Instead of Treasuries, Investors Are Buying Foreign Stocks - Ep 1017

Why is Michael Bloomberg Actively Preparing to Enter the 2020 Presidential Race? I want to talk a little bit about Michael Bloomberg, entering the primary - and the reason that I think Michael Bloomberg is in. Bloomberg is now a Democrat, but he was a Republican.  He served as mayor of New York as a Republican for 2 terms. Then, I think he served a third term as an independent. But he was a Republican and now he's a Democrat. The reality is, he is a very middle of the road guy. He's a liberal Republican or a conservative Democrat. But conservative Democrats have not place in the modern Democrat party.  I think Bloomberg's motivation to throw his hat in the ring is the diminishing prospects of Joe Biden. Initially, everybody thought, "OK, Joe Biden's the guy." I think Michael Bloomberg was fine with a President Biden because it represented a continuation of the status quo and the status quo has been very good to Michael Bloomberg, do why wouldn't he want to continue that status quo? Socialists are Frankenstein's Monster Consuming the Democratic Party But with the rise of Elizabeth Warren and Bernie Sanders and the increasing likelihood that Warren could actually be the next President, I think that scares the hell out of Mike Bloomberg and I think it also scares the hell out of Mike Bloomberg's rich friends who are also Democrats. This is an example of Frankenstein and the monster. Baron Von Frankenstein created a monster and then Frankenstein's monster turned on its creator. And I think that's what these limousine liberals have done with the Democrat party. They have created this monster and now the monster is about to consume them. Rich Democrats Would Rather Re-Elect Trump Than Support Warren or Sanders I think what wealthy liberals are afraid to admit is, as much as they claim they don't like Donald Trump (and some of them don't like Donald Trump) they dislike Warren even more. A lot of these rich Democrats would rather see Trump re-elected than have Warren or Sanders elected. Now they don't want to come out and admit that, but they don't want to support a socialist. They're not that crazy - but they don't want the rest of the crazies in the Democratic party to know that. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

13 Nov 201946min

Better Luck Next Fall I just got back yesterday from the New Orleans Investment Conference, and I actually came to Connecticut for a few days; I really wanted to experience some of the fall foliage.  It's normally at its peak in the beginning of November. But, unfortunately we had a big storm here - a lot of rain, a lot of wind, and it knocked most of the leaves off of the trees.  So you know what they say about the best laid plans… hopefully I'll have better luck next fall. Stock Market High on Trade Rumors But as the leaves have been falling from the trees, stocks have been going the other direction.  Yesterday, all of the major stock market indexes hit new record highs. I think the catalyst, again, were rumors about a potential phase 1 trade deal. Of course, it really is ridiculous now.  What rallies the market is not the rumor of an actual trade deal but the rumors of a phony trade deal - a phase 1 deal which really isn't a deal at all. In fact, to the extent that anybody is even celebrating phase 1, what they really celebrating is that the trade war is over. That Donald Trump has basically surrendered without admitting that he has surrendered.  In fact a lot of the talk about what the Chinese even need to get the phase 1 deal is for all of the tariffs to be removed. Not just cancelling the future tariffs, but to take away all the tariffs that are already there, which, of course would be a relief for the American consumer, who, contrary to Donald Trump's claim, they're the ones who pay the tax - not the Chinese. Buy the Rumor, Sell the Fact… Again? But, basically, what the markets would really be celebrating, is if we went back to where we were before the trade war ever began. Of course, this is not a victory for the president if all the markets could hope for, is a return to the status quo, but again, once we get that deal - if we get that deal, it should be a "buy the rumor, sell the fact", especially since the fact is not going to live up to the height of the rumor. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

6 Nov 201947min

New Highs in the Headlines We had record high closes today in the S&P 500, the NASDAQ composite; the Dow Jones not quite a new record but still up better than 300 points: 301.13 to be precise. Of course, all of the headlines, and President Trump - they're going to be claiming that the reason that we had these surging stock prices is because we had a stronger than expected jobs report.  We got the October nonfarm payroll that came out this morning and it was better than was expected. You had Larry Kudlow out there talking about how this is a fantastic jobs report.  It basically shows how we have this great economy; the greatest economy in the history of America, and that's the reason that the stock market is making record highs, because we have this great economy. Economic Data was a Mixed Bag Well, first of all, the jobs report is really not that great.  Sure, it was stronger than expected, but that's not why the stock market went up today. We had other economic data that came out that was weaker than expected, so it was an overall mixed bag. In fact, the Atlanta Fed came out today and downwardly revised their forecast for Q4 GDP from 1.5% down to 1.1%, and I think the New York Fed is actually below 1% in its forecast for fourth quarter GDP. So hardly the strongest economy in history, yet the markets and President Trump are certainly celebrating like the economy is strong. Nonfarm Payroll up from an Upwardly Revised Previous Month But let me get to the tale of the tape first in the jobs report, because we were looking for a weak number. So the bar was pretty low. The consensus was for 90,000 nonfarm payroll jobs, and one of the reasons was because of the striking GM workers, so they were going to be subtracted from the numbers.  So that was already baked into the cake. We ended up getting 128,000 jobs, so nicely above those diminished expectations.  But probably more significantly, they went back and upwardly revised the number they told us for the prior month, which was originally reported at +136,000.  Now the government claims it was +180,000. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

