Month: April 2017

Yesterday’s article caused quite a stir.

The basic premise is that when you value the stock market based on objective metrics that cannot be fudged, it’s more overpriced than it was at the 2007 peak and is rapidly approaching the 1999 peak.

However, the underlying reason that stocks are so ridiculously overpriced has to do with another asset class: bonds.

The fact is that by keeping interest rates at zero for seven years, the Fed has created a bubble in bonds. Back in 2008, the US’s Debt to GDP was just 65%.

Thanks to seven years of ZIRP, the US Government was able to go on a massive spending spree, ballooning the Debt to GDP to above 105% where it sits today.

How does this impact stocks?

According to the Fed Model for valuing assets, stock prices trade based on interest rates (bond yields).

The equation is the following:

(Stock Earnings/ Stock Prices)= 10 Year Treasury Yields.

So… if yields are pushed to record lows courtesy of Fed policy… and earnings are not growing rapidly to make up the difference, stock prices must soar.

If this sounds like a load of nonsense to you, it is in fact the primary argument the financial elites are making for why stocks are such a bargain even today.

“Measured against interest rates, stocks actually are on the cheap side compared to historic valuations,”

~Warren Buffett in an interview with CNBC February 2017.

Buffett is indirectly revealing the Fed’s whole game here: drive yields down so that stocks will rally. Indeed,this was the entire point of Fed activity post-2008: to reflate another bubble (this time in bonds) forcing capital into the financial markets.

So in this sense, stocks are in fact in a derivative bubble… a bubble that is derived from another bubble (this one in bonds). And it will end as all bubbles do: in disaster.

The below chart isn’t a pretty one, but it’s worth keeping in mind as stocks move ever higher into nosebleed territory.

To pick up a FREE investment report outlining three investments that you could make you a ton of money when this bubble bursts…

CLICK HERE!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The US stock market is officially in a massive bubble based on the one valuation metric that cannot be faked.

Corporations can engage any number of accounting gimmicks to juice their earnings, cash flow, and dividends… for this reason P/E, P/CF and P/DY ratios are all suspect when it comes time to value a corporations.

Sales cannot be gimmicked. Either money comes in the door, or it doesn’t. And if a company is caught messing around with its sales numbers, someone is going to jail.

For this reason, Price to Sales is perhaps the single most objective and clear means of measuring stock valuations.

This metric, above all others, you can point to and say, “this is definitively accurate and has not been messed with.”

On that note, as Bill King recently noted, today the S&P 500 is sporting a P/S ratio that is massively higher than it was in 2007 and is only marginally lower than it was during the Tech Bubble (the single largest stock bubble of all time for most measures).

(source: The King Report)

There is simply no way to look at this and not call it a bubble. It is well above the 2007 bubble and only slightly smaller than the Tech Bubble (which everyone now looks

This bubble, like all bubbles, will burst. And when it does, the market will crash, just as it did in 2000 and 2008.

And smart investors will use it to make literal fortunes.

If you’re looking for a means to profit from this we’ve already alerted our Private Wealth Advisory subscribers to FIVE trades that will produce triple digit winners as the market plunges.

As I write this, ALL of them are up.

And we’re just getting started.

If you’d to join us, I strongly urge you to try out our weekly market advisory, Private Wealth Advisory.

Private Wealth Advisory uses stocks and ETFs to help individual investors profit from the markets.

Does it work?

Over the last two years, we’ve maintained a success rate of 86%, meaning we’ve made money on more than EIGHT out of every ten trades we make.

Yes, this includes all losers and every trade we make. If you followed our investment recommendations, you’d have beaten the market by a MASSIVE margin.

However, if you’d like to join us, you better move fast…

… because tonight at midnight, we are closing the doors on our offer to try Private Wealth Advisory for 30 days for just $0.98.

This is it… no more extensions… no more openings.

To lock in one of the remaining slots…

Click Here Now!!!

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

 

A tsunami of inflation is rapidly moving through the financial system.

Most investors only pay attention to the Federal Reserve. And they are missing the BIG PICTURE for Central Bank monetary policy.

