Stocks & Equities

Investors Should Be Worried About Tech Stocks

Posted by Fred Dunkley

on Friday, 15 January 2021 9:41

Even though stock market went pretty untouched following the last week’s debacle in Washington, DC, when pro-Trump rioters breached The Capitol, there could very well be consequences–at least for the tech companies that have long been behind the market rally.

In the wake of his support for the mob that stormed the Capitol, Trump’s social media accounts have been locked and banned.

Facebook, Twitter, Instagram, and YouTube all took steps to restrict Trump’s ability to use their platforms, some for good.

PayPal also shut down an account raising funds for Trump supporters who traveled to Washington, DC.

Then, Amazon suspended the pro-Trump social network Parler from its web hosting service, while Apple and Google removed Parler’s app from their stores.

All of that raises some questions about our tech giants in a time of political crisis, and stock prices are potentially starting to reflect that.

Following the riot, the Dow closed up 437 points, or 1.44%, to 30,829, and the S&P 500 gained 0.57% to 3,748. Both the Dow and S&P 500 reached record intraday highs following Congress’ confirmation of Joe Biden’s presidential election win.

But on the flip side, tech companies sold off heavily on Monday, with Twitter tumbling over 6%, Facebook 4%, and others around 2%.

Americans seem unsure which beast they want to let out of its cage here–a situation that will continue to add to the uncertainty…

Gold Telegraph Weekly Rundown: January 10, 2021

Posted by Gold Telegraph

on Wednesday, 13 January 2021 8:23

We are off to a wild start in 2021.

From the development of central bank digital currencies to the volatility in debt markets, things are only getting more interesting from a macroeconomic perspective by the day.

We have had numerous people ask us what the sell-off in gold on Friday was driven by, and it was due to the rise in yields in debt markets. We believe this will be short-lived as central banks globally understand that they must keep real rates negative for a prolonged period to help service costs to keep debt manageable.

The major theme for gold this year will be major financial repression.

For our readers new to the economic world, financial repression means:

“Financial repression is a term that describes measures by which governments channel funds from the private sector to themselves as a form of debt reduction. The overall policy actions result in the government being able to borrow at extremely low interest rates, obtaining low-cost funding for government expenditures”

This is the type of economic environment we will be in for the foreseeable future. In fact, central banks are already signaling this with the testing of digital currencies. They are building the infrastructure which will enable them to seamlessly put their economies on universal basic income while financial repression helps with the deleveraging process…CLICK for complete article

Intel Shares Hit 6-Month High As Chipmaker Replaces CEO

Posted by Shanthi Rexaline

on Wednesday, 13 January 2021 8:19

Intel Corporation shares are soaring to their highest level since late July Wednesday following the company’s announcement of a transition in the C-suite.

What Happened: Intel said CEO Robert Swan will leave Feb. 15, with VMware, Inc. CEO Pat Gelsinger taking over.

The announcement brings to an end Swan’s two-year tenure at Intel as CEO. Swan took over the role on an interim basis in June 2018, replacing then-CEO Brain Krzanich, and was later confirmed as the full-time CEO in January 2019.

Swan previously served as the CFO of the chip giant.

Gelsinger has over four decades of technology and leadership experience, including 30 years at Intel, where he began his career.

“After careful consideration, the board concluded that now is the right time to make this leadership change to draw on Pat’s technology and engineering expertise during this critical period of transformation at Intel,” Omar Ishrak, independent chairman of the Intel board, said in a statement…CLICK for complete article

Investing Pros And Cons Of A Blue Washington

Posted by Wayne Duggan

on Friday, 8 January 2021 8:26

The SPDR S&P 500 ETF Trust rallied once again on Thursday, and investors are clearly feeling optimistic about the economy’s near-term outlook after Democrats successfully gained control of the Senate earlier this week.

While a Democratic “blue wave” in Washington is certainly bullish for the market in several key ways, Commonwealth Financial Network chief investment officer Brad McMillan said Wednesday there are both pros and cons to Democrats running the show.

Blue Wave Pros: The biggest near-term pro for investors is that Democrats now have a clear path to more aggressive stimulus measures, including the possibility of $2,000 stimulus checks. McMillan said the federal government would likely also provide much-needed help for state and municipal governments.

In the longer term, McMillan said investors can expect increased infrastructure spending and more constructive trade policy following four years of isolationist policies from the Trump administration.

Blue Wave Cons: While Democratic policies could serve as a major tailwind for many companies, the impact of the blue wave is not all positive. CLICK for complete article

The Fed is Juicing Stocks

Posted by Michael Lebowitz

on Thursday, 7 January 2021 9:59

We came across the following bullet points from a Seeking Alpha article titled- The Fed is not Juicing the Stock Market.

  • It makes for a great headline, but the Fed is not the cause of this rally.
  • Every dollar the Fed has pumped into the economy is spoken for, and it is not in equities.
  • The truth is a lot more boring and scary than the conspiracy theory.

After explaining how the Fed is not culpable for rising stock prices, the author ends the article with the following challenge: “So please, I invite anyone to explain to me, like I was a 5-year-old, what exactly is the mechanism that explains “the Fed is juicing the market,” when we know exactly where all the Fed’s money is, and we know that it isn’t in the market.”

We are always up for a challenge.

The following article describes four ways in which the Fed juices the stock market.

Draining the Asset Pool

The Fed conducts monetary policy by governing the Fed Funds Rate. To do this, they buy and sell Treasury securities via open market operations. When the Fed wants to lower rates, they buy Treasury debt. In doing so, they reduce the supply of investible debt, making remaining debt more expensive (lower yield). They most often buy or sell short term Treasury Bills to affect the short term Fed Funds rate. Open market operations also add or drain the banking system’s liquidity to help further hit their target.

More recently, with Fed Funds at zero percent, they have conducted QE or large-scale asset purchases. These operations help manipulate rates across the maturity curve and not just Fed Funds. QE, as with traditional open market operations, reduces supply, boosts prices, and lowers yields.

With knowledge of the Fed’s modus operandi, let’s go swimming…CLICK for complete article