Economic Outlook

BlackRock Makes A Run On Asian Stocks

Posted by Tom Kool

on Friday, 10 July 2020 7:55

Now that BlackRock has largely taken over Wall Street, whispers from its corridors are heavily weighted, and the latest two are troubling: It’s downgrading U.S. stocks and prefers the Asian market.

In other words, the king of Wall Street says it’s time to diversify.

After major market movement that has seen U.S. equities bounce back from a dismal March, BlackRock sees a new surge in COVID-19 cases as likely to put a dent in this trend.

On Monday, BlackRock–which oversees nearly $6.5 trillion in global assets–downgraded U.S. stocks from neutral to overweight, and advised clients to start shopping internationally for diversification.

Why? Because the amazing performance of the U.S. equities market this summer has largely been propped up by trillions of dollars in government stimulus and the Federal Reserve’s effort to save the corporate bond market by buying the bonds.

Now, unemployment checks will dry up. More stimulus remains in question, and COVID-19 is no longer flattening–it’s reviving itself with a vengeance as Americans in large numbers decide they simply don’t care or are impervious to the virus.

What investors will be watching carefully is the next policy decision to come out of Congress and the White House about stimulus. If they announce there will be no more unemployment benefits when they end in three weeks, there could easily be an equities sell-off…CLICK for complete article

The Days Of Madness Are Upon Us

Posted by Bill Blain

on Wednesday, 8 July 2020 6:39

 

I used to think the “believe 6 impossible things before breakfast” line from Alice Through the Looking Glass was one of the funniest things ever written. Until this year.. I’ve come to understand it’s a statement of simple fact for this corona-addled age. I really can’t believe just how confused, conflicted, unfocused and distracted the various threads of society are becoming.

While the virus is still lashing its way around the globe – hitting the Southern Hemisphere in winter – it does feels like its passing. Look for what happens in terms of new cases and outbreaks in Oz over the coming weeks for potential clues about a second wave to hit the North come autumn.

The Pandemic has become the defining event of the decade. As it eases, there are a whole series of unexpected releases occurring. Not just in terms of surprisingly strong snapback economic numbers due to 3 months of repressed consumer spending, but also in terms of bizarre behaviours as tension eases. As the global economy tries to rebalance after the shock, it feels we’re being deluged in a sea of delusional noise and madness..

Let me try to explain… without using the word “unprecedented”. Full Article

 

Biggest Decline In Earnings…Ever

Posted by Lance Roberts

on Tuesday, 7 July 2020 9:09

 

Over the last quarter, the “Death of Fundamentals” has become apparent as investors ignore earnings to chase market momentum. However, throughout history, such large divergences between fundamentals and price have resulted in low future returns.

This time is unlikely to be different.

“During the second quarter, analysts lowered earnings estimates for companies in the S&P 500 for the quarter. The Q2 bottom-up EPS estimate (which is an aggregation of the median Q2 EPS estimates for all the companies in the index,) declined by 37.0% (to $23.25 from $36.93) during this period. How significant is a 37.0% decrease in the bottom-up EPS estimate during a quarter? How does this decrease compare to recent quarters?

During the past five years (20 quarters), the average decline in the bottom-up EPS estimate has been 3.2%. Over the past ten years, (40 quarters), the average decline in the bottom-up EPS estimate has been 3.4%. During the past fifteen years, (60 quarters), the average decline in the bottom-up EPS estimate has been 4.6%. Thus, the decline in the bottom-up EPS estimate recorded during the second quarter was much larger than the 5-year average, the 10-year average, and the 15-year average. 

In fact, this marked the largest decline in the quarterly EPS estimate during a quarter since FactSet began tracking this data in Q1 2002. The previous record was -34.3%, which occurred in Q4 2008.”

Full Story

Live Keystone Webinar: Stock Portfolio Ideas for the Next Decade – Dividends, Tech, Cash & More

Posted by Aaron Dunn

on Saturday, 4 July 2020 8:20

July 14th: 7:00pm Pacfic.
July 16th: 4:00pm Pacific.
CLICK Here to register

  • Find out what types of stocks to own for the next decade.
  • Tech Themes: cloud computing, cybersecurity, AI, IoT, remote work and more. Are Zoom, Slack and others too pricey or are they a must add to your portfolio?
  • Telemedicine & New Healthcare Opportunities: the shift to online and in home healthcare and where the opportunities may occur.
  • Alternative Energy & Green Investment Stocks: the shift from fossil fuels to green energy brings both threats and opportunities for power producers, energy infrastructure, storage, electric vehicles, and more.
  • Why cash rich, cash producing businesses and dividend growth stocks will be key for your portfolio success over the next decade.
  • Are there opportunities in beaten down segments such U.S. hospitality, travel & tourism, oil & gas or do they remain value traps?
  • Bonus Hot Topic: Is Day Trading Profitable Long-Term or Dangerous for Your Portfolio?
  • KeyStone will arm you with the research and tools to simplify, save on fees and create long-term wealth in a 15-25 stock portfolio – designed to benefit you, not your advisor.
  • Plus 5-6 stock picks to begin building your portfolio today including; 1) the best value in alternative energy, 2) the highest yielding gold related stock in Canada, 3) the best performing home healthcare stock, 3) a cloud computing giant, 4) an infrastructure stock for the next decade, 5) a great dividend growth stock and more…

The Bullish Test Comes As Earning Season Begins

Posted by Lance Roberts

on Friday, 3 July 2020 11:30

 

While we are certainly more bullish on markets currently, as momentum is still in play, it doesn’t mean we aren’t keenly aware of the risk.

Pay attention to what you own, and how much risk you are taking to generate returns. Going forward, this market will likely have a nasty habit of biting you when you least expect it.

Full Story