The Fed is tightening policy by hiking rates. But the rest of the world’s Central Banks are printing a combined $200 BILLION in QE every single month.

Yes, $200 billion. At a time when the financial system is out of crisis and the Fed’s put its own “print” button on “pause.”

This is an all-time record… greater even that the global money printing that occurred at the depth of the 2008 Crisis when Central banks were desperate to prop the system up.

Indeed, at $200 billion per month, we’re talking about an annualized pace of over $2 TRILLION in money printing every year.

If you don’t believe this will unleash inflation, consider that already in the US, inflation has exceeded the Fed’s targets on ALL FOUR of its measures.

Bear in mind, these are the “official” measures of inflation… the ones that don’t include things like food, or energy. When you account for the rise in the REAL cost of living in the US, REAL inflation in the US is closer to 6%.

And this is happening at a time when the Fed is hiking rates and NOT printing money.

If you don’t take my word for it, take a look at Gold priced in the $USD, Japanese Yen, Euro, and British Pound.  The precious metal has begun to break of to the upside in all major world currencies.

Gold “smells” what’s coming. It’s inflation. And smart investors are preparing for it now.

If you’re looking for a means to profit from this we’ve already alerted our Private Wealth Advisory subscribers to FIVE trades that will produce triple digit winners as inflation takes hold of the financial system.

As I write this, ALL of them are up.

And we’re just getting started.

If you’d to join us, I strongly urge you to try out our weekly market advisory, Private Wealth Advisory.

Private Wealth Advisory uses stocks and ETFs to help individual investors profit from the markets.

Does it work?

Over the last two years, we’ve maintained a success rate of 86%, meaning we’ve made money on more than EIGHT out of every ten trades we make.

Yes, this includes all losers and every trade we make. If you followed our investment recommendations, you’d have beaten the market by a MASSIVE margin.

However, if you’d like to join us, you better move fast…

… because tonight at midnight, we are closing the doors on our offer to try Private Wealth Advisory for 30 days for just $0.98.

This is it… no more extensions… no more openings.

To lock in one of the remaining slots…

Click Here Now!!!

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

The US has hit its Debt Ceiling.

The only reason it has yet to result in a crisis is because the Treasury employed “extraordinary measures” to keep the markets functioning.

Those measures end this Friday.

Put differently, Congress now has FOUR days to resolve the budget in order to avert a debt crisis.

This is the same budget that features…

1. Trump’s border wall
2. Funding for sanctuary cities
3. Obamacare subsidies.

Any one of those are “deal breakers” for different factions in Congress. And don’t forget that we are dealing with a situation in which various political factions will gladly torpedo legislation based on their agendas.

And these people have FOUR days to resolve the above issues…

Good. Luck. With. That.

The reality is that a Government shutdown is not just likely but highly probable. And the fact that this is occurring when the US has already hit its debt ceiling and has implemented extraordinary measures doesn’t bode well.

The whole mess is quite similar to the Debt Ceiling crisis of mid-2011. That particular situation resulted in stocks plummeting 17% as the US lost its AAA credit rating.

It was only through direct Fed intervention as well as the announcement of Operation Twist that stocks were able to regain their footing.

This time around the Fed is TIGHTENING policy with plans for at least two more rate hikes and the shrinking of its balance sheet sometime later this year.

So the notion that the Fed will be able to “save the day” if Congress doesn’t get its act together isn’t anywhere near as high as it was in 2011.

This opens the door to a potential market “event.” And few if any are paying attention to it.

If you’re looking for a means to profit from this we’ve already alerted our Private Wealth Advisory subscribers to FIVE trades that will produce triple digit winners if Congress blows up the market.

As I write this, ALL of them are up.

And we’re just getting started.

If you’d to join us, I strongly urge you to try out our weekly market advisory, Private Wealth Advisory.

Private Wealth Advisory uses stocks and ETFs to help individual investors profit from the markets.

Does it work?

Over the last two years, we’ve maintained a success rate of 86%, meaning we’ve made money on more than EIGHT out of every ten trades we make.

