MMA Weekly Column: August 26, 2019

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Stocks fell on Friday after President Donald Trump ordered in a series tweets that U.S. companies find alternatives to their operations in China. “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing… your companies HOME and making your products in the USA,” Trump tweeted. “The threats always been out there but there’s been no need to provoke that,” said Art Hogan, chief market strategist at National Securities. “It’s almost like the administration was expecting the Fed to announce a rate cut at the Jackson hole meeting. And since Powell did not deliver, he went to defcon 5.” – Fed Imbert, “Trump Orders U.S. Companies to Look for Alternative to China,” https://www.cnbc.com, August 23, 2019.

Central banks are just getting started with monetary easing, hedge fund manager Kyle Bass said, predicting U.S. interest rates will keep falling and follow global interest rates all the way down to zero. “We’re the only country that has an integer in front of our bond yields. We have 90% of the world’s investment-grade debt. We actually have rule of law and we have a decent economy. All the money is going to come here,” Bass, founder and chief investment officer of Hayman Capital Management, told CNBC on Tuesday.– Fred Imbert, “Kyle Bass Says U.S. Interest Rates Will Follow the Rest of the World to Zero – “This is Insane,” https://www.cnbc.com, August 20, 2019.

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MMA Weekly Column: August 19, 2019

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The yield curve is blaring a recession warning. The spread between the U.S. 2-year and 10-year yields on Wednesday turned negative for the first time since 2007. Such a development has occurred ahead of each and every U.S. recession of the last 50 years, sometimes leading by as much as 24 months. “Historically, the 2-10 has had better predictive ability of recession than equities,” Sri Kumar, president of the Santa Monica, California-based Sri-Kumar Global Strategies, told Fox Business. Jonathan Garber, “Recession Indicator, with Perfect Record Flashing Red,” https://www.foxbusiness.com.

The contrast is absolutely exquisite.

As I sit here in the Castello di Montegufoni, a 12th century castle nestled in the rolling hills of Tuscany, Italy, listening to the sound of a gentle wind rustling the leaves of stately trees outside my window on a lazy Wednesday afternoon, while the sublime peach-colored light of the comforting Sun passes in and out of shadowy patterns forming across the splendid renaissance paintings on my ceilings and walls, I realize what a transcendent moment this is in my life. You see, I just got married to the most beautiful woman I have ever met, in the most perfect wedding ceremony, on a Rhine River cruise ship hired for this special event, consisting of 140 of the most beautiful people in the world – family and friends – that I know.

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MMA Weekly Column: August 5, 2019

Note: Due to travel, there will be no Free Weekly Forecast next week. However, if you are an active subscriber to any of our MMA Subscription Reports, keep an eye on your inbox for our annual Forecast pre-order sale starting this month. If you are not an active subscriber, you may want to consider taking out a subscription before August 12th to be part of this special sale.

The year 2020 is going to be an incredible cosmic year, which indicates a major shift and is likely to begin in world affairs, leadership, and financial markets. It’s not just a 1-2 year shift, this is the end and beginning of a 20, 60, 200, and 800-year cycle involving the Great Chronocrators, Jupiter and Saturn. To astrologers, this is known as the “Great Mutation.” You won’t want to miss this year’s Forecast Book and active subscribers to MMA Subscription Reports will get the best pre-order price we offer starting on August 12th.

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“What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, the European Union and other countries around the world,” Trump tweeted. But that’s not what the market got. At the press conference following the decision, Fed Chairman Jerome Powell said, “Let me be clear – it’s not the beginning of a long series of rate cuts.” Powell also added that he didn’t say there would be “just one rate cut.” – Jonathan Garber, “Trump Bashes Fed’s Rate Cut,” https://www.foxbusiness.com/, August 1, 2019.

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MMA Weekly Column: July 22, 2019

Note: If you are an active subscriber to any of our MMA Subscription Reports, keep an eye on your inbox for our annual Forecast pre-order sale starting next month. If you are not an active subscriber, you may want to consider taking out a subscription before August 12th to be part of this special sale.

