What to Expect In the Final Quarter This Year

What to Expect In the Final Quarter This Year

We’re finally coming to a close for 2015, and the final quarter will be the conclusion to a year that’s been defined by uncertainty and uneven performances. Mixed economic data haven’t given investors a clear vision of what the future will look like, while other regions around the world have shared in a global economic slowdown that finally culminated in a collapse in the Chinese stock market last quarter.Volatility, which had remained relatively muted for most of the year, soared at the end of August through early October and could spike yet again before we see the end of the year. Of course the biggest news so far this year is the surprising move by the Fed to hold interest rates steady despite widespread belief by Wall Street that rates would be rising this year. While the Fed will meet again in December, based on lackluster data, it seems more likely that rates won’t see a lift until the end of the first quarter in 2016 at the very earliest.Unemployment is a bright spot in the economy at just 5.1% as of September’s numbers but is somewhat mitigated by stagnant wages and persistently low inflation. GDP growth for the first quarter was revised higher to 0.6% while growth for the second quarter came in slightly higher than originally expected at 3.9%. We’ll have to wait to see what the figures for the third quarter will be, but so far it seems to indicate that the economy is actually still in a growth stage but at a much slower rate than investors want.The Big PictureIt’s too soon to know what...
What We Need To Happen For The Fed To Raise Rates

What We Need To Happen For The Fed To Raise Rates

Article SummaryThe Fed has made conflicting statements regarding the upcoming rate hike which has added volatility to the markets.Inflation and jobs are the key figures that need to improve before we see a rate increase.A delay in the Fed decision to raise rates hasn’t been overall negative for the markets and could actually contribute to more growth before the end of the year.It’s been roughly one year since the Fed ended its historic quantitative easing program and gave control of the economy back over to the free market. With those memories of a Fed driven market still fresh in investors’ minds, it seems that the Fed is once again in control of this market’s destiny. Markets are quickly retreating to a “wait and see” trading mentality when it comes to Yellen, which is contributing to a rise in uncertainty and volatility in the broader averages… Read full article at Seeking...
Understanding The Difference Between A Correction And The Start Of A Recession

Understanding The Difference Between A Correction And The Start Of A Recession

Article SummaryStocks have fallen about 10% off their highs but haven’t yet hit the 20% decline marker that defines a recession.Economic data are mixed but no indicator is clearly flashing a recession signal yet.The yield curve is one of the most reliable recession indicators. With the Fed rate hike decision looming, the markets await how that might impact long and short term interest.Wall Street has been behaving erratically over the past few weeks ever since the Chinese contagion finally reached U.S. shores. As of the close on September 8, 2015, the S&P 500 has shed nearly 110 points, a 5.29% loss, in the past month even after recovering from a drop of nearly 230 points earlier. Meanwhile volatility has soared more than 85% over the same time frame and is currently holding steady around 25… Read full article at Seeking...
The Stealth Bear Market That Could Take Markets By Surprise

The Stealth Bear Market That Could Take Markets By Surprise

Article SummaryChina’s stock market correction might only be the first sign that a global recession is coming.Stock valuations are 28% above historical averages while economic growth is stagnating which could trigger a major correction.A Fed rate hike would be a disaster for stocks and another round of QE could be in order.Margin levels are at dangerous new highs and broad based buying could mean an unsustainable atmosphere without new cash flow to support it.Investors have been on a bit of a rollercoaster ride the past several days as the markets dipped down and back up by hundreds of points. Volatility rocketed up with the VIX ending Thursday the 20th at 19.14 and reaching a staggering high of 53.29 intraday on Monday the 24th – an increase of more than 178% in less than two trading days… Read full article at Seeking...
Great Expectations And Truth In Earnings

Great Expectations And Truth In Earnings

Article Summary72% of companies that have reported earnings issued negative guidance, which is higher than the 5-year average.Revenues have fallen for two back-to-back quarters, indicating a bearish signal for US stocks.The Fed is propping up stocks right now based on speculation of a rate hike that is looking more and more unlikely next month.The broader indices continue to tread water at or near all-time highs despite unconvincing mixed economic data and crises in both Europe and China. While the Greek debt issue seems to have come back under control, the collapse in the Chinese stock market has yet to bleed over into domestic markets. Yet the threat of a possible loss has not seemed to faze stocks… Read full article at Seeking...