Stock Market Prediction

[highnote]

Originally Posted by PaceAdvantage

S&P new all-time high? Not quite I guess.but close....Interesting...

The trend is your friend. It has been a good run over the past 7 months

[ReplayRandall]

Interesting: Head of Deutsche Bank's Investment Division Resigned Today

FRANKFURT (Reuters) - Deutsche Bank's <DBKGn.DE> investment banking chief Garth Ritchie is stepping down, the bank said on Friday. The move, long speculated, comes as Deutsche prepares a broad multi-billion dollar overhaul that will see big cuts to the investment banking division.

https://finance.yahoo.com/news/deuts...123458169.html

As you may know, Deutsche Bank is the one financial institution that never fully recovered from the market collapse of 2008. There is some speculation of fraud/ or gross mismanagement -- and if that is the case, it would need to have gone on for more than a decade. It's also said that if DB goes bankrupt, it would take down the entire economy of Germany. Germany does not have the capital to bail out DB.

[highnote]

Germany should let the capitalist market take over and run its course -- and not do what the U.S. did and apply socialism to the financial institutions that were on the verge of collapse.

There would have been short term pain, but in the long run we'd all be better off with new financial institutions built on a solid foundation.

Why is socialism ok for big companies, but not for little companies?

I'm not a big fan of Bernie Sanders, but his op ed piece in the Wall Street Journal raises some interesting points.

Big banks got billions in bail out money and trillions in loans.

Meanwhile, the little guy filed bankruptcy on the house that the big banks lent him money on with a liar loan.

I have no sympathy for large corporations that cannot manage their affairs. I'm expected to manage mine. With all their available resources including brain power, I expect them to manage theirs.

[lamboguy]

Originally Posted by highnote

Germany should let the capitalist market take over and run its course -- and not do what the U.S. did and apply socialism to the financial institutions that were on the verge of collapse.

There would have been short term pain, but in the long run we'd all be better off with new financial institutions built on a solid foundation.

Why is socialism ok for big companies, but not for little companies?

I'm not a big fan of Bernie Sanders, but his op ed piece in the Wall Street Journal raises some interesting points.

Big banks got billions in bail out money and trillions in loans.

Meanwhile, the little guy filed bankruptcy on the house that the big banks lent him money on with a liar loan.

I have no sympathy for large corporations that cannot manage their affairs. I'm expected to manage mine. With all their available resources including brain power, I expect them to manage theirs.

the bailouts are nothing compared to what the financial institutions get in day to day welfare with the fractional banking system. everyone of us are paying the banks to make big money and still go bad. our countries financial system cannot last with fractional banking.

when Trump first started running for president, i asked him what he thought of fractional banking. he said if he got elected he would do away with it. he might be waiting to become a lame duck president to do this. if he does do it, it will be his biggest accomplishment because flat out, Republicans want no part of getting rid of fractional banking.

[ReplayRandall]

Look for the Dow to be down by 400 at close Monday....Deutsche Bank's the Catalyst

World news now:

Lira Crashes After Erdogan Unexpectedly Fires Turkey's Central Bank Governor

Just as glimmers of hope were starting to emerge that Turkey may finally crawl its way out of the deep hole it dug for itself last summer… and Erdogan happens.

The Turkish Lira has opened in early trading on 07-08, crashing over 16 handles…

So what will Erdogan do to support the Lira this time? Ziad Daoud, Bloomberg's Mideast economist pointed out:

“If Erdogan’s aim was to get lower interest rates, then the decision to replace the governor could backfire. Now there’s an additional credibility constraint, with financial markets certain to scrutinize the motivation and magnitude of any easing.”

More News:
https://www.zerohedge.com/news/2019-...grading-global

Morgan Stanley: "We Are Putting Our Money Where Our Mouth Is And Downgrading Global Stocks To Sell"

By Andrew Sheets, chief cross-asset strategist at Morgan Stanley

Over recent weeks, you’ve heard us discussing why we think investors should fade the optimism from the recent G20. Why we think bad data should be feared rather than cheered because it will bring more central bank easing. Why we think the market is too optimistic on 2019 earnings and is underestimating the pressure from inventories, labour costs and trade uncertainty.

The time has come to put our money where our mouth is. In light of these concerns and others, we are downgrading our allocation to global equities from equal-weight to underweight.

The most straightforward reason for this shift is simple – we project poor returns: Over the next 12 months, there is now just 1% average upside to Morgan Stanley’s price targets for the S&P 500, MSCI Europe, MSCI EM and Topix Japan (including dividends and equally weighted). If we ignore those targets and estimate returns for those same regions based on current valuations, adjusting for whether returns tend to be better or worse given current economic data, the upside is very similar (3%). There comes a point for every analyst where you need to change your forecast or change your view. We’re doing the latter.

[highnote]

SP over 3,000 with interest rate cut on the horizon.

Low interest rates came about because of fears of deflation and a depression following the 2009 financial crises. Next, low interest rates caused fear that there would be inflation. Inflation hasn't been a problem for the past 10 years that we've had low interest rates.

Unless of course, you’ve tried to buy a house in San Francisco, a stock market index fund, or a college education.

In reality low interest rates are causing the same kind of economic pain as high energy prices.

Federal Reserve policies have actually worsened wealth inequality by causing inflation in the prices of financial assets. If you were wealthy and owned them, great. If you're poor and would like to buy them, not great.