2 Nov 201954min

The Fed Slashes Interest Rates for 3rd Time As expected, the Federal Reserve cut interest rates today.  This is the third rate cut of this cycle.  We're now down to 1.5%. But of course, what everybody has to remember is a year ago, when the Fed was hiking interest rates, the forecast from the Fed was that they were going to continue to hike rates.  They were supposed to have another 3 or 4 rate hikes in 2019.  And, of course, a year ago, as the Fed was hiking rates, they were still shrinking their balance sheet and they were going to continue to shrink it. They were talking about auto-pilot. They were going to continue to do $50 billion/month of quantitative tightening.  And they said this with a straight face.  And everybody believed them. Not a Surprise to Me Of course, everybody except me and maybe a few other people out there in the financial media. But I was telling anybody who would listen - which was not that many people in the mainstream, but certainly the people who listen to my podcasts, that none of this was going to happen. I said that the Fed was going to have to stop hiking rates, and that they would be cutting rates in 2019, and that not only were they going to stop quantitative tightening, that they were going to have to go back to quantitative easing. And that's exactly where we are. A Distinction without a Difference Although, Jerome Powell went out of his way - I think the first thing that he said when he made his prepared remarks - was to reassure everybody that what the Fed was doing now, with its repo program was not quantitative easing. He drew a distinction between what the Fed was doing when it was doing QE and what it is doing now when it is not doing QE.  The main distinction had to do with the maturities of the debt that the Fed was buying.  He said that when they were doing QE, they were buying longer term government bonds, but that now, they're buying shorter term government bonds and so therefore it's not QE. But this is really a distinction without a difference. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

31 Okt 201947min

I am Back! I am back! I know a lot of people have been upset that I haven't been able to do a podcast in almost 2 weeks. The reason I've been absent… I just haven't been feeling well.  I've been coughing a lot and and haven't been up for doing a podcast - I'm doing one today, though.  I'm still a little bit sick… but I figure it's been long enough, so I have to talk a little bit about what's on my mind. Dollar Index Trending Lower First of all, there hasn't been that much activity, I guess, in the markets over this time period. The U.S. dollar has generally been weaker.  It has been trending down.  It hasn't really broken down yet, but it is going lower.  In fact, the dollar index closed today near 97.69. so that is lower than it had been.  Remember, a few weeks ago, the dollar index was above 99. So the dollar is trending lower. Interest Rates Up - Bond Prices Down Interest rates are actually moving higher.  Bond prices are going down.  The yield on the 30-year U.S. Treasury now is at 2.26, and I think this is significant because it really shows the problems that are building in the economy because the dollar is weakening and interest rates are rising. That is going to mean higher consumer prices, it's going to mean higher borrowing costs; now of course, the Federal Reserve is doing everything it can to artificially suppress interest rates. One of the stories that I've read several times over the last couple of weeks is how the Federal Reserve is having to do more repurchase agreements; having to increase the size of the amount of Treasuries they're buying in the market. I didn't see that in today's balance sheet numbers; the balance sheet was up only about 2 billion over the prior week.  But I have a feeling that the number is going to be much, much higher than that when we get it a week from today. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

25 Okt 201953min

Don’t miss my upcoming appearances: The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 Dow jumps 300 points U.S. stocks finished out the week on a strong note; in fact we broke a 3-week losing streak. This was the first time in 4 weeks that the major averages finished higher on the week. When I recorded my podcast earlier in the week, the week was off to a rough start. But we had a turnaround.  In fact, today the Dow Jones was up 319 points on the day - about a 1.2% gain. The NASDAQ was up even more; 106 points, that's 1.34%.  The Russell 2000, even better, up 1.8%.  The Dow Transports were the stars of the day.  They were up 2.23% - 224 points.  Look at stocks like Apple, rising almost 3% to a new all-time record high. Rumors and News Driving the Market There was a lot of news driving the market today. Initially, we got rumors of some type of Brexit deal that potentially was imminent. Of course, there have been all sorts of rumors that have never panned out regarding a Brexit deal. But this morning, there was a rumor that really was causing a lot of buying in the European markets and that spilled over into the U.S. futures, which helped the U.S. market.  And of course there was a lot of brewing optimism over some kind of impending trade deal with China, although that news didn't come out until very close to the close. U.S. Consumer Sentiment Climbs to 3-Month High in October But, earlier in the day, we got the Consumer Sentiment number for October, and the markets are already higher by the time we got this release, which comes out at 10am; the market opens at 9:30. The prior month was 93.2, and the consensus was for a slight drop in consumer sentiment to 92.  After all, there are a lot of reasons for consumers to be less optimistic now than they were back then. But the consumer… surprise - ended up being more optimistic. The number came out at 96 and that sent the price of stocks much higher. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

