Predicting what the Federal Reserve will do at any of its regular meetings has turned into a cottage industry.
But honestly, no one can. Money Morning Quantitative Specialist Chris Johnson can't.
But that hasn't stopped him from devising a strategy to profit from the Fed's mixed signals.
The central bank's latest move came Wednesday, with an interest rate cut of 25 basis points.
And even with President Trump breathing down their necks, the tone is hesitant with regard to future cuts.
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As investors anxiously await tomorrow’s speech from the Federal Reserve Chair, the Fed rate cut threatens a recession.
Chief Investment Strategist Keith Fitz-Gerald answers investors’ questions on the current stock market climate, and giving two stock picks that are trading at fantastic prices…
See this video to get Keith’s insider opinion about what will happen next…
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Everyone was waiting with bated breath to see how China would retaliate to the White House’s latest tariffs threat.
Well, we got it – the Chinese are making moves to devalue the yuan to its lowest level in a decade, sending stock prices, bond yields, oil prices, and overall optimism crashing through the floor.
But here’s one thing to note: Investors aren’t scared of the right things right now.
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In his more than 30 years of experience as a financial professional, our Chris Johnson’s never seen a market anticipate an interest rate cut the way this one has.
Now, the “group think” in question is that this market “deserves” a cut, not that it needs it. This can be a dangerous perspective to have.
In fact, one of Chris’ 10 Commandments states: “Never run with the crowd.”
Here’s what we can learn from Wall Street analysts and investors in this situation…
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American investors have never experienced such a profitable run…
The bull market in stocks, now in its 11th year, is officially the longest on record. Many shareholders have tripled their money since 2009. This bull market has created more U.S. millionaires than ever before. Households with a net worth exceeding $1 million have increased to 11.8 million in 2018 – that's more than the population of Greece or Portugal…
On the surface, the economy is humming, too.
The reported U.S. unemployment rate fell to 3.6%, the lowest it's been in 50 years…
The median household income is now above where it was in 2007 (and climbing), and U.S. national home prices are holding up well.
There's just one BIG problem: More than half of all this new wealth is set to vanish. It could start to happen as early as Labor Day.
And this wealth isn't just going to up and disappear on its own. It's essentially going to be taken from the American people via an unholy combination of callous greed, breathtaking stupidity, and outright malicious lies.
Yes, this is disaster by design - and there are fingerprints all over it...
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It’s really no surprise that stocks aren’t doing much of anything right now. Sure, there’s the typical summer slowdown, but even with a Fed rate cut two days away and earnings season in full swing, it’s fairly quiet. This is because the market has already priced in the rate cut and investors are giving it a 100% chance. So Shah’s here to fill you in on what’s really happening and why…
So Shah’s here to fill you in on what’s really happening and why…
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The bond market is about to rally as the Federal Reserve prepares to cut rates next week.
Are you ready?
In preparation for the long-telegraphed Fed rate cut, investors are wondering what to do next.
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The expectation is for the central bank to now cut interest rates.
It’s not exactly a secret.
Usually in these situations, the market will sell off when the news actually becomes reality.
But there is one sector where investors should buy the news, not sell.
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On July 10, everyone's eyes and ears were on one thing – the Fed. And there's a good reason why.
You see, after the U.S.-China trade war heated up last May, the market fell further than it had all year. And the Fed was the only thing that was able to pull it back up.
Yesterday, Fed Chairman Jerome Powell delivered his long-awaited testimony before the House Financial Services Committee.
And the market was listening for one very important catalyst…
Rate cuts.
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As waves of capital poured into U.S. Treasuries this year, causing bond yields to fall precipitously, the flight-to-quality trade sparked fears of recession and worse.
Federal Reserve officials registering inflows into Treasuries as a sign of investor fear had to soothe markets with talk of interest rate cuts.
Bond markets, anticipating future rate cuts, saw more capital inflows.
Treasury prices rose further with the bond rally, lifting stocks back up toward record territory.
That's what everyone sees on the surface, but there's a lot more to the story, and it's not all good.
Here's the real backstory, how we got to where we are today, and what's likely to happen next...
Fed Watch
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