Yes, this includes all losers and every trade we make. If you followed our investment recommendations, you’d have beaten the market by a MASSIVE margin.

However, if you’d like to join us, you better move fast…

… because tonight at midnight, we are closing the doors on our offer to try Private Wealth Advisory for 30 days for just $0.98.

This is it… no more extensions… no more openings.

To lock in one of the remaining slots…

Click Here Now!!!

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

 

 

France holds the first round of its Presidential election this weekend.

The big worry for the markets is the fact that anti-Euro candidate Marin Le Pen could potentially win.

Now, the polls show Le Pen as having NO chance of becoming Prime Minister.

Of course, the polls also showed that BREXIT would not happen and Hillary Clinton had a 98% of becoming President.

We all know how those turned out.

“So what?” one might ask, “why would a Le Pen victory matter? Both BREXIT and Trump’s Presidential election ignited massive stock market rallies… why wouldn’t France leaving the Euro do the same?”

One word…

Collateral.

The big problem for EU members from is debt.

Yes, we all know that EU countries are saturated in debt… but the key issue here WHO owns this debt and WHAT it represents to them.

To citizens of a nation, sovereign debt represents payment of social entitlements in exchange for long-term debt servitude as a nation.

To politicians of a nation, sovereign debt represents a means of paying for welfare schemes promised on the campaign trail.

For banks… sovereign debt represents the senior-most collateral backstopping their massive derivatives portfolios.

The derivatives markets, the same markets that triggered the 2008 meltdown, were never properly dealt with.

Today, at the time of this writing, there are over $700 TRILLION worth of derivatives in the financial system.

The bulk of this is owned/controlled by the large banks. And more than $500 TRILLION of this is related to interest rates or BOND YIELDS.

Why do banks own so many derivatives?

The Big Banks love derivatives because they represent a completely opaque asset class that can be priced/ traded/ etc. at whatever value the banks want.

Imagine being able to sell something of nebulous real value to anyone (corporates, other banks, pension funds, hedge funds and even countries buy derivatives from the big banks) at whatever value you want.

THAT’s what the derivatives markets represent to the big banks.

Now, of course, the banks all know the real deal here: that the derivatives they’re selling/ trading are in fact complete make believe of next to no real value.

Because of this, banks demand that other banks put up “collateral” to backstop these trades.

Collateral= an asset of actual, determinable value that would be posted if the derivative trade ever goes bad and a counter-party demands something of REAL value to cover the imploding value of the derivatives trade.

Sovereign bonds… as in the same bonds France issues… the same bonds that would be re-priced if France leaves the Euro… are some of the senior-most collateral backstopping these trades.

So… IF Le Pen wins… and IF she pushes for France to leave the Euro… and France subsequently has to revalue its bonds based on its new credit rating as a standalone country (not an EU member) we’re talking about over €2.2 TRILLION in sovereign debt needing to be re-priced.

Based on standard leverage for big banks’ derivatives portoflios, this debt is backstopping anywhere between €20 trillion and €50 trillion in derivatives trades (truthfully even €100 trillion isn’t out of the question).

In simple terms… France leaving the Euro represents another Lehman Brothers times 10.

THIS is why Le Pen potentially winning the French Presidential election is NOT another BREXIT or Trump situation…  there is in fact real potential for a debt-driven derivatives bomb here.

Will Le Pen? We have no idea. But the stakes are VERY different here for the banks than BREXIT or Trump winning.

If you’re looking for a means to profit from this we’ve already alerted our Private Wealth Advisory subscribers to FIVE trades that will produce triple digit winners if France blows up the market.

And we’re just getting started.

If you need help doing this, I strongly urge you to try out our weekly market advisory, Private Wealth Advisory.

Private Wealth Advisory uses stocks and ETFs to help individual investors profit from the markets.

Does it work?

Over the last two years, we’ve maintained a success rate of 86%, meaning we’ve made money on more than EIGHT out of every ten trades we make.

Yes, this includes all losers and every trade we make. If you followed our investment recommendations, you’d have beaten the market by a MASSIVE margin.

