Month: July 2022

By Graham Summers, MBA

As I noted in yesterday’s article, if you want to make real money from the markets, you need to ignore what the Fed is saying and focus on price.

By quick way of review, the Fed and its awful predictions are the primary reason stocks have collapsed so far in 2022. The Fed screwed up with inflation. And inflation is the reason why Treasury yields spiked, forcing stocks to be repriced from 20-22 times forward earnings down to 15-16 times forward earnings (as Ed Yardeni’s fantastic chart below reveals).

Again, if you are looking to profit from the markets, you’re much better off ignoring the Fed and focusing on price.

So, what is price telling us now?

The Treasury yield curve has just inverted. The yield curve is comprised of comparing the yields on various bonds. One of the most common ones used for economic predictions is the 2s10s: what you get when you subtract the yield on the 2-Year Treasury from the yield on the 10-Year Treasury.

Whenever the yield on the 2-Year Treasury exceeds that of the 10-Year Treasury, the yield curve is inverted. This ONLY happens before a recession. And right now, it is more inverted than at any point since the year 2000.

In simple terms, a recession is coming and coming soon.

What does this mean for stocks?

I’ll detail that in tomorrow’s article. In the meantime, if you’re looking to prepare and profit from what’s coming, 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

By Graham Summers, MBA

Stocks soared higher on Friday because a Fed official suggested they might not have to tighten rates as rapidly as before.

Yes, you read that correctly… the Fed will still have to tighten (and tighten a lot), but it might not need to do so as rapidly…

And this ignited a massive rally!

Let’s cut through the BS here.

The Fed is arguably one of the worst forecasters in the world. All throughout 2021, Fed officials repeatedly told us that inflation was either non-existent or “transitory.”

How’d that work out?

Inflation is at 40+ year highs. Americans have never spent more of their paychecks on gas and food. And if not for various gimmicks with the inflation numbers, the official inflation metric would be in the double digits.

And we’re supposed to believe that somehow the Fed is now able to correctly assess this situation?

The below chart tells you all you need to know. And you don’t need to suffer through some Fed official’s nonsense to get a clear picture of what’s coming.

The market is where you get the best information… not some Fed official whose job is verbally intervene whenever stocks are close to breaking down. Ignore the Fed, and focus on the market and you’ll come out of this mess intact.

For more detailed information on how to prepare and profit from this mess, you should check out our Stock Market Crash Survival Guide.

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

By Graham Summers, MBA

The financial system is now screaming “RECESSION!”

The yield curve is perhaps the single best predictor of recessions in the world. If you’re unfamiliar with how the yield curve works works, in broad terms, there are three categories of U.S. debt: Treasury Bills or T-bills (usually short-term debt), Treasury Notes (long-term debt up to 10 years), and Treasury Bonds (long-term debt for 20 or 30 years).

Treasury Bill Maturation Periods:

4 Weeks

13 Weeks

26 Weeks

52 Weeks

Treasury Note Maturation Periods

2 Years

3 Years

5 Years

7 Years

10 Years

Treasury Bond Maturation Periods

20 Years

30 Years

The yield curve is comprised of comparing the yields on these various bonds. One of the most common ones used for economic predictions is the 2s10s: what you get when you subtract the yield on the 2-Year Treasury from the 10-Year Treasury.

Whenever the yield on the 2-Year Treasury exceeds that of the 10-Year Treasury, the yield curve is inverted. This ONLY happens before a recession. And right now, it is more inverted than at any point since the year 2000.

This is effectively the bond market, which is the single best predictor of recessions on the planet, SCREAMING that a recession is coming.

What does this mean for stocks?

I’ve illustrated the last FOUR yield curve inversions on the below chart. You can see what came next for the stock market.

Buckle up… a crash is coming.

If you’re looking for a way to profit from this… while avoiding the major losses that will cripple most investors’ portfolios, 

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

By Graham Summers, MBA

Many investors have been getting crushed by the collapse in the inflation trade.

By quick way of review, throughout 2021 and the first quarter of 2022, inflation-based investments dramatically outperformed the broader market. In particular, Energy stocks (XLE) produced outsized gains, more than doubling the performance of the S&P 500 in 2021.

This all changed in June of this year. From that point onward inflation plays like oil, copper and the like have been collapsing. Oil fell 20% peak to trough. Copper is down 30%. Note the blue rectangles in the chart below.

Is the inflation trade over? Not necessarily. Commodities are an extremely volatile asset class: corrections of 20%, 30%, or even 40% are common during major bull markets in commodities.

Case in point, during the last big commodities run from 2002-mid-2008, oil had numerous corrections of 20%-40% before the final blow off top.

Again, the commodity space is at a critical juncture today. The volatility of the last few weeks is actually quite normal for the space. And the key for determining when the next leg up begins is the $USD.

The $USD has been on a tear as the world is hungry for dollars. Whenever this rally ends and the greenback rolls over again, the commodity space will catch a bid.

As I write this, the greenback’s Relative Strength Index (RSI, located in the bottom box) is overbought. Moreover, the $USD is trading 3% above its 10-week moving average which is also the same as the 50-DMA (see the top box).

On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We are making just 100 copies available to the public.

To pick up yours, swing by:

https://phoenixcapitalmarketing.com/inflationstorm.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

By Graham Summers, MBA

Yesterday, I revealed some disturbing news.

That news?

That the economy is already in recession. It’s not a matter of a recession arriving soon… a recession is already here.

By quick way of review…

1) Copper, a commodity that is closely aligned with economic growth, has erased HALF of its pandemic gains.

2) Oil, another commodity that is closely aligned with economic growth, has collapsed by 23% in the last four months. And the situation is getting worse: oil dropped over 9% on Tuesday.

