstay of financial (sic) journalism these days.
Markets are likely to gyrate around until Friday, when December non-farm payrolls are announced. In the meantime, the ADP jobs survey kicks off tomorrow prior to the bell, a harbinger of things to come. It might be interesting enough to move markets a little, but probably not by much.
More interesting was the trade in WTI crude. The slippery stuff moved under $36/barrel, finishing at $35.95. Silver ended up some change, closing the NY session at an even $14 per troy ounce. Gold also gained, ending in the US at the statistically signficant 1078.10, which is roughly the delineation between support and resistance. If stocks stumble again this week, watch the PMs take off, as they've been mired in a bear market for more than three years and are viciously oversold.
S&P 500: 2,016.71, +4.05 (0.20%)
Dow: 17,158.66, +9.72 (0.06%)
NASDAQ: 4,891.43, -11.66 (0.24%)
Rather than investors seeking bargains, today's late action was more or less a bailout by the NY Fed or the PPT (maybe the same entity) lest people get the idea that the markets are rigged and uncertain.
Surely, economic data and downgrades of the S&P by Citi and the US economy by Duetsche Bank couldn't support the irrational failing that typified the trading on the session.
All three major indices ended the day happily in the green after retracing their lows, giving the CNBC and Bloomberg talking heads a talking point to the effect of "bouncing off yesterday's lows" and being oversold and other such rubbish that is the mainstay of financial (sic) journalism these days.
Markets are likely to gyrate around until Friday, when December non-farm payrolls are announced. In the meantime, the ADP jobs survey kicks off tomorrow prior to the bell, a harbinger of things to come. It might be interesting enough to move markets a little, but probably not by much.
More interesting was the trade in WTI crude. The slippery stuff moved under $36/barrel, finishing at $35.95. Silver ended up some change, closing the NY session at an even $14 per troy ounce. Gold also gained, ending in the US at the statistically signficant 1078.10, which is roughly the delineation between support and resistance. If stocks stumble again this week, watch the PMs take off, as they've been mired in a bear market for more than three years and are viciously oversold.
S&P 500: 2,016.71, +4.05 (0.20%)
Dow: 17,158.66, +9.72 (0.06%)
NASDAQ: 4,891.43, -11.66 (0.24%)
Monday, January 4, 2016
Can You Hear Me Now? MONEY DAILY Predictions Prove Prescient As Stocks Drop on First Trading Day of 2016
As 2015 drew to a close, Money Daily put forward a number of predictions for what 2016 would bring as pertaining to economies and financial markets.
While one day's trading cannot be considered anything more than market "noise," the historic sell-off of January 4 - the first trading day of the new year - proved to be the worst performance to start a year since 2008, and one of the top ten worst starts to a year in market history.
While stocks were down large in the US, they were worse in Asia and Europe. The Shanghai Composite was shaved by 6.9%, Japan's Nikkei tumbled nearly 600 points, a loss of 3.06%.
Germany's DAX was the hardest hit of Europe's majors, losing 4.28%. England's FTSE 100 fell 2.39; France's CAC-40 was down 2.47%.
In the US, most of the carnage was done by midday. Stocks drifted into the closing hour, and were boosted substantially off their lows by a face-ripping, short-covering rally in the last half hour of trading.
It was an unnerving beginning to a year which promises much in the way of surprises with limited upside for stocks, which have been and continue to be wildly overvalued.
Some of the bigger names were high on the list of losers. Netflix (NFLX) fell 3.86%; Alphabet (Google, GOOG) dropped 2.25%; Amazon was the biggest of the tech wrecks, dropping 38.90 points, a 5.76% loss.
WTI crude oil first rose, but came back to earth and was down for the day, finishing around 36.80 on the day.
S&P 500: 2,012.66, -31.28 (1.53%)
Dow: 17,148.94, -276.09 (1.58%)
NASDAQ: 4,903.09, -104.32 (2.08%)
While one day's trading cannot be considered anything more than market "noise," the historic sell-off of January 4 - the first trading day of the new year - proved to be the worst performance to start a year since 2008, and one of the top ten worst starts to a year in market history.
While stocks were down large in the US, they were worse in Asia and Europe. The Shanghai Composite was shaved by 6.9%, Japan's Nikkei tumbled nearly 600 points, a loss of 3.06%.
Germany's DAX was the hardest hit of Europe's majors, losing 4.28%. England's FTSE 100 fell 2.39; France's CAC-40 was down 2.47%.
In the US, most of the carnage was done by midday. Stocks drifted into the closing hour, and were boosted substantially off their lows by a face-ripping, short-covering rally in the last half hour of trading.
It was an unnerving beginning to a year which promises much in the way of surprises with limited upside for stocks, which have been and continue to be wildly overvalued.
Some of the bigger names were high on the list of losers. Netflix (NFLX) fell 3.86%; Alphabet (Google, GOOG) dropped 2.25%; Amazon was the biggest of the tech wrecks, dropping 38.90 points, a 5.76% loss.
WTI crude oil first rose, but came back to earth and was down for the day, finishing around 36.80 on the day.
S&P 500: 2,012.66, -31.28 (1.53%)
Dow: 17,148.94, -276.09 (1.58%)
NASDAQ: 4,903.09, -104.32 (2.08%)
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:
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.
Conclusions
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!
Closing prices for December 31, 2015:
Picks for 2016
Courtesy of Barron's, here are some of Wall Street's top strategists picks to click in 2016:
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.
Conclusions
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!
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