Conservatives used to worry about dovish Democrats taking over the Fed and cutting interest rates and bringing back the inflation of the 70s. Now the Republicans are the ones keeping interest rates low. Are they still concerned that deflation will cause a depression and therefore rates must be kept low until there is inflation?

As I said above, there is inflation in certain housing markets, stock index funds, and college tuition.

What happens next?

[reckless]

Originally Posted by highnote

SP over 3,000 with interest rate cut on the horizon.

Low interest rates came about because of fears of deflation and a depression following the 2009 financial crises. Next, low interest rates caused fear that there would be inflation. Inflation hasn't been a problem for the past 10 years that we've had low interest rates.

Unless of course, you’ve tried to buy a house in San Francisco, a stock market index fund, or a college education.

In reality low interest rates are causing the same kind of economic pain as high energy prices.

Federal Reserve policies have actually worsened wealth inequality by causing inflation in the prices of financial assets. If you were wealthy and owned them, great. If you're poor and would like to buy them, not great.

Conservatives used to worry about dovish Democrats taking over the Fed and cutting interest rates and bringing back the inflation of the 70s. Now the Republicans are the ones keeping interest rates low. Are they still concerned that deflation will cause a depression and therefore rates must be kept low until there is inflation?

As I said above, there is inflation in certain housing markets, stock index funds, and college tuition.

What happens next?

The bull market will continue in a upward trend as growth in the US economy will continue upward for a long while to come. The stock market will continue upward too, into the early summer of 2020.

The business 'journalism' chatter I've personally heard in recent weeks: growth is rapidly slowing, the inverted yield curve signals recession (pure fantasy), the tax cuts were ineffective and the sugar high from them is now ending. Trump must end tariffs now, Trump needs to make a deal with China now, and Trump must also stop tweeting (of course). Now!!

All this ignorance, basic stupidity and veiled partisan politics should be totally ignored.

With 10 year money at about 2.12 per cent ... with annual GDP growth at 3.0+ per cent ... with wages rising over 3 per cent ... with repatriation just kicking in ... with unemployment rates at 50-year and all-time low levels, there's no recession in site. Plus with the rest of the world primarily dead, economically speaking, the US markets are poised for another huge move from here.

There are great individual US companies that pay a 3.0+ per cent dividend and higher; companies that have grown free cash flow in double digits; have grown earnings and sales, and earn a juicy return on invested capital of 10-15 per cent plus ... and all sell at a reasonable 15-20 PE and less.

I wasn't joking nor guessing when I posted in early Nov. 2016 that we were in a generational buying opportunity in stocks. That was about 10 trillion dollars ago and it is still very far from over.

[Saratoga_Mike]

Originally Posted by reckless

Thanks Mike for the update. I kept mum on this ever since the deal was first announced. I knew some states have tried to put roadblocks up but I thought that was just about over.

Follow-up: NY state said no to the first application, and it now appears the FTC may be taking a more aggressive posture against M&A. Quad walking from LSC was an important sign, imo.

[reckless]

Originally Posted by Saratoga_Mike

Follow-up: NY state said no to the first application, and it now appears the FTC may be taking a more aggressive posture against M&A. Quad walking from LSC was an important sign, imo.

I've owned both companies for many years years so I stupidly didn't keep up on the news like I should have. I was getting a good price for Stewart, and I also love FNF, so this merger worked for me. A no merger works for me too.

Maybe when the TV business media stops talking about Tesla or the Cloud, and mentions the deal is off, there might be a selloff of STC and maybe FNF too.

I'll buy more of each if the price gets tempting. I think it will because the market almost always over does it.

Thanks for the update.

[Saratoga_Mike]

Originally Posted by reckless

I've owned both companies for many years years so I stupidly didn't keep up on the news like I should have. I was getting a good price for Stewart, and I also love FNF, so this merger worked for me. A no merger works for me too.

Maybe when the TV business media stops talking about Tesla or the Cloud, and mentions the deal is off, there might be a selloff of STC and maybe FNF too.

I'll buy more of each if the price gets tempting. I think it will because the market almost always over does it.

Thanks for the update.

On a potentially positive note, the DOJ has approved the Sprint/TMobile deal, with some divesture requirements (as expected). We'll see what happens with STC -- FNF's recent comments seem less committal.

[highnote]

With the August 1st interest rate cut my model is giving a BUY signal.

Monetary policy is favorable given low interest rates and reasonable consumer credit levels. Stock market momentum is pushing higher.

One concern is Trump's tariffs. Hopefully, the tariffs will be temporary. Another is the inverted yield curve of the 3mo and 10yr T-bill. However, the 30yr and 6mo and 20yr and 3mo are not inverted.

Other economic signs look good.

I'm long, but being cautious because of the tariffs.

[AltonKelsey]

I'm monitoring this thread for the timely SELL alert



I hate giving back more than 20% of my account value , 19 I can live with

[Saratoga_Mike]

Originally Posted by AltonKelsey

I'm monitoring this thread for the timely SELL alert

I hate giving back more than 20% of my account value , 19 I can live with

Insightful. Thank you.

[highnote]

Also the inverted yield curve is a concern. The rate cut actually caused it to become steeper. I doubt that was what the fed was hoping for.

[donmat]

Instead of relying on a single SELL signal I've been using Adaptive Asset Allocation. Rank the top 1 or 2 asset classes based on momentum each month and invest in them. Usually beats the S+P 500 but this year is under performing.