In light of all of this, you might be saying, “OK Graham, is a recession is already here, why isn’t it showing up in the data?”

Because the data is backward-looking.

Every piece of data the U.S. reports concerns what has already happened… usually months ago. Case in point, the U.S. only just released its GDP data concerning the first quarter of 2022 eight days ago.

To put that into context, the economy is now in its THIRD quarter of the year. And we’re only just getting the final results for the first quarter now!?!

Again, every piece of data the U.S. is weeks, if not months old.

The market, by way of contrast, is forward-looking: it discounts what is about to happen.

With that in mind, what does the below chart tell you about the true state of the economy today?

And if you think that chart is nasty looking, you better not look at this next one.

It makes perfect sense… the last two recessions saw major bear markets that erased over 50% of the stock market’s value. Why would this one be different?

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

By Graham Summers, MBA

The stock market is finally waking up to fact that a recession is already here.

The first sign was copper.

Copper is commonly referred to as “Dr. Copper, the commodity with a PhD in economics.” The reason for this silly name is that the commodity is extremely economically sensitive due to it having so many industrial uses. When the economy is booming copper rallies and when the economy contracts, copper falls.

Copper has collapsed, wiping out half of its pandemic gains. That is correct, copper erased HALF of the entire move from the 2020 lows… a move that was fueled by over $15 trillion in global stimulus. And it did it in the span of two months.

Now it’s oil’s turn. 

Oil is used in practically everything you wear, eat, touch, or drive.

Oil or oil derivatives are present in lipstick, Vaseline, solar panels, polyester (stain resistant clothes), chewing gum, crayons, Aspirin, pantyhose, sneakers, detergent, CDs, concrete/cement, plastics of any kind, food additives, fertilizers, pesticides, candles, milk cartons, pen ink, and more.

Put simply, oil is extremely economically sensitive. And yesterday it was annihilated,

dropping over 9% in a single day to below $100 per barrel. The uptrend is broken here and the commodity is barely clinging to support.

Both of these commodities… which are HIGHLY associated with economic growth, are collapsing. What does this tell you about the true state of the economy today?

Worst of all, this spells BIG TROUBLE for the stock market. The last three recessions involved stock market crashes… will this one be any different?

Take a look at the following chart and tell me what you think…

If you’re looking for someone to help you navigate this mess, few analysts have the ability to navigate crises like I do.

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).

We are making just 100 copies available to the general public. And they are going fast.

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

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Yesterday I outlined that the Fed is once again lying to Americans about the risks they face.

The big lie of 2021 was that inflation was non-existent or “transitory.” We all know how that turned out. Inflation is at a 40-year high, gas is over $5 a gallon, and Americans have never spent more of their incomes on gas and food.

Now the Fed is back with another big lie. It’s the big lie of 2022: that the U.S. won’t enter a recession. For most Americans, the economy has been in recession for months.

The National Bureau of Economic Research (NBER) released a trove of data yesterday with its highly massaged GDP results. And BOY did it have some worrying stuff in it. Most worrying of all was the following:

Real Disposable Personal Income collapsed an incredible 12% in the first quarter of 2022. Even more incredibly, it has fallen in THREE of the last four quarters.

Unfortunately, it’s even worse than that. Look at the below table. Yes, you are reading that correctly, the collapse in Real Disposable Personal Incomes is larger than that which occurred during the 2008 recession.

This is why inflation is so devastating… because it destroys Americans’ pocketbooks. It’s also why every time inflation rises above 5%, a recession hits.

Remember, 75% of GDP is consumer spending. But if consumers have to cut back on their disposable spending because the basic cost of living (gas, food, etc.) is through the roof… you get a recession.

Like today.

So again, the Fed is LYING about the recession, just like it lied about inflation in 2021.

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

Over the last two days, I’ve been explaining how inflation has triggered a recession in the U.S.

By quick way of review:

1. The Fed lied about inflation throughout 2021, claiming it was non-existent or “transitory” meaning it would go away by itself.

• Once inflation, as measured by the Consumer Price Index (CPI), breaks above 5% a recession has followed every time in the last 50 years.

• CPI broke above 5% in September 2021.

• Inflation triggers a recession because it means consumers have to cut back spending (75% of GDP is consumer spending).

All of this is really bad news for stocks.

As I’ve written many times before, U.S. bonds, called Treasuries, are the bedrock of our current financial system. The yields on these bonds represent the “risk free” rate of return against which all risk assets are valued.

With that in mind, the ENTIRE drop in stocks thus far has been due to the “Price” in Price to Earnings, being adjusted to Treasury yields rising. With Treasury yields at 0.25%, investors were willing to pay 20 to 22 times forward earnings for stocks. But now that Treasury yields have risen to 3%, investors are only willing to pay 15-16 times forward earnings.

Put simply, the bear market in stocks thus far was ENTIRELY based on inflation… NOT on a recession. As I write this, the consensus Wall Street Earnings Per Share (EPS) in 2022 is around $230. A stock market valuation of 16 times earnings give us a fair value of 3,680 for the S&P 500.

And that’s roughly where stocks have fallen to thus far in this bear market.

Unfortunately for Wall Street and its delusional forecasts…The average recession results in EPS falling 25%. This would mean 2022 EPS is actually $172, NOT $230.

A stock market valuation of 16 times this new much lower EPS means the S&P 500’s fair value drops to 2,760.

That’s the blue line in the chart below.

The Fed lied about inflation… and it wiped out 30% of the stock market. The Fed is now lying about a recession… and it’s going to send stocks to levels most investors can’t imagine.

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).

We are making 100 copies of this report available to the public.

To pick up your copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html