The year 2020 is going to be an incredible cosmic year, which indicates a major shift and is likely to begin in world affairs, leadership, and financial markets. It’s not just a 1-2 year shift, this is the end and beginning of a 20, 60, 200, and 800-year cycle involving the Great Chronocrator, Jupiter and Saturn. To astrologers, this is known as the “Great Mutation.” You won’t want to miss this year’s Forecast Book and active subscribers to MMA Subscription Reports will get the best pre-order price we offer starting on August 12th.

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Stocks in the U.S. have had a good run this year, but that could end as soon as this quarter, said Jasslyn Yeo, global market strategist at J.P. Morgan Asset Management. That potential sell-off would be driven by a downward revision in earnings forecasts for next year, Yeo said. “In terms of timing, I think these two weeks will still be good for equity markets as we move into the Fed rate cut,” she said…After that expected Fed move, investors are set to turn their attention to other factors that influence stock prices, such as corporate earnings…“We think there could be a risk that (earnings) would head downwards,” – Yen Nee Lee, “J.P. Morgan Warns of Significant Sell-Off in U.S. Stocks This Quarter,” https://www.cnbc.com, July 26, 2019.

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MMA Weekly Column: July 22, 2019

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Iran’s Revolutionary Guard says it seized a British tanker Friday in the Strait of Hormuz… The move by Iran follows the seizure of an Iranian tanker earlier this month by the British Royal Marines on suspicion it was breaking European sanctions and taking oil to Syria. Iran has called for the release of that ship, and earlier Friday, a British court in Gibraltar extended the detention of the Iranian oil tanker. The move comes a day after President Donald Trump told reporters that the USS Boxer downed a drone belonging to Iran. Iran responded by saying it did not own the drone, and the U.S. may have shot down one of its own. Oil prices moved higher, with West Texas Intermediate up about 1% at $55.98 per barrel just before the close. – Patti Domm, “Iran Says It Captured a British Oil Tanker; Oil Prices Jump,” https://www.cnbc.com, July 19, 2019.

President Donald Trump weighed into a simmering debate over Federal Reserve interest rate policy, saying Friday that the central bank needs to end its “crazy” tightening moves. In a series of tweets, the president addressed an unusual controversy stemming from a speech Thursday that New York Fed President John Williams delivered. Market participants initially took Williams’ remarks as indicative that the central bank was prepared to cut rates aggressively, by perhaps a half a percentage point. But a Fed spokesman soon walked back the comments, causing confusion over where policy is headed. – Jeff Cox, “Trump Wades Into Debate Over Controversial Fed Speech Thursday,” https://www.cnbc.com, July 19, 2019.

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MMA Weekly Column: July 8, 2019

Note: There will be no weekly column next week due to travel. We will return the following week.

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Stocks fell from all-time highs on Friday after the release of stronger jobs data dampened hope for easier Federal Reserve monetary policy. The Dow Jones Industrial Average pulled back 43.88 points to 26,922.12, snapping a four-day winning streak. The S&P 500 slipped 0.2% to 2,990.41 and ended a five-day winning streak. The Nasdaq Composite fell for the first time in seven sessions, slipping 0.1% to 8,161.79. Earlier in the session, the Dow dropped as much as 232.67 points… The U.S. economy added 224,000 jobs in June. Economists had forecast the U.S. added 165,000 jobs in June, after a stunningly low 75,000 jobs were created in May, according to Dow Jones. – Fred Imbert, “Stocks Fall From Record Highs After Strong Jobs Report Dampen Hope of a Fed Rate Cut,” https://www.cnbc.com, July 5, 2019.

Despite a lack of strong geocosmic aspects last week, the Dow Jones Industrial Average and S&P index soared to new all-time highs, thus fulfilling the historical correspondence between Jupiter’s 12-year transit of Sagittarius and long-term cycle crests in world equity markets. However, the NASDAQ Composite fell slightly short of a new-time high. It rallied to 8171 on Friday, just shy of its record of 8176 on April 29.

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MMA Weekly Column: July 1, 2019

Note: The USA will be celebrating it Independence Day this week on Thursday, July 4. Markets will be closed July 4, and only open until 1 PM July 3.

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If Wall Street strategists are to be believed, though, the summit may not amount to much. While most agree that a cease-fire is the more likely outcome, at issue is whether Trump will delay imposing more tariffs. – Michael Bloom, “Here’s What Every Major Wall Street Bank Believes Will Happen at the Trump-Xi Trade Meeting,” https://www.cnbc.com, June 28, 2019.

