Tag Archives: Bull market

This is the best start for the S&P 500 in nearly 20 years

What a great start of the year 2018. The best weekly gain in more than a year and the bull market continue to surprise many investors. Dow Jones Industrial Average jumped over 25,000 and nearly all of the 100 companies in the Nasdaq rose.

It is also the best start for the S&P 500 since 1999. Analysts forecasts looks pretty good and economic fundamentals are strong enough to lift the stocks higher. President Trump`s tax cut will also be good for the stock market.

It is difficult to find any reasons for a backdrop in the market. A rate hike or two wont stop investors to continue the party. What they really like is Mr Trump`s lower corporate taxes and that will not only help the U.S but also the global economic growth.

U.S stocks are looking good but European stock look even better. A great rally in European stocks so far is based on growth data for the Euro Zone. Services PMI data showed the Euro area was near its best growth in 7 years.

It has been a boost for STOXX 600 and we can thank European banks like Bank Santander and BNP Paribas for that. The outlook for European equities looks good and it is estimated a close to 10% earnings growth in 2018.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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We are 1% from a bear market

I started day one this year with this simple words: «And now we welcome the new year. Full of things that have never been». We are finished with just one month of the year 2016, and so far we have seen a lot of things that have never been. Is it more to come?

Yes, I think so. I think 2016 will be full of surprises. The start of the new year have been brutal, but we are not in a bear market yet. Nasdaq slid -1,82% on Monday and we are now about 1% from entering a bear market.

Warningbear

The stock market need to fall more than 20% to be called a bear market. Otherwise it is just a correction. S&P 500 and the Dow peaked in May last year. Nasdaq peaked in July 2015, so it`s long time since the top. The spread has warned us in months.

As you may know, we are now entering a critical moment. But what`s holding the market up is the blue chips. Big companies can go up while many small companies can go down at the same time, and that can make the index go up.

The Dow consist of thirty leading companies, and are a price-weighted index. Stocks with high prices count for more than stocks with low prices. The index goes up if stocks with high prices are doing it better than stocks with low prices.

It`s different with Nasdaq, which consist of a hundreds of stocks and most of them are in the tech sector. Nasdaq is not price-weighted, but a capitalization-weighted index, which means the most valued companies like Alphabet and Apple count for more than smaller companies.

It`s easy to be blind if you only look at growth-stocks like Alphabet and Facebook. They are both big, but if you look at the Russel 2000 index, which is an index of small-cap and medium-cap stocks, it is different. That market is more nervous, because small and medium-cap stocks is more risky than blue chips.

Bullish investors argue that most of the bad news is already baked into the market, and if the carnage we have seen so far this year is a correction, we will se the market bounce back very soon. I will follow the oil price, what happens in China and the Fed the coming days. Fed Chair Yellen testifies on Wednesday and Thursday.

We are not in a recession and many institutional investors are closely watching the economy for any sign of negative GDP. We are not there now, but we are close. What we see is a decline in companies earnings. Big buyers are patient and will jump in once the correction is over. If not they will hit the panic-button.

2016 will be the year of change.

wallboard

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Longest bull market in 85 years!

The stock market were on fire yesterday, beginning the 3rd quarter with the bulls clearly in charge. New all time highs came in yesterday, as the DOW came within two points of the highly watched 17,000 mark.

Bull

The DOW closed the session at 16956,07, and that`s up +129 points, which is a new all time high. The S&P500 was rallying higher for the fist five hours yesterday, but after breaking through previous all-time high, the S&P 500 ended the session up +13 points. Nasdaq traded up +1,55%.

The Bank for International Settlements has declared that stock markets are in a «euphoric» state. The Swiss-based financial institution that acts as a counterpart to national central banks has urged central banks globally to begin tightening interest-rate policies now while economies are growing rather than wait for another recession, when it will be too late.

The interest-rate can`t go lower than zero, basically, and if another financial crisis should hit the economy, the central banks will be without weapons to boost the economy again, BIS said. U.S interest-rate were high at about 5,3% when last recession started in 2007, which means they were better prepared than now.

