Economic Outlook

Market Correction Goes Viral, Is It Time To Buy?

Posted by Lance Roberts

on Monday, 3 February 2020 10:59

Over the last few weeks, the message from the newsletter has been repetitive:

“The markets are overbought, overextended, overly complacent. A correction is coming so reduce and rebalance portfolio risks.” 

Despite those issues, the markets continued to push higher leaving readers with the assumption the “warnings” were wrong.

As noted last week, there have only been a few points over the previous 25-years where investors were so extremely lopsided in their positioning.  We have shown many charts of investors being “all in” to equities over the last three weeks, but here is the latest Fund Manager’s Survey, which shows cash balances at 6-year lows.

The importance of these measures is not meant to be a “timing” signal to buy or sell positions. These measures are more valuable when thought about as an “accelerator” in a car. When markets are rising, investors press down on the accelerator, taking on more equity risk. As long as the road is straight, and visibility is good, it seems there are no consequences for driving at high speeds. However, if the road suddenly turns, or a hazard presents itself, bad outcomes happen very quickly….CLICK for complete article

Here’s How Much Investing $100 In Google Stock Back In 2010 Would Be Worth Today

Posted by Wayne Duggan

on Monday, 3 February 2020 10:53

Investors who owned stocks in the 2010s generally experienced some big gains. In fact, the SPDR S&P 500 total return for the decade was 250.5%. But there’s no question some big-name stocks did much better than others along the way.

Alphabet’s Big Decade

One of the market leaders of the past decade was search giant Alphabet, Inc.

Alphabet started the 2010s as Google, and its first major move of the decade was a $12.5 billion buyout of Motorola Mobility in 2011. The deal helped protect Google from patent disputes with Apple, Inc. and Microsoft Corporation and helped Google continue to provide its Android mobile operating system. Google restructured its business as a conglomerate under the Alphabet umbrella in 2015. Former Google CEO Larry Page took over as CEO of Alphabet, with Sundar Pichai taking over as Google CEO.

The 2010s were defined by high growth and rising costs in Google’s core online advertising and search businesses, as well as expansion into Google Cloud services. Unfortunately, Google also drew increasing scrutiny from regulators for its data usage and potential antitrust violations. In June 2019, the U.S. Justice Department reported it’s investigating Google on antitrust grounds….CLICK for complete article

Millennial Stock Picks Beating The Market

Posted by Alex Kimani

on Friday, 31 January 2020 11:44

Millennials have been labeled many things: lazy, entitled, narcissistic among other unflattering terms. They have also been accused of being highly risk-averse, preferring flashy investments like crypto over slow-n-steady ones like stocks and bonds.

Yet, millennials are proving some of these platitudes wrong.

This demographic of young adults born between 1981 and 1996 is proving to be savvy stockpickers, managing to outperform more seasoned investors.

But for how much longer can millennials trounce the market?

Millennial Stock Picks Beating The Market

Apex Clearing recently published its Q4 2019 Millennial 100 Report. The report analyzed more than 734,000 stock portfolios by US-based millennials with an average age of just over 31.

Young adults have been known to let their tastes largely dictate their investments, with many favoring the next big thing–mostly young and sexy tech stocks. Yet, this gung ho attitude towards investing seems to be serving them right.

As you might expect, the list of preferred stocks by millennials is FAANG heavy, which comes as no one’s surprise given that many companies in the group have proven to be the quintessential momo plays. Apple and Amazon emerged as the top picks making up 13.5% and 11.2% of their overall holdings. Other heavily favored names include Tesla, Facebook and Microsoft, in that order…CLICK for complete article

“SARS” Versus “Wuhan”: The Difference Between “Now & Then”

Posted by Lance Roberts

on Thursday, 30 January 2020 11:26

A week dominated by headlines of a spreading respiratory virus has had investors recalling pandemics past, from SARS in 2003 to the Ebola scare six years ago. While the “Wuhan” virus, or known scientifically as “nCoV,” is still in its infancy, it is closely tracking both the infection and, unfortunately, death rates of the SARS virus.

However, the question everyone wants an answer to is: “what does the virus mean for the markets?”

Will it derail the longest bull market in U.S. history? Or, is it nothing to worry about? 

If you read the mainstream media, the answer seems to be the latter. To wit:

“However, gauged by the market’s performance during the onset of other infectious diseases, including SARS, or severe acute respiratory syndrome, Ebola and avian flu, Wall Street investors may have little to fear that this disease will sicken a U.S. stock market that finished 2019 with the best annual return in years and has kicked off 2020 at or near all-time highs.” – MarketWatch

With the stock market perched near all-time highs, it is understandable investors are quick to dismiss the potential ramifications of the virus very quickly. There is also plenty of anecdotal evidence to support the bullish claims as well. The chart below is the S&P 500 index versus its exponential growth trend with a history of the more important viral outbreaks notated…CLICK for complete article

Oil Teetering On The Brink Of Bear Market On Coronavirus Fears

Posted by Tsvetana Paraskova

on Thursday, 30 January 2020 11:21

After a brief reprieve earlier this week, oil prices tumbled again on Thursday, approaching a bear market, as fears spread that the coronavirus outbreak in China would depress oil demand, at least in the short term.

At 10:52 a.m. EDT on Thursday, WTI Crude was down 2.38 percent at $52.06 and Brent Crude was trading down 2.39 percent at $57.52, both flirting with bear market territory.

Even with Libya’s oil production plummeting by nearly 1 million barrels per day (bpd) due to the port blockade by forces loyal to General Khalifa Haftar, oil prices have seen downward pressure over the past week and a half as fears of oil demand destruction currently outweigh supply outages.

Yesterday’s EIA inventory report was also not supportive for oil prices, after the Energy Information Administration reported a build in oil inventories of 3.5 million barrels for the week to January 24. Analysts had expected a draw of 460,000 bpd, after last week the EIA reported a draw of 400,000 bpd for the seven days to January 17. CLICK for complete article