Month: February 2022

By Graham Summers, MBA

The Russia distraction appears to be over. The markets are enjoying a relief bounce. Enjoy it while it lasts.

The bigger issue for investors today is the fact that the markets are experiencing the first coordinated monetary tightening by central banks in years.

In the U.S., the financial system needs to digest the following:

·      The Fed is ending QE in a few weeks.

·      The Fed will begin raising rates, likely in March.

·      Multiple Fed insiders are suggesting the Fed will be raising rates five or seven times this year.

Across the Atlantic, we have:

·      The Bank of England (BoE) is already raising rates

·      The European Central Bank (ECB) will be ending QE this year.

·      The ECB is no longer committed to NOT raising rates. 

The bond markets are fully aware of these developments. But stocks are in “la la land.”

The yield on the 2-Year U.S. treasury has exploded higher, more than DOUBLING in the last six weeks alone.

In Germany, the 2-Year Government Bond has also exploded higher. Two weeks ago it moved more in a single week than it has in SIX YEARS.

This is the global financial system telling us, point blank, that we are in a “risk off” environment.

Stocks might chop around for a few more days, but we are going to NEW LOWS.

You can ignore this forecast, but in a week or so, you will wish you hadn’t.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

By Graham Summers, MBA

The #1 question from clients over the weekend was whether Russia would invade Ukraine.

My answer: it doesn’t matter as far as stocks are concerned.

This is not to say that a war isn’t significant. And I’m certainly not making light of human suffering or loss of life. What I am saying is that stocks are going to new lows regardless of what happens in Eastern Europe/ Russia.

Let me explain.

The #1 rule for investing since 1996 has been: don’t fight the Fed.

What I mean by this is that as the financial system has become more and more addicted to Fed interventions, your goal as an in investor should be to align your interests with whatever the Fed is trying to do.

If the Fed is trying to reflate the financial system by printing trillions of dollars, you generally want to be long stocks. This was certainly the case from March 2020 until November 2021, during which time the Fed was easing monetary conditions aggressively, printing over $4 trillion. Stocks went up in an almost straight line throughout this period. Anyone who attempted to fight the Fed by betting on a crash got taken to the cleaners.

So, what is the Fed doing now?

Since November 2021, the Fed has been reducing its money printing. Its last day of QE will be in early March (three weeks from today). And from that point onward, the Fed will be tightening monetary policy by raising interest rates.

Put simply, the Fed is tightening, which is generally BAD for risk assets like stocks. Investors already got a taste of what’s coming during the first leg down in late January.

So again, whether Russia invades Ukraine or not is relatively insignificant. The Fed, which is the single most powerful force in the markets, is tightening monetary policy right now, which means stocks are going to break down… or possibly even crash.

After all, the last three times the Fed did what it is doing now resulted in:

1) The Tech Crash (2000-2002) stocks lost 80%.

2) The Housing Crash (2007-2009) stocks lost 60%.

3) The late-2018 meltdown (October-December 2018) stocks lost 20%.

Let me be blunt here, if you’re not taking steps to prepare for what’s coming, NOW is the time to do so.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

By Graham Summers, MBA

There’s fiction… and then there’s the January jobs report.

We are told that the economy added 1.2 MILLION jobs last month. This would be hilarious if wasn’t an incredible lie… a lie that is meant to convince the American people that the economy is doing well.

It isn’t.

The Bureau of Labor Statistics (BLS), which produced this monstrosity, should go into creative writing… there at least you’re SUPPOSED to make things up.

The report itself is absurd. If you’re going to craft a garbage report, at least try to make it believable: don’t create jobs in industries that EVERYONE knows are NOT hiring in January.

Case in point, January is notorious for BAD Retail jobs numbers because 90% of retail sales occur between September and the Holidays. Retailers hire a ton of seasonal workers to meet this demand. Then, once the holidays pass, the retail layoffs begin.

And yet, the BLS’s jobs report claims the Retail industry ADDED 61,000 jobs in January. You know, because Retailers are ramping up for the big sales boom in February… which has NEVER happened.

Another glaring data point comes from the Leisure and Hospitality industry. 

It, like Retail, ALSO sees a holiday boom as Americans travel more during the holidays. Because of this, the Leisure and Hospitality industry hires tons of seasonal or part-time workers. Then, once the holidays pass, the layoffs begin.

Unless… you’re in the fantasy world of January’s jobs numbers. THEN the Leisure and Hospitality industry hired 161,000 people in January because… well because the report is garbage and was made up via accounting gimmicks.

