Economic Outlook

Moon richer in metals than previously thought — NASA

Posted by Cecilia Jamasmie

on Monday, 6 July 2020 8:00

Plans to start mining the Moon as early as 2025 became more attractive this week after a US National Aeronautics and Space Administration (NASA) team found evidence that the Earth’s natural satellite may, underneath its surface, be richer in metals than previously thought.

Using data from the Miniature Radio Frequency (Mini-RF) instrument onboard NASA’s Lunar Reconnaissance Orbiter (LRO), a team of researchers came to the conclusion that the lunar subsurface contains higher concentration of certain metals, such as iron and titanium, than estimated. The study, published in the journal Earth and Planetary Science Letters, contends the most popular theory surrounding the Moon’s origins. The hypothesis contends the satellite was formed when a Mars-sized object collided with Earth, vaporizing large portions of the Earth’s upper crust…CLICK for complete article

15-Investing Rules To Win The Long-Game

Posted by Lance Roberts

on Tuesday, 30 June 2020 8:55

It is times, such as now, where logic states that we must participate in the current opportunity. However, emotions of “greed” and “fear” cause individual’s to take on too much exposure, or worry they have too much and a crash could come at any moment. These emotionally driven decisions tend to lead to worse outcomes over time.

As Howard Marks’ stated above, it is in times like these that individuals must remain unemotional and adhere to a strict investment discipline. It is from Marks’ view on risk management that I thought sharing the rules that drive our own investment discipline. 

I am often tagged as “bearish” due to my analysis of economic and fundamental data for “what it is” rather than “what I hope it to be.” In reality, I am neither bullish or bearish. I follow a very simple set of rules which are the core of our portfolio management philosophy. We focus on capital preservation and long-term “risk-adjusted” returns…CLICK for complete article

Technically Speaking: Bulls & Bears Square Off At The Line

Posted by Lance Roberts

on Tuesday, 16 June 2020 11:39

Bulls & Bears Clash At The Line

On Monday, the bulls and bears fought over the 200-dma. It seemed at the open as if the bears were close to taking control of the market. However, the tide quickly turned. With markets plunging again at the open, and with Jerome Powell’s personal fortune on the line at Blackrock, the Fed took quick action:

Here is the aptly timed press release putting causing bulls to “rush back in:”

The Federal Reserve Board on Monday announced updates to the Secondary Market Corporate Credit Facility (SMCCF), which will begin buying a broad and diversified portfolio of corporate bonds to support market liquidity and credit availability for large employers.

As detailed in a revised term sheet and updated FAQs, the SMCCF will purchase corporate bonds to create a corporate bond portfolio based on a broad, diversified market index of U.S. corporate bonds. This index is made up of all the bonds in the secondary market that U.S. companies have issued to satisfy the facility’s minimum rating, maximum maturity, and other criteria. This indexing approach will complement the facility’s current purchases of exchange-traded funds.

The Primary Market and Secondary Market Corporate Credit Facilities were established with the Treasury Secretary’s approval and $75 billion in equity provided by the Treasury Department from the CARES Act.”

The Fed’s announcement was unnecessary as it only repeated the original mission of the SMCCF. The made made no changes to the program, but with prices off steeply Monday morning, it seems as if the Fed needed a “quick fix” to prevent a larger downdraft.

The good news is the bulls were able to defend the 200-dma once again successfully. However, the bears aren’t quite ready to give up just yet.

The Bull’s Case

The bullish case for the market is pretty thin.

  1. Hopes are high for a full reopening of the economy
  2. A vaccine
  3. A rapid return to economic normalcy.
  4.  2022 earnings will be sufficiently high enough to justify “current” prices. (Let that sink in – that’s two years of ZERO price growth.)
  5. The Fed.

In actuality, the first four points are rationalizations. It is the Fed’s liquidity driving the market…CLICK for complete article

History Suggests Record 50-Day Stock Market Rally May Be Just The Beginning

Posted by Wayne Duggan

on Friday, 5 June 2020 8:35

The S&P 500 has gained a record 39.6% since it hit its 2020 low back on March 23. Not only has that rally erased much of the year’s COVID-19-related losses, it’s also the best 50-day stretch in the history of the market.

After such a strong rally, traders are understandably getting uneasy the market is overbought and due for a pullback. However, from a purely historical perspective, the strongest 50-day periods have generally led to even more gains over the year that follows, according to LPL Financial Senior Market Strategist Ryan Detrick…CLICK for complete article

Anyone hoping for a semblance of a normal economy might be left waiting

Posted by Michelle Zadikian, BNN Bloomberg

on Tuesday, 26 May 2020 7:40

Rosenberg also warns the return of consumer spending will likely be hampered by high debt loads, especially in Canada, where alarm bells were already sounding over the problem before it entered the COVID-19 economic crisis.

He also believes it’s almost a certainty Canada will lose its coveted AAA credit rating as government relief programs dramatically increase the country’s liabilities. click here for full story