However, if you’d like to join us, you better move fast…

… because tonight at midnight, we are closing the doors on our offer to try Private Wealth Advisory for 30 days for just $0.98.

This is it… no more extensions… no more openings.

To lock in one of the remaining slots…

Click Here Now!!!

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

 

 

Trump is speaking… but the markets still don’t hear him.

On January 17^th 2017, the Wall Street Journal published an article in which Trump stated point-blank that the $USD was “too strong.”

The US currency took note, falling over 1% that day bringing it to critical support.

However, the Fed had different plans for the greenback, hiking rates in March and then promising to hike them twice more in 2017.  The $USD reclaimed this line and has since maintained it.

So ask, Trump struck again, this time tweeting “the US Dollar is too strong.”

Look… regardless of one’s political views here, it’s obvious Trump wants the $USD lower. And it’s also obvious that he’s trying to woo Janet Yellen to his side of this situation.

“I like her, I respect her,” Trump said, according to a WSJ published Wednesday. “It’s very early. [regarding renominating her in 2018]“

When asked about Yellen, according to the Journal, the president added: “I do like a low-interest rate policy, I must be honest with you.”

Source: CNBC

You can easily read between the lines here. Trump would like Yellen a lot more if she stopped hiking rates and maintained a “low-interest rate policy.”

In the simplest terms possible… Trump wants a lower $USD and low interest rates. And he’s going to keep pushing for both until he gets them.

And Gold knows it too.

The precious metal has been on an absolute tear so far in 2017, crushing stocks AND bonds.

And as Trump continues to push the $USD lower, Gold will only perform even better. Once the precious metal takes out the downward sloping trendline dating back to the 2011 top, the path is clear for an eventual move to $1600 per ounce.

If you’re looking for a means to profit from this we’ve already alerted our Private Wealth Advisory subscribers to a number of Gold plays that will produce triple digit winners.

Since that time EIGHT of them are already double digit winners.

And we’re just getting started.

If you need help doing this, I strongly urge you to try out our weekly market advisory, Private Wealth Advisory.

Private Wealth Advisory uses stocks and ETFs to help individual investors profit from the markets.

Does it work?

Over the last two years, we’ve maintained a success rate of 85%, meaning we’ve made money on more than EIGHT out of every ten trades we make.

Yes, this includes all losers and every trade we make. If you followed our investment recommendations, you’d have beaten the market by a MASSIVE margin.

However, if you’d like to join us, you better move fast…

… because tonight at midnight, we are closing the doors on our offer to try Private Wealth Advisory for 30 days for just $0.98.

This is it… no more extensions… no more openings.

To lock in one of the remaining slots…

Click Here Now!!!

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

 

 

A tectonic shift is taking place in stocks.

And those who have taken notice will be making SERIOUS money from it.

Let me explain…

Below is a chart of the S&P 500 priced in Emerging Market Stocks.

When the black line falls Emerging Markets are outperforming US stocks. When the black line rises, US stocks are outperforming Emerging markets.

As you can see, from 1999 until roughly 2010, Emerging markets demolished stocks by a wide margin.

This trend then reversed in 2011, with the S&P 500 dramatically outperforming Emerging markets.

However, that trend now appears to be reversing. The chart has failed to break out to new highs and is now in danger of breaking its bull market trendline.

When this happens, we will once again be entering a period in which Emerging markets outperform US stocks.

We took note of this in our paid weekly investment advisory Private Wealth Advisory  back in November.

Since that time we’ve already shown our subscribers EIGHT double digit winners from the Emerging Market space.

And we’re just getting started.

As the Emerging Market trend strengthens, we’ll be seeing truly MASSIVE returns (the last time this happened triple, even QUADRUPLE digit winners were possible).

If you need help doing this, I strongly urge you to try out our weekly market advisory, Private Wealth Advisory.

Private Wealth Advisory uses stocks and ETFs to help individual investors profit from the markets.

Does it work?

Over the last two years, we’ve maintained a success rate of 85%, meaning we’ve made money on more than EIGHT out of every ten trades we make.

