Money Morning https://moneymorning.com Money Morning is here to help investors profit handsomely on this seismic shift in the global economy. In fact, we believe this is where the only real fortunes will be made in the months and years to come. Money moves markets. But Money Morning lets you move first. en Fri, 24 Jan 2020 20:41:47 +0000 Fri, 24 Jan 2020 20:41:47 +0000 5 [CHART] The Fed Won't Hike Rates Next Week – That's a Catch-22 for Investors https://moneymorning.com/2019/03/14/chart-the-fed-wont-hike-rates-next-week-thats-a-catch-22-for-investors/ Don't expect the U.S. Federal Reserve 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.


The Fed was initially expected to hike rates at least two times this year. But investors are breathing a sigh of relief over next week's FOMC meeting. That's because Fed Chair Jerome Powell is expected to hold off on announcing any additional interest rate hikes.

While that's great news for immediate returns, savvy investors aren't getting too comfortable.

You see, the Fed's sudden change in tune is a sign that there may be trouble under the hood for the American economy...

Low Interest Rates Could Mean Trouble on the Horizon

Last September, markets shook on reports that the Federal Reserve intended to raise interest rates three times in 2019.

Citing robust economic growth and hiring, the FOMC indicated that the Fed's interest rate would push toward 3.1% by the end of next year.

These predictions sent the Dow Jones tumbling into a correction in October. Higher interest rates make borrowing money more expensive, which makes it harder for companies to finance growth. And after a decade of low interest rate--fueled growth, more rate hikes could signal the end of the record-long bull market.

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However, the Fed's aggressive approach has softened since October.

At an economic research summit last week, Powell said in spite of the "favorable picture" the Fed has endorsed over the last year, there have been significant "cross-currents in recent months."

He went on to say, "the Committee has adopted a patient, wait-and-see approach to considering any alteration in the stance of policy."

Expert Fed watchers have changed their predictions over the last few months too. They were all but certain the Fed would hike rates in 2019, but now they've completely reversed themselves.

Take a look at how quickly they changed their minds in the chart below...


The Fed's new dovish approach has been great for stocks. Since Powell changed his tune in January, the Dow Jones has rebounded a robust 1,184 points.

Next week's confirmation of a more cautious approach to interest rates is likely to add more jet fuel to this rally and send returns even higher.

However, it's important for savvy investors to look at Powell's comments in the bigger picture.

You see, Powell is suggesting he sees something wrong with the nation's economy.

And it looks like he's on to something.

Last Friday (March 8), the Labor Department released February's job report.

Contrary to expectations, the report showed that the nation only added 20,000 payroll jobs in January - well below the average estimate of 180,000.

Although February's report still adds another month to 101 months of job growth, the sudden slowdown in hiring suggests that the decade-long run of economic growth is losing steam.

Combined with ongoing Chinese trade tensions, overextended tax cuts, and weakening growth around the globe, last week's jobs report suggests that there's a perfect storm of economic upheaval on the horizon.

And even if the Federal Reserve does surprise the market and raise interest rates tomorrow, that isn't a sure sign that the American economy has room to run.

In fact, a rise in interest rates next week would likely spark the sell-off that is increasingly likely due to worsening economic conditions.

It's a catch-22 for investors. Low interest rates are better for stocks, but the Fed's sudden reversal on hiking rates means it thinks the economy is weakening. And while an interest rate hike might mean the Fed is content with the economy's strength, higher rates will put a lid on stocks.

That means it's a good idea for investors to make sure their portfolios are protected from the worst-case scenario...

Your Financial Future Is at Stake (Are You Prepared?)

If you're like most Americans, you've felt a sense of market turmoil ahead. We could be in for another white-knuckle ride... a "Great Reckoning," if you will.