What makes people scared is the longest bull market we have seen in 85 years now. The U.S market has gone more than two years without a correction, or a 10 percent drop, and that makes people nervous about stocks these days. But we have not seen so much QE either.

Some investors say the markets are unprepared. «low-for-long» interest rate can come to an end, U.S unemployment falling and the Fed`s asset purchase «tapering» ending in the fourth quarter is a combination of complacency and illiquidity could turn a snowball into an avalanche.

We will see a lot of important news this week. Later today we have ADP Employment Change coming in. Economists estimate private companies added 205,000 payrolls in June. Other various labor market indicators such as initial jobless claims and the regional manufacturing surveys suggest another trend-like month for payroll growth, said BofA Merril Lynch economists.

Factory Orders: Economists estimate the trade deficit shrunk to $45 billion in May from $47,2 billion the month prior. The ISM import index fell back below the ne export orders index, which intimates that the deficit came back down in the month, note Wells Fargo`s John Silva.

In addition; Fed Chair Yellen speaks today at 11:00 a.m EST. Everyone is listening when Janet Yellen speaks. Listen very close to every word she say. Last time she said that the market is not in a bubble. I look forward to listen to her later today.

Reports today:
08:15 a.m EST ADP Non-Farm Employment Change
10:00 a.m EST Factory Orders m/m
10:30 a.m EST Crude Oil Inventories
11:00 a.m EST Fed Chair Yellen Speaks

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Gold bull

A big drop for Nikkei today. Down -3,3% and 6,2% for the week. Futures contracts expires and there are some Ukraine ans slowing China growth fear. U.S indices sled yesterday too. All the European markets are also down today.

Gold

Is this the beginning of the end? Yes, but I don`t think the market will crash now. We are in a stage three-phase which have started now. We see markets are going up but at the same time we see fewer stocks participating in the bull market.

 

This is what happens in a bull market when it comes to an end. The final leg can go on for months, so it is not expected to see the bear to attack yet. This is the reason why I am not buying U.S stocks now. It`s late in the party.

 

But if I`m righ, I have recognised a new party that have just begun. It hit the bottom at the end last year, and now we see it above 250, which is a good sign. 50 MA have not crossed the 200 MA yet, so we have to be cautious.

 

What I am talking about is the gold bugs. I like what I see, but I am very sceptical at the same time, or let`s say still less bearish. I follow this market every day and I know that most of the people in this business are not so positive and that bother me a bit.

 

Reports today:

 

08:30 AM ET PPI m/m
08:30 AM ET Core PPI m/m
09:55 AM ET Prelim UoM Consumer Sentiment
09:55 AM ET Prelim UoM Inflation Expectations

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Celebrating the bull Market

The Bull market is five years and four days old, since the market crash in 2008. Investors are satisfied with a gain of +175% in S&P 500 since then, but some investors are nervous. About what? Some of them know that a bull market lasts five years and three months.

shinybull_for_sitesite-7

The market will probably crash and some investors think so, but others say the bull market will continue. There are two reasons for that: First of all: there is a lot of money on the sidelines or in underperforming bond funds.

Many investors remember the bear markets in 2000 – 2002 and 2008 – 2009. They burned both times and now they will be late to the party once again. As they jump on board, stocks will continue to leap higher.

Secondly: Economic expansion is much slower this time. Usually 3% GDP growth is coming out of most of recessions. This time it goes much slower and we are about 1 – 2% GDP growth. That`s why we will see more legs for this bullish market.

Any way, this market is difficult. There are so much information out there that is too much disturbing, so it`s all about picking the right stocks now. The other thing to do is to look for the right market. I still look at emerging markets despite the fear out there.

The simple reason why I am doing that is because the stock market have gone much longer than the real economy and growth. GDP is about 1 – 2% in U.S and in China it is expected to see a GDP about 7,5%, down from 10%. But it`s still high.

Reports today:

08:30 AM ET Core Retail Sales m/m
08:30 AM ET Retail Sales m/m
08:30 AM ET Unemployment claims
08:30 AM ET Import prices m/m
10:00 AM ET Business Inventories m/m
10:00 AM ET Fed Gov Nomination Hearings
02:00 PM ET Federal Budget Balance

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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