Yes, this includes all losers and every trade we make. If you followed our investment recommendations, you’d have beaten the market by a MASSIVE margin.

However, if you’d like to join us, you better move fast…

… because tonight at midnight, we are closing the doors on our offer to try Private Wealth Advisory for 30 days for just $0.98.

This is it… no more extensions… no more openings.

To lock in one of the remaining slots…

Click Here Now!!!

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

The market is finally waking up to what we’ve been telling our clients since February…

That Trump’s economic proposals, particularly his tax reform plan, would not be hitting in 2017.

This is not a political statement… the reality is that the math is not there… and the swamp makes reform slow-going…

If you don’t believe us, here’s Trump’s Treasury Secretary confirming it.

Treasury Secretary Steven Mnuchin said in a published Monday with the Financial Times that enacting tax reform legislation by August is “highly aggressive to not realistic at this point.” 

The comments contrast with remarks Mnuchin made in March, when he said his goal would be to have a tax bill “signed” by August…

Source: The Hill.

Tax reform isn’t coming anytime soon. Neither is a healthcare reform. Nor infrastructure spending.

The reason?

The US is already saturated in debt… due to our financing a staggering amount of social entitlement spending which comprises 64% of the Federal Budget.

Even if Trump were to cut ALL non-entitlement and military spending programs by 20% across the board, he’d only free up $64 billion.

And by the way, the US is STILL running a deficit… indicating that much of this is being financed by money we don’t have.

Put simply: the math does not support any tax reform. The US is already spending more than it makes via taxes. The only way you can reform taxes or lower them is if the money comes from somewhere else.

Good. Luck. With. That.

This is a major warning to stock investors to be extra careful. Now more than ever is a time to be nimble and preparing to make money from a market “event.”

If you need help doing this, I strongly urge you to try out our weekly market advisory, Private Wealth Advisory.

Private Wealth Advisory uses stocks and ETFs to help individual investors profit from the markets.

Does it work?

Over the last two years, we’ve maintained a success rate of 85%, meaning we’ve made money on more than EIGHT out of every ten trades we make.

Yes, this includes all losers and every trade we make. If you followed our investment recommendations, you’d have beaten the market by a MASSIVE margin.

Today, if you’d like to join us, you better move fast…

… because tonight at midnight, we are closing the doors on our offer to try Private Wealth Advisory for 30 days for just $0.98.

This is it… no more extensions… no more openings.

To lock in one of the remaining slots…

Click Here Now!!!

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

The economy is now in VERY serious trouble.

The Fed’s own GDP models now show 1Q17 growth tracking at just 0.5%. This is DOWN from an original forecast of 3.2% in February. Put another way, the economy has begun contracting at a RAPID pace.

Moreover, we are getting numerous signals that the US consumer, the single largest driver of the economy, is not spending.

According to Reuters US consumer spending FELL for a second straight month in March. Moreover, the Fed’s internal models show that 1Q17 consumer spending is clocking in at a “barely alive” rate of 0.3%.

Why does this matter?

The Fed managed to “paper over” the weakest recovery in 80 years with massive QE programs. As a result of this, for the last seven years, weak economic fundamentals have been largely “ignored” by stocks.

However, the Fed STOPPED QE back in October 2014. Which means stocks are due for a “wake up call” as they begin to “wake up” to the TRUE state of the US economy.

This is a major warning to stock investors to be extra careful. Now more than ever is a time to be nimble and preparing to make money from a market “event.”

If you need help doing this, I strongly urge you to try out our weekly market advisory, Private Wealth Advisory.

Private Wealth Advisory uses stocks and ETFs to help individual investors profit from the markets.

Does it work?

Over the last two years, we’ve maintained a success rate of 85%, meaning we’ve made money on more than EIGHT out of every ten trades we make.

Yes, this includes all losers and every trade we make. If you followed our investment recommendations, you’d have beaten the market by a MASSIVE margin.

Today, if you’d like to join us, you better move fast…

… because tonight at midnight, we are closing the doors on our offer to try Private Wealth Advisory for 30 days for just $0.98.

