Good morning.
The stock market had a massive rally yesterday, fueled by the latest inflation read. With inflation running at 7.7 percent annualized, down from 8.2 percent, some progress is being made. The problem? With Fed rates just over 4 percent, real interest rates remain negative. Even today’s 30-year mortgage rates, at 7 percent, are still slightly negative in real terms.
To curb inflation, the Fed has to raise rates so that they’re positive after inflation. So rates are likely to keep trending up as inflation trends down.
That still points to a change next year, which should allow the market to finally flip from a bear to a bull. Until then, stay cautious, and use big market rally days like yesterday’s to get out of leveraged or poorly-performing trades.
Now here’s the rest of the news:
Tech Layoffs Sky-Rocket – Is The DotCom Bubble 2.0 Finally Here?
Last Friday, Elon Musk cut about half of the company’s workforce. That’s approximately 3,700 jobs. Many employees did not know until they saw their corporate access blocked. I saw some Tweets in which managers did not even know… [Read Here]
November 11, 2021
Good morning.
The data is in, and it’s not pretty. For six months in a row, inflation has been coming in at a rate well over 5 percent annualized. While September showed a promising slowdown in some areas, the October numbers showed that was simply a one-month move and not the broader start of a slowing inflation trend.
Investors are scrambling for the inflation protection of gold, as well as bonds, based on the declining yield curve there – a warning sign that high inflation rates could lead to enough of an economic pullback to cause a recession.
The rise of cryptocurrency is also picking up investor interest as a hedge against inflation. With the “inflation is transitory” narrative starting to collapse, it might be prudent for the Federal Reserve to act sooner rather than later, even if the stock market has to take a breather from its current rally. Traders may want to get cautious again.
Now here’s the rest of the news:
November 11, 2020
Good morning.
Since election day, the markets are generally up, but some major declines in the Nasdaq point to a significant underperformance in the tech space. That may be a sign that tech, which led markets higher this year, is finally pulling back and letting other sectors lead.
With many non-tech names still below their all-time highs, a shift to those relative underperformers may help push the markets higher while tech takes a step back. Value investors have seen their holdings underperform growth, or even a more balanced approach, for years. But eventually, even value stocks can lead the market, and we may be on the cusp of such a move if the current trend continues.
Now here’s the rest of the news:
On Monday, drugmaker Pfizer (NYSE: PFE) announced successful trial results for its COVID-19 vaccine candidate. The treatment was deemed to be “more than 90% effective in preventing COVID-19.” To be sure, that is wonderful news.
We also have been told that it may take six months or longer for the vaccine to become widely available. It must be manufactured, distributed, and administered to enough people to achieve herd immunity. The Pfizer treatment must be administered in two doses. The 90% level of protection from the virus is not achieved until one week after the second shot. That works out to 28 days from when the first dosage is administered.
November 11, 2019
Good morning.
Investors have been frustrated over the past few years thanks to the trade war. Every piece of bad news, even if just a rumour, has been enough to send stocks down. Every piece of good news, likewise, has sent stocks rallying. With the U.S. and China once again pushing towards a deal, and with a potential for that deal to fail yet again, it seems that nothing will change.
That’s also why it’s surprising that one of China’s top trade negotiators stated that they enjoy working with President Trump – and hope that he will be re-elected. The negotiator’s rationale? Trump makes the “decision-making process efficient and transparent, because he basically says what it is…”
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Lest We Forget!
Darren hardy shares a few words about Remembrance Day … Veterans Day in the US.
Here’s to all heros … and all people striving to be their best! 😉
