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  • Finance

    These Sectors & Companies Are Most Exposed To Higher Rates

    There are three main types of debt: household debt, corporate debt, and government debt. We think the most debate surrounds corporate debt because it is understood households have deleveraged this cycle and government debt has gotten worse. To be clear, there are debates on those categories because some say household debt in specific areas like autos and student loans are a problem and there are endless discussions about whether heightened government debt is a problem. With corporate debt, we know it can be a problem if it gets out of control, but the question is how bad the situation is. Depending on how you interpret the data, it can lo...
    On October 19, 2018 / By
  • Finance

    Moody’s Cuts Italy’s Debt Rating To One Notch Above Junk

    Five months after putting Italy on downgrade watch, Moody’s has seen enough and cut Italy’s debt rating to Baa3 – one notch above junk status.   Moody’s Investors Service has today downgraded the Government of Italy’s local and foreign-currency issuer ratings to Baa3 from Baa2. The outlook on the rating has been changed to stable, meaning that any downgrade to junk – the worst case scenario – has been taken off the table for the time being. Moody’s also downgraded to Baa3 from Baa2 the local and foreign-currency senior unsecured bond ratings. The foreign-currency senior unsecured shelf and M...
    On October 19, 2018 / By
  • Finance

    It’s A Slump Now

    If it wasn’t before, it is definitely a slump now. The National Association of Realtors (NAR) said today that the sales of existing homes across the US in September 2018 fell more than 3% seasonally-adjusted from August. At just 5.15 million (SAAR), that’s the lowest volume in almost three years. Hurricane Harvey had managed to disrupt a good chunk of resale activity in September 2017, and yet there is only Florence to blame for September 2018 which managed somehow to post significantly fewer home sales. Year-over-year, sales activity dropped by more than 4%. Economists want to make this about interest rates. That’s a big change from la...
    On October 19, 2018 / By
  • Finance

    Stocks And Precious Metals Charts – Markets Coiling For A Move

    Stocks had another ranging day, with a sweep from the highs to the lows. The SP 500 finished nearly unchanged with the tech-heavy Nasdaq a little weaker. All in all, it was a stock option expiration, and the market was looking for a direction. At this point, the right kind of trigger event is going to send this skittish market much lower. I am looking around the 2500’s on the SP 500 futures, so it could be quite a wild ride. But the lack of organic action and ‘investment’ buying, as opposed to short-term gimmickry, makes this a difficult market to trade.  Gold and silver finished largely unchanged as the Dollar gave up a li...
    On October 19, 2018 / By
  • Finance

    Hot Options Report For End Of Day – Friday, Oct. 19

    Data Courtesy of Trade Alert ...
    On October 19, 2018 / By
  • Finance

    China’s National Team Rescues Global Stocks As Yuan Tumbles, Gold Gains

    Quite a week where Chinese, European, and US Stocks take huge rollercoaster rides to end unchanged… (with th every visible hand of China’s National Team and the magically coincident sudden short-squeeze in the US)… China was looking seriously ugly on the week but the worst GDP (bar Q1 2009) print in the country’s history was just what The National Team needed to start a buying-panic in Chinese stocks…   And thanks to that momentum ignition from China, European stocks scrambled back to even on the week… (Italy ended down 1%)   But EU Autos were hit after Daimler…   But while US equities were aided b...
    On October 19, 2018 / By
  • Finance

    Market Talk – Friday, Oct. 19

    Another negative open today but fortunately was not to last! Although China’s GDP released lower than expected weekend book squaring and absolute levels helped revive values by the close, also helped by a little “authoritative” speech play. Growth came in at 6.5% YOY which was missed the 6.6% markets were looking for, but the Shanghai did rally 2.6% following supportive measures. Today’s bounce helped but remains 2.5% lower on the week. The currency still plays around the 6.93 level whilst many talk the magic 7 number. It remains 6.5% weaker on the year, but whilst the Shanghai is 23% lower YTD there is still a lot of work ahead o...
    On October 19, 2018 / By
  • Finance

    Shanghai Composite Down 30.12% Since January 26th

    Shanghai Composite – Weakness In China Let’s get back to possibly the biggest topic of the year. That is the crash in Chinese stocks and the weakness in its economy. The table below breaks down the Chinese market’s performance in the past year using the new sectors. As you can see, the median communication services stock is down 49% as investors are shirking growth. The median tech stock is down 44%. The financial sector has the highest weight as it is 25%. This means the 33% decline in median financial stocks has helped the index. Much is made about how the American stock market has outperformed because of its massive internet nam...
    On October 19, 2018 / By
  • Finance

    Thus Begins The End Of The All-Powerful U.S. Economy

    China Threatens More Than Just the U.S. Economy China and the interest rates are scaring investors. The U.S. economy has already started to feel the early cautionary tremors of a potentially heavy fall. The warnings are mostly for the hyper-valued (we passed the overvaluation point long ago) technology stocks, which led the 830-point-plus Dow Jones avalanche on October 11 as the Nasdaq lost four percent. iStock.com/Dilok Klaisataporn The End of the U.S. Economy’s Dominance Has Begun A new and more hostile chapter about U.S.-China relations and the cost of money (interest rates evidently) is about to be written. Investors understand that a m...
    On October 19, 2018 / By
  • Finance

    One Ring To Rule Them All

    My buddy Kuppy, who I’ve introduced you to many times before and who you can find hanging out here, wrote a piece last week. It’s a great piece and worth sharing.  Over to Harris now. One Ring To Rule Them All… Last week, US interest rates completed a multi-year reversal pattern and broke out over a three-decade downtrend line. I believe that interest rates move in generational cycles and the chart pattern has now confirmed a long-term trend towards higher interest rates. This trend is across the entire US duration curve and appears to have been followed by similar moves in many other global benchmarks. While I do not expect rates to...
    On October 19, 2018 / By