12 Okt 201936min

Don’t miss my upcoming appearances: The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 Another Weak Day in the Equity Market We had another weak day in the equity market, so the 4th quarter is starting off on a particularly sour note. The Dow, down 314 points today. Technically speaking, closing right near the lows: down 1.2%. NASDAQ had a much worse day, down 132 points - that's 1.67%.  Russell 2000, similarly beat up: 1.7%, down 25 points.  The Transports really took it on the chin. They down 1.85%. 185 points down on the Transports. The money losing stocks, the recent IPO's continue to get beat up. The real debacle du jour was Smile Direct. That one was down another 15% today: down $2 - it closed at $11.34 right off the new low of $11.20.  Remember, this stock came public less than 2 weeks ago and it was $23 a share.  The highest it actually traded was $21.10. Now we're down better than 50% from the IPO. Fed: QE but not QE But I really don't want to spend a lot of time talking about the markets today.  In fact, I only want to talk about one thing, and that's the Fed and the return to Quantitative Easing . I wasn't even going to do a podcast today; Yom Kippur starts in a couple of hours so I was just going to skip it. In fact, I wasn't even going to do one tomorrow - I was probably going to wait until Thursday. But then I was watching this press conference with Jerome Powell where basically the Fed came out and said they were doing QE, except they said they weren't doing QE. "Increasing Securities Holdings to Maintain an Appropriate Level of Reserves" There's an old saying: "Never believe something until it's been officially denied. Jerome Powell went out of his way today in his statement and in the Q and A that followed to emphatically say that the Fed is not doing QE. This is an exact quote from Powell: "This is not QE.  In no sense is this QE."  Except, in every sense it's QE, because it's exactly QE.  There's also an old saying," If it walks like a duck, it looks like a duck and it quacks like a duck, it's a duck." Well, this looks like QE, it smells like QE, it quacks like QE, it walks like it… it is QE! What is the difference between QE and what the Fed is now doing? I wish someone would really ask that question.  In his prepared remarks, this is what Powell said: “As we indicated in our March statement on balance sheet normalization, at some point, we will begin increasing our securities holdings to maintain an appropriate level of reserves,” he said. “That time is now upon us.” Already? In March they said that "at some point"?  Did anybody back then think "some point" meant "NOW"? Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

9 Okt 201927min

Don’t miss my upcoming appearances: The Dallas Money Show October 13-14 and the New Orleans Investment Conference, Nov. 1-4 The Weakest First Two Days of Any Quarter Since 2008 Before I get into what happened with today's nonfarm payroll number and the 372.68 rally in the Dow that it helped spark, I want to back and talk about what happened on Wednesday and Thursday, which were the 2 days following my Tuesday podcast, from the first day of the 4th quarter of the year. On Wednesday, the market sold off sharply, in fact at one point we were down better than 600 points on the day. We managed to close down just under 500 - 494 points.  At that point, the first 2 days of the 4th quarter of 2019 were the weakest first 2 days of any quarter - not just a 4th quarter - but of any quarter going all the way back to 2008, which was the year the market imploded because of the '08 financial crisis. Weakness in Private Sector Jobs One of the data points that came out on Wednesday that may have been a contributing factor - but probably not - was the ADP employment number, which is an early look at the official numbers that came out today.  This is just the private sector, which is certainly weaker than the government sector, and I'm going to get into that when I discuss today's numbers later in the podcast. But, the estimate was for 152,000 jobs created in the private sector and we only got 135,000.  But, not only that, there was a downward revision to the prior month, from 195,000 to 157,000.  So, this was additional evidence of economic weakness that was weighing on the market. IPO's Cancelled Due to Insufficient Investor Demand Also, again we had the follow over from what I had pointed out on my podcast not only on Tuesday, but on Friday the prior week regarding the weakness in the newly publicly traded companies - money losing companies - the fact that some of these companies had to cancel their IPO's due to insufficient investor demand. All of that was weighing on the market and helped produce that sharp decline. ISM Non-Manufacturing Down A Lot - Not Just a Little Bit And when we got into the market on Thursday, the market had opened initially a little bit higher.  But then as soon as we got the ISM non-manufacturing number (remember, we had gotten a very weak manufacturing number and was part of the reason we had the big decline earlier in the weak) but now we got the ISM non-manufacturing number and this number was forecast to come in at 55.5.  This would have been a reduction in the 56.4 that we had for August.  But instead of going down a little bit, the number went down a lot - all the way down to 52.6. Our Sponsors: * Check out TruDiagnostic and use my code GOLD20 for a great deal: https://www.trudiagnostic.com Privacy & Opt-Out: https://redcircle.com/privacy

5 Okt 201949min