“President Trump is my friend and I am convinced he is also not interested in this (breaking off trade talks)” On Wednesday, President Xi Jinping had already described Russian President Vladimir Putin as his “best friend.” David Reid and Holly Ellyatt, “President Xi Calls Trump His Friend and Says U.S. Won’t Disconnect With China,” June 7, 2019, https://www.cnbc.com.

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MMA Weekly Column: June 24, 2019

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Mr. Trump continues to believe that the Fed is the cause of slow growth, but he ignores the uncertainty created by his tariff policy. Will he cut a deal with China or impose 25% tariffs? The best economic policy occurs when each important actor does well with the levers it controls. That means the Fed should focus on stable prices while Congress and the executive keep taxes low and regulation limited. Mr. Trump can best help his own economic cause by ending the tariff uncertainty. – Wall Street Journal Editors, “A Split Fed Decision,” Wall Street Journal, June 20, 2019.

Here comes another opportunity for the President to close a deal. The cosmos is presenting another excellent time band, an opportunity for an agreement, between now and Labor Day. This is something he has come close to before, only to fail due to a pattern of trying to coerce the other side into caving in, rather than finalizing the negotiations with diplomacy and respect. This style has not worked, and it appears that Mr. Trump is realizing that as he has called off a speech by Vice-President Pence that was due to be given just before the G-20 meeting next week, just before President Xi Jinping and Trump were to meet. The speech was to predictably be critical of China once again. This tendency to publicly criticize the other side just before an important meeting has proven to be a non-starter, and surely would be again.

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MMA Weekly Column: June 17, 2019

Note: I will be teaching MMA Market Timing courses in Beijing this weekend. Hence, this week’s column is being written on Thursday, June 13, one day before normal. This column does not take into account Friday’s trading activity, June 14.

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Mario Draghi, the president of the European Central Bank (ECB) and Christine Lagarde, the managing director of the International Monetary Fund (IMF) warned that the global trade dispute between the U.S. and China as well as a threatened dispute with Europe and other industrial nations could cause headwinds for all and could get worse. Speaking at the 8th ECB conference focused on central, eastern and south-eastern European (CESEE) countries on Wednesday, the IMF’s Lagarde said “We meet at a moment when support for global cooperation and multilateral solutions is waning.” – Holly Ellyatt, “IMF’s Lagarde and ECB’s Draghi Warn Against Troubling Developments in Trade War,” https://www.cnbc.com, June 12, 2019.

Morgan Stanley’s Business Conditions Index, which captures turning points in the economy, fell by 32 points in June, to a level of 13 from a level of 45 in May. This drop is the largest one-month decline on record and the lowest level since December 2008 during the financial crisis, according to the firm. – Maggie Fitzgerald, “A Morgan Stanley Economic Indicator Just Suffered a Record Collapse,” https://www.cnbc.com, June 13, 2019.

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MMA Weekly Column: June 10, 2019

Note: I am abroad for courses the next two weekends. This column will be written on Thursday, one day before normal, while I’m here. This week’s column is written on Thursday, June 6, before the jobs report of Friday, June 7.

Falling bond yields are signaling a growth slowdown and the yield curve is inverted in what nearly always predicts a recession if it continues for three months. Mr. Trump seems to believe the Federal Reserve can make everything great again by cutting interest rates…. U.S. tariffs have a negative impact on growth around the world, which in turn hurts U.S. exports. … Mr. Trump and his Republican fellow-travelers say the doomsayers were wrong about the initial round of China tariffs, (but the) initial tariffs were dwarfed by the growth effects of tax reform and deregulation… (and) the damage from tariffs will rise if they increase in severity and are imposed impulsively. Sooner or later bad policies always exact a high economic and political cost. Wall Street Journal Editors, “Washington’s Anti-Growth Turn,” June 6, 2019.

Two new analyses show that the tariffs Mr. Trump is using to punish China, Mexico, Europe, and other governments would more than wipe out any gains from his $1.5 trillion tax cut for low- and middle-income earners. – Jim Tankersley, “Trump’s Tariffs Could Wipe Out Many Gains From His Tax Cut,” The New York Times International, June 5, 2019.

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