Month: September 2022

20
Sep
2022
This is the Single Worst Thing That Could Happen to Stocks Right Now!

This is the Single Worst Thing That Could Happen to Stocks Right Now!

By Graham Summers, MBA

Treasury bond yields are rising again. 

And this is really bad news for stocks.

Why?

Because these bonds are the bedrock of our current financial system. They are the senior most asset class and the yields on these bonds represent the “risk free” rate of return against which all risk assets (including stocks) are priced.

When Treasury yields are low investors are willing to pay a higher Price to Earnings (P/E) multiple for stocks. For instance, when the yield on the 2-Year Treasury was 0.2% or lower as it was for most of April 2020 through September 2021, investors were willing to pay 20 to 22 times forward earnings for stocks. 

Now, Treasury yields trade based on inflation among other things. So, when inflation became a major problem for the financial system starting in October of 2021, the yield on the 2-Year Treasury began to spike higher. From then until early September of 2022, this yield spiked from 0.2% to over 3.4%

This is the reason stocks collapsed in the first nine months of this year: Treasuries were offering higher yields, so investors were no longer willing to pay 20-22 forward earnings for stocks. Instead they were paying 16 to 18 times earnings.

I mention all of this because the yield on the 2-Year Treasury is once again spiking higher. As I write this, it has just broken north of 4%. Historically, when it has done this, it has opened the door to 4.25% (purple line) and even 5% (pink line).

What does this mean for stocks?

The door is open to a retest of 3,500 on the S&P 500… if not  3,220 or even sub-3,000.

We might not get to any of these this week or next… but they’re coming.

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

Today is the last day this report is available to the public.

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Posted by Phoenix Capital Research in It's a Bull Market
14
Sep
2022

The Great Currency Wars Have Begun… Time For Currency Confetti!

By Graham Summers, MBA

As I mentioned on Monday, the Great Currency Wars have begun.

Japan is about to intervene directly in their currency markets. And why wouldn’t they… Japan imports most of its energy and food… and its currency is at a 24 year LOW due to inflation (as well as differentials between its monetary policy and that of the U.S. and E.U.).

In simple terms, one of the MAJOR currencies of the world is now trading like an emerging market currency.

The Euro isn’t far behind either. It’s at a 20-year low. Things are so out of control there that the ECB just raised rates by the most in history: a 0.75% rate hike. This barely made a blip in the Euro’s chart as it continues to collapse.

And guess what… all these currency interventions are inevitably going to result in central banks printing more money.

After all, that’s all they can do. They can’t print oil, or workers, or any of the other things that the economy needs.

Which means… inflation is only going to get worse.

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

Posted by Phoenix Capital Research in Inflation, It's a Bull Market
13
Sep
2022

What Happens to Inflation When the U.S. Dollar Begins to Collapse?

By Graham Summers, MBA

As I noted yesterday, Japan has unleashed the next wave of inflation.

By quick way of review:

1) Japan’s central bank, the Bank of Japan or BoJ, is the only major central bank that is still easing monetary conditions: both the Fed and the European Central Bank (ECB) are tightening monetary conditions.

2) As a result of this differential in policy, Japan’s currency, the Yen has hit a 24-year low relative to the $USD.

3) Japan imports almost all its energy and food needs. As a result of this currency collapse, food and energy prices in Japan are skyrocketing.

So last week, the BoJ decided to take matters into its own hands… and intervene directly in the currency markets. This is an actual gamechanger.

Why?

Because Japan is now EXPORTING inflation to the U.S. and Europe. How long do you think the U.S. and Europe will tolerate this?

And so… we have entered the currency wars, a time in which major countries use monetary policy as a weapon to defend their own currencies against others.

All of this is HIGHLY inflation.

Consider the U.S.. If inflation hit a 40 year high at a time when the $USD was doing this:

What do you think happens to inflation when the $USD rolls over due to Japan propping up the Yen?

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

Posted by Phoenix Capital Research in It's a Bull Market
12
Sep
2022

Japan Just Unleashed the Next Wave of Inflation

By Graham Summers, MBA

Japan just hit the “panic” button regarding inflation.

Over the last few two years, the Japanese Yen has imploded as the country’s central bank continued to print money. In contrast, the central banks in both Europe and the U.S. are tightening. As a result of this difference in policy (EU and US tightening, Japan still easing) Japan’s currency has collapsed to a 24 year low.

A currency collapse like this under any condition is bad for the country. However, for Japan the issue is particularly bad as it imports practically ALL of its energy and food.

Imagine trying to buy gas or food when your currency just collapsed to a24 year low relative to your primary trading partners (China and the U.S.).

And so, on Friday, the country’s central bank, the Bank of Japan (BoJ), announced it will begin intervening in the currency markets to support the yen.

What does this mean?

The great currency wars have begun. We have reached the point at which major central banks will begin intervening directly in the currency markets to fight inflation. And ironically, this in turn is only going to unleash MORE inflation.

Why?

Because the only way for a central bank to intervene in the currency markets is to print more money! Indeed, if the policy response from the pandemic has taught us one thing, it’s that printing money is all policymakers know how to do!

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

Posted by Phoenix Capital Research in Inflation
06
Sep
2022

The Fed’s Worst Nightmare Has Officially Arrived

By Graham Summers, MBA

The Fed’s worst nightmare has arrived.

That nightmare?

Sticky inflation in the form of a wage spiral.

Inflation doesn’t enter the financial system all at once; it arrives in stages. Those stages are:

Stage 1: Price increases in raw materials

Stage 2: Price increases in factory gate prices

Stage 3: Price increases in retail prices/ consumer prices

Stage 4: Employees/workers demand higher wages to meet higher costs of living.

The Fed can deal with stage 1 or stage 2 of inflation relatively easily. However, once we get into stages 3 and 4, inflation becomes a LOT harder for the Fed to kill. 

Indeed, for the Fed, stage 4 is the most dreaded phase of inflation as it usually requires a deep recession to kill it.

And the U.S. economy just entered it.

The ADP national employment report released last Wednesday reveals that private sector employment increased by 132,000 jobs in August.

That’s the good news.

The bad news?

Annual pay increased by 7.6%.

In simple terms, employees/ workers are now demanding higher wages due to inflation. This means the Fed’s worst nightmare has arrived. It will need to raise rates much higher than anyone anyone believes… and trigger a deeper recession than anyone expects in order to bring inflation to heel.

Our downside target for the S&P 500 remains below 3,000 as noted on the chart below.

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

Today is the last day this report will be available to the general public.

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

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Posted by Phoenix Capital Research in It's a Bull Market