Again, if you’re going to invent jobs out of thin air… at least try to make it believable.

So where are we really?

Well, if you go by ADP’s jobs numbers, U.S. companies SHED 301,000 employees last month.

If you go by the Labor Department’s official numbers, if you get rid of the population growth numbers which it admits are at best a GUESS, the economy LOST 272,000 jobs last month.

And then there’s the fact that the BLS itself admits that without seasonal revisions (i.e., BS-spreadsheet nonsense), the report would show that 272,000 jobs were LOST in January.

Put another way, the BLS’s accounting gimmicks created 1.4 MILLION jobs out of thin air. 

These jobs don’t exist. They’re just a data point created in a spreadsheet by a government bean counter using an algorithm that has no connection to reality.

Does this sound like a great economy to you?

If you don’t believe me, consider that stocks are FORWARD looking. 

The index that is most sensitive to the economy is the Russell 2000. Some 30% of the companies in this index are unprofitable… so this index NEEDS the economy to be doing well because the growth counter acts the lack of cash flows.

Note that the Russell 2000 went NOWHERE throughout 2021. And it is now breaking down in a horrible way.

Put another way… you better not believe the garbage data coming out of the BLS. If you do, you’re in for a world or hurt.

The coming bust is going to be life-changing for many people. Most will lose much if not everything. But a small number of investors will generate LITERAL FORTUNES.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

By Graham Summers, MBA

You’re no doubt confused by the market’s action of the last week. Are we about to see a waterfall crash… or are stocks about to explode higher to new highs?

The answer is probably neither.

Markets are tricky things. More often than not, their goal is to induce the maximum amount of suffering to the maximum number of investors.

So let’s dive in together and sort this out.

On a daily and weekly basis, the S&P 500 is now trending down. The market broke below its 200-day moving average (DMA) for the first time since the March 2020 lows. That’s a BIG deal and suggests a new bear market is here. Stocks have since reclaimed that level, but are failing to get much higher.

Moreover, on a monthly basis, the S&P 500 is clinging to the ledge of a cliff at its 10-monthly moving average (MMA) at 4,465. 

This is a BIG deal for the bulls because every time the market has broken that line in the last five years, a bear market has hit, with stocks losing 20%-30% of their value quite rapidly. 

Where does this leave us?

Overall, the tilt for the market is decidedly NEGATIVE. The trend remains down on a daily basis and the monthly chart is looking quite dangerous as well.

This means the odds favor more downside… and possibly even a crash/ bear market.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

By Graham Summers, MBA

Yesterday’s action sure seemed to come out of nowhere, didn’t it?

The market came roaring out of the gate yesterday morning and didn’t look back. Every period of weakness was bought aggressively by the bulls. And stocks finished the day up near 100 points on the S&P 500.

What happened here? Is the danger over and it’s time to buy?

Not so fast!

The financial media likes to act as if every market move is driven by fundamentals. But sometimes the market moves 100% based on manipulation. For those who aren’t aware of this, moves like yesterday’s can be quite tricky. 

Let’s break this down together.

Fund managers must report their performance results every month. Yesterday was the last day of January. And going into that trading session, January had been a terrible month for most funds.

In simple terms, yesterday represented the last opportunity investment funds had to push stocks higher to ensure the month ended with the best possible results. So, they did what most people would do in that situation… they gamed performance by pushing stocks higher.

You can see this clearly in the Big Tech stocks (Microsoft, Apple, Alphabet, Facebook/ Meta).

These are the most over-owned companies on the market.  Practically every fund on the planet owns them to the point that they’re often referred to as “hedge fund hotels.” 

These companies exploded higher yesterday, dramatically outperforming the broader market. The FANG Plus Index which made up of large tech companies I just mentioned, rose over 5.8% while the S&P 500 was up just 1.89%.

What rational thinking investor bought shares of Apple or Alphabet or Microsoft in an absolute panic yesterday? 

Again, these are the most owned companies on the planet. So where did the demand come from to force these companies to spike higher?

It was manipulation by the same funds that already owned these companies… and who were about to report awful performance numbers for the month of January. 

This is what makes markets so tricky: if you’re not aware of what’s happening “behind the scenes” it’s easy to mistake these kinds of games for a real bull run.

For those of us who know how the game is played, the most likely path for stocks going forward is this:

For those who are worried that a new bear market is starting and that the stock market is in danger of a crash, our Stock Market Crash Survival Guidecan show you how to not only protect your portfolio, but how to profit from a market collapse.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,