The stock market and economy

[3rdgensooner]

I'm hoping for a bear market if not a bit of a crash. I'm out of balance out of equities and don't want to buy at the end of this long of an expansion. I want some bargains. C'mon people panic already.

[zigbee]

I'm hoping for a bear market if not a bit of a crash. I'm out of balance out of equities and don't want to buy at the end of this long of an expansion. I want some bargains. C'mon people panic already.

Probably gonna happen.   That is the way it works.

[JamesWright]

It's hard to predict. But, if it's true that expansions don't die a natural death, we are seeing some of the causes with the Trump trade war. Not getting why businesses aren't steering Mr. Trump away from that course, or at least trying.

[cincydawg]

I'm kind of amazed how much I'm losing after selling so much earlier. I shouldn't be of course, but I thought I was more insulated to such sell offs. At some point it may be a buying opp, but I think not yet.

I still have a nice gain for the year even with pulling out what I need for expenses.

[Alabuckeye]

if we keep predicting a down turn....at some point we will be right....

[BoyGenius]

If you want to make money trading, develop tools and methods to help you manage risk, eg drawdown. Market Breadth is one tool... started deteriorating few weeks ago... more breakdowns than breakouts signaled to lighten up, get defensive, and prepare for buying opportunity. If you don't notice, you'll get get caught in the accelerated selling and when it's time to buy, most become defensive.

[cincydawg]

And already the NASDAQ turns positive.

Interest rates are really dropping, that isn't a good sign methinks.

[cincydawg]

With interest rates dropping dramatically, stocks with decent dividends start to look more appealing especially if they are somewhat "defensive" (a term I don't care for much as very few stocks fare well in a bear market). I'm staying away from REITs.

Of course, you can get a decent dividend of say 2.5% a year and watch the stock drop 10% or more and not be happy.

I can't understand why PG is as high as it is. They are supposedly "defensive", 2.6% dividend, I guess that's it. Widows and orphans ... it's moved from $90 start of the year to $116. I have a few October puts on PG as "insurance" of a sort.

[cincydawg]

[BoyGenius]

Trump can inflict more pain on China than China can inflict on the US.
China appears it's willing to suffer and wait for the results of 2020 elections rather than cave to Trump.
China has that luxury... they do not hold elections.

FORT COLLINS, Colo. (Reuters) - Corn exports fall off a cliff https://uk.reuters.com/article/us-usa-gr...KKCN1UW0MQ

• U.S. corn shipments fell to a 19-month low in June... exported 3.07 million tonnes of corn, the smallest June volume in six years
  
• U.S. soybean exports were record large for the month as shippers look to fulfill the large amount of outstanding sales to top buyer China.
  

[BoyGenius]

Record low yields on the horizon? Maybe, but when the investing world seems certain about X, the trend usually reverses.
Inflation? Fugetaboutit... the bond market says otherwise, in addition to the Fed's unrealistic 2% inflation target.
The weekly chart of 10yr treasury yield and SP500:

1. UST 10yr yield... red/black candlesticks.
   
2. SP500 price... solid black line.
   

The real issue is debt and servicing that debt. The global economy is choking on debt. I suspect QE4 or will it be QE5? QE6?... I've lost count... regardless, I suspect the next QE will be epic. The previous QE produced the current 10yr bull market. Eventually, the supply of greater fools will dry up and the global debt problem will have to be addressed and resolved.

[zigbee]

Record low yields on the horizon? Maybe, but when the investing world seems certain about X, the trend usually reverses.
Inflation? Fugetaboutit... the bond market says otherwise, in addition to the Fed's unrealistic 2% inflation target.
The weekly chart of 10yr treasury yield and SP500:

1. UST 10yr yield... red/black candlesticks.
   
2. SP500 price... solid black line.
   

The real issue is debt and servicing that debt. The global economy is choking on debt. I suspect QE4 or will it be QE5? QE6?... I've lost count... regardless, I suspect the next QE will be epic. The previous QE produced the current 10yr bull market. Eventually, the supply of greater fools will dry up and the global debt problem will have to be addressed and resolved.

The only way to resolve it is through restructuring debt or forgiveness and someone is going to lose.  Countries like Singagore who have their act together or some nations of Europe like Switzerland etc won't want to forgive or restructure or lose.  You can't blame them.
Our debt involves entitlements, social programs and defense.  I think the US is really about 100 trillion in debt when you add all of it up.

[cincydawg]

I don't usually try and read tea leaves about where things are headed in part because I have been wrong in the past often enough to realize I'm not good at it.  I will opine that things don't look good to me right now, meaning an economic slow down/recession looks more likely to me than it did January 1, perhaps this fall.

I am more bearish now than I was then, FWIW.  Futures today are odd a bit, not that much.  I see quite a few leading indicators that are lagging, like rail shipments etc.  The main thing was watching bond prices drop as fast as they did.  The ten year is under two percent now.

The retirees had a bit of cheer when interest rates moved up a bit, they could start seeing 2.3% returns on CDs for a bit, then boom.  Of course, your after tax return on 2.3% in real dollars is likely negative but you feel good.

A "normal recovery" would have us pushing inflation up by now, and interest rates with it.  I think this is keeping the stock market propped up as it were because dividend yields often are well above CD yields for the more staid stocks.  PG I think is trading on the dividend and their history of increases as a depression hedge.

[cincydawg]

And on cue, the market reverses and is up strongly on trade deal "news" on China.

[zigbee]

Someone explain this yield curve and dumb it down for me so I can get it.  I'm THINKING it means that investors don't trust a LONG term investment?   
https://www.cnbc.com/2019/08/13/us-bonds...iment.html