Fed WatchIf you look closely, there is one category of stocks outperforming the others. It may be surprising to many, but it's the utility sector.
Investors have cheered the fact that bond rates are falling and likely to fall further.
Profit Alerts
Fed Watch
What the Yield Curve Inversion Really Means for Your Money
Start the conversation
Comment on This Story
This site uses Akismet to reduce spam. Learn how your comment data is processed.
The financial press is rife with warnings that the yield curve inversion is about to bring on a recession.
That's only partially true, at best.
What Wall Street Gets Wrong About the Inverted Yield Curve
Start the conversation
Comment on This Story
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Things that'll be "different this time" usually aren't, especially when it comes to hot stoves, hot steering wheels, and hot bond markets. Touch 'em and you'll get burned, or so goes the thinking.
Every once in a while, though, the situation plays out.
Take the inverted yield curve that caused last Friday's vicious selloff and made countless headlines around the world when it happen for the first time since 2007.
Contrary to what Wall Street and legions of economists want you to believe, it may NOT be the harbinger of doom that it's been for the past 50 years.
Here's my case (and what to buy if you're interested in big profits)…
[CHART] The Fed Won't Hike Rates Next Week – That's a Catch-22 for Investors
Start the conversation
Comment on This Story
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Don't expect the Fed to hike rates next week during the March FOMC meeting.
But while low interest rates are great for stocks, the Fed's dovish turn means it thinks the economy is too weak.
This chart tells the whole story…
The Fed Is About to Torch the Dollar, Stocks, and Bonds – Here's What to Do
Start the conversation
Comment on This Story
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Market noise is never-ending – as are worries over and questions about the market.
What to buy? What to sell? What to hold? What will the Fed do? Where are markets headed? When will the next recession hit? Why? Why?
What should I do?
In this increasingly volatile market, nervous investors still look to prompt-reading advisors and pundits who work within the safe and stupefied confines of mainstream consensus.
Market timers and market predictors, too, are everywhere; they always have been and always will be. Some are bulls; some are bears.
Investors are seeking answers – and instant, calming solutions. These "experts" and "systems" are offering just that – most of which is the same.
"Markets rise and fall," the experts say as a chorus, "just be diversified – hold stocks and bonds – and carry on. The economy is strong, employment is high, inflation is low, and the markets will stay the steady course over time."
This all may feel and sound comforting, but so does dope. Their advice might seem to "make good sense," but the data (i.e. objective facts) as to the economy, employment, inflation, and the strength of stocks and bonds suggest otherwise.
So we need simple, blunt guidance. And we need to know how to protect ourselves.
Fortunately, the answer is right in front of us, which is to say, right behind us...
The "High-Yield" Craze Is Masking a Thoroughly Fatal Market Sickness
Start the conversation
Comment on This Story
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Looking for yield? Be careful what you ask for…
Every slick Wall Street operator is hawking junk bonds and leveraged loans as the ultimate drug for yield-starved investors – those seeking "juicy returns" in an otherwise risk-saturated bond market.
What they'll find is suicide by credit overdose.
I'm not surprised we've come to this point.
Now, those who know me know I'm not a big fan of the U.S. Federal Reserve. Acting as Wall Street's un-official "drug pusher" for decades, it went hog wild post-2008, dispensing low-rate, cheap, and always freshly printed money at grotesque levels.
As a result, today's "stimulus-addicted/Fed-supported" securities markets – thoroughly embroiled in bubbles – have crossed the Rubicon of debt and are now limping toward their own suicide, as you'll see.
But it doesn't have to get you.
Venezuela Shows Us Just How Important It Is to Own Gold During a Crisis
Start the conversation
Comment on This Story
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Gold has been a store of value and wealth for more than 5,000 years, dating back to ancient Egypt.
But the benefits of owning gold are made crystal clear by the crisis in Venezuela.
Here’s why and how you can avoid making the same mistakes the Venezuelans did…
These 3 Bank Stocks Just Got "Perfect Grades" After the Fed's Last Hike
Start the conversation
Comment on This Story
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Fear not, the Federal Reserve knows all. When it comes to interest rates and the state of the economy, there is no better source of information.
And the Fed has indicated that on top of the four rate hikes we saw in 2018, two more hikes are coming in 2019.
That's a major catalyst for bank stocks, and the three we have for you today are the best of the bunch.
Here's Why Capital Preservation Is Still the Name of the Game, Part 1
Start the conversation
Comment on This Story
This site uses Akismet to reduce spam. Learn how your comment data is processed.
I'm hoping to heck that the recent bone-jarring losses in the stock market aren't hurting you! If you have followed my advice, you're sitting pretty. While all about you are losing their heads amid the noise and strife, you took your money home and let it hug you.
If you haven't taken my advice, but you've been in the market for the better part of the past nine years, there's still time to harvest the massive gains that you've accrued. Then you can rest easy through the difficult times that lie ahead.
In light of the Fed's actions Wednesday and Fed Chair Jerome Powell's words at his press conference, the overwhelming weight of the evidence continues to show that capital preservation is the name of the game.
As we've been over many times, it's not about rates. The arguments about the Fed's pace of rate increases are pointless. This is about the shrinking supply of money in the system versus the increasing demand for it. When money is in short supply, investors liquidate assets to raise cash. The Fed has made sure that money is in short supply, and has made clear that it is not about to deviate from its course.
Here's Why There Will Be More Bad Days for the Markets
Start the conversation
Comment on This Story
This site uses Akismet to reduce spam. Learn how your comment data is processed.
Monday was a terrible day in the stock market. The S&P 500 had a new closing low for the year. It briefly touched a new intraday low. In my book, this is a bear market, despite the media nonsense that it's only a bear market if it's down 20%. By the time the market averages are down that much, many mutual funds and individual stocks will be down more. Would you want to sit through that?
I hope that you followed my advice earlier in the year and took your money home and let it hug you while everyone else was feeling the pain. If you have, great!
I'd accept these gifts gratefully and take advantage to lighten up big time. Bear markets typically last 18 to 30 months, and this one is just starting. I see no reason why it might be more benign than is typical.
Start the conversation