This is it… no more extensions… no more openings.

To lock in one of the remaining slots…

Click Here Now!!!

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

 

 

 

 

While everyone continues to focus on Trump and his policies, a much larger issue looms.

That issue is the US debt ceiling.

The US Government hit its debt ceiling on March 16, 2017. The Government employed “extraordinary measures” to keep the Government open. At that time, Congress had a little over three weeks to deal with this issue.

Given how divided Congress has become, it’s no surprise this has gone nowhere. Congress left for its spring recess without fixing this.

Congress returns on April 21st and will have just a handful of sessions to resolve this issue before its deadline. (April 28 2017).

In order to resolve this issue, Congress will have to resolve the budget… which includes issues that are EXTREMELY contentious (the US/Mexico border wall for one).

Put simply… in order to avoid a Government shutdown and potential repeat of the 2013 Debt Ceiling Crisis, the same Congress that cannot even get an Obamacare Repeal off the ground (one of the most sought after pieces of legislation in over a decade)… is supposed to somehow work out a budget including VERY contentious issues… in a HANDFUL of sessions.

Good. Luck. With. That…… particularly at a time when it is clear certain groups in Congress are all too happy to blow up deals in order to sabotage the Trump administration’s agenda.

This is an absolute mess. And the market is only just beginning to wake up to the risk here with the S&P 500 breaking below critical support on Thursday.

If you are concerned about a potential debt crisis in the US, you can take easy steps to prepare for it.

Indeed, you could even make money from it with the right investments.

On that note we are already preparing our clients for how to make money from this with tree simple investment strategies designed to pay out when the markets enter periods of heightened risk.

To learn them you can pick up a free Investment Report here:

http://phoenixcapitalmarketing.com/bondbubble2.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The Trump economic utopia is officially dead for now.

If you’ll recall, following Trump’s election, the market was lead higher by banks.

The reason?

The markets believed that the economy would come roaring back, lending would pick up, and bank profits would soar.

Well, the economy has NOT come roaring back. In fact, it’s rolled over and flatlined. Even the Fed’s own GDP now measure shows GDP growth BELOW 1%.

And now bank stocks are collapsing as well…

You can ignore this if you like. But where banks go… the market goes. And the banks are now going DOWN.

This is a major warning to stock investors to be extra careful. Now more than ever is a time to be nimble and preparing to make money from a market “event.”

For insights on how to play this, swing by www.gainspainscapital.com

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research

Stocks are weak, tired, and ready to go.

The market has been increasingly relying on just a handful of large cap Tech Names (AAPL, AMZN, etc.) to prop it up. Without these key plays, the overall market is in fact DOWN.

If you want to get a sense of where stocks are heading, consider the number of S&P 500 companies that are trading above their 50-day moving averages. In the past two years, when this blue line spikes, it’s “pulled” the overall market higher.

As you can see, this is no longer the case. In fact the blue line is rolling over aggressively, telling us that “internally” the market is very weak.

This is a major warning to stock investors to be extra careful. Now more than ever is a time to be nimble and preparing to make money from a market “event.” The Election rally has broken its trendline (blue line). We’re ready to for the red line to hit by June.

This is a major warning to stock investors to be extra careful. Now more than ever is a time to be nimble and preparing to make money from a market “event.”

If you need help doing this, I strongly urge you to try out our weekly market advisory, Private Wealth Advisory.

Private Wealth Advisory uses stocks and ETFs to help individual investors profit from the markets.

Does it work?

Over the last two years, we’ve maintained a success rate of 85%, meaning we’ve made money on more than EIGHT out of every ten trades we make.

Yes, this includes all losers and every trade we make. If you followed our investment recommendations, you’d have beaten the market by a MASSIVE margin.

Today, if you’d like to join us, you better move fast…

… because tonight at midnight, we are closing the doors on our offer to try Private Wealth Advisory for 30 days for just $0.98.

This is it… no more extensions… no more openings.

To lock in one of the remaining slots…

Click Here Now!!!

Best Regards

Graham Summers
Chief Market Strategist
Phoenix Capital Research