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Wealth Building Strategies

Craig Johnson Still Believes US Stocks Will Climb for Years - Here's Why


Posted by Craig Johnson via Financial Sense

on Friday, 26 May 2017 07:51

BL04 bull jpg 2037450fThe following is a summary of our recent Financial Sense Newshour podcast, which aired on Saturday here and on iTunes here.

The S&P 500, Dow Jones Industrial Average, and Russell 2000 have moved sideways over the last couple of months as global markets have outperfomed. Looking at long-term trends and forces, however, US stocks should continue in a structural bull market that will last years more, Piper Jaffray's Craig Johnson recently told Financial Sense Newshour.

Long-Term Bull Market

We aren’t simply in a bull market, Johnson noted. Investors need to think of this specifically as a long-term, structural bull market.

There are two big forces coming to bear that will keep markets structurally bullish, Johnson stated. The current market has about 20 to 25 percent fewer stocks than in 2000. Also, we’re seeing companies buying back a huge amount of their own stocks.



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Asset protection

Why Bad Economic Theories Remain Popular


Posted by Steven Saville - The Speculative Investor

on Friday, 26 May 2017 07:46

EconomicCartoonLudwig von Mises and Friedrich Hayek, the most prominent “Austrian” economists of the time, anticipated the 1929 stock market crash and correctly predicted the dire consequences of government attempts to artificially stimulate economic growth in the aftermath of the crash. John Maynard Keynes, on the other hand, was totally blindsided by the stock market crash and the economic disaster of the early 1930s. And yet, Keynes’s theories gained enormous popularity during the 1930s whereas the work of Mises and Hayek was largely ignored. Why was it so?

Keynes became popular because he told the politically powerful what they wanted to hear. In particular, he provided power-hungry politicians with intellectual support for the schemes they not only already had in mind, but in many cases were already putting into practice. Despite being riddled with errors, Keynes’ theories also appealed to many economists because the implementation of these theories would confer a lot more influence upon the economics fraternity. The fact is that in a free economy there wouldn’t be much for an economist to do other than teach economics. He/she would certainly never have the opportunity to be involved in the ‘management’ of the economy.



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Timing & trends

Credit Downgrades May Prompt Market Capital Shift


Posted by Chris Vermeulen

on Friday, 26 May 2017 07:31

Recent news regarding Moody's credit downgrades in China will likely continue to roil the global markets and present multiple unique opportunities for strategic investors. As debt concerns grow throughout some areas of Asia and new US policy efforts shake up some common perceptions, a shift in capital is likely to occur over the next few months.

Today, I read about massive layoffs in India's technology sector as a reaction to decreasing engagement of foreign IT services/support is a result of President Trump's policies. When we take this news in combination with Moody's credit downgrades for China and the fact that almost all of South East Asia is interconnected in terms of economy and trade, we begin to see a picture that is fairly clear in terms of transitional economic shifts.

If India and a portion of South East Asia suffer a technology driven economic contraction as a result of US policy shifts, how can we evaluate the approximately $900+ billion economic shift that may be unfolding. As this unfolds, unemployment, consumer spending and growth rates will differ vastly from projected levels. A minor 2~3% decrease in business activity for the Asian technology sector may have massive results if it persists over a longer term period of time (say 3~7+ years). This is exactly why we, as investors, need to be aware of these economic shifts and be able to profit from these moves.

SIII (Indian Index)

The SIII has already rotated nearly 2% over the past two months from a near perfect Double-Top. The potential for a 10~20% market correction is rather strong knowing that massive layoffs in India will put further pressure on economic growth, consumer spending and economic outlook.

cv1 

(Click to enlarge)

HSI (HangSeng Index)



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Bonds & Interest Rates

Interest Rates Up & Bonds Up?


Posted by Martin Armstrong - Armstrong Economics

on Friday, 26 May 2017 06:18

UBCBT30-M-5-25-2017

While the Fed may be raising rates, there is still a flight to quality underway that is giving a bid to US Treasury issues. Low Treasury yields may remain the norm even if the Federal Reserve raises rates again. At about 2.25%, 10-year yields have dropped to 2017 lows, even with the central bank signaling an imminent rate hike. Many still see the stock market crash and that also supplies a bit of an underlying bid right now. However, The Fed has also made it clear it will maintain a gradual approach to shrinking its massive bond portfolio thereby reversing the Quantitative Easing. We are in never-never-land where the Fed tightening will not yet have a direct impact upon the bonds on a one-for-one relationship.

....continue reading and view 3 more charts

....related from Martin:

US Pension Crisis Picking Up Full Speed

 



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Gold & Precious Metals

Look At This Stunning All-Time Record In The Gold Market (Remarkable Chart)


Posted by Jason Goepfert - SentimenTrader via King World News

on Friday, 26 May 2017 06:09

King-World-News-Legendary-Short-Seller-Says-A-Resumption-Of-The-Gold-Bull-Market-Is-Now-Underway-864x400 cOn the heels of a wild week of trading in Bitcoin, what is happening in gold and the mining shares is going largely unnoticed but it is an all-time record and truly stunning.

From Jason Goepfert at SentimenTrader:  Money keeps leaving the gold miners. Structural trouble in gold mining ETFs got a lot of media attention a couple of weeks ago, and investors have taken notice. The main gold mining ETFs have lost $5 billion in assets in less than 30 days...

....continue reading HERE

...related:

Something Changed in the Silver Market in May: Here Are 3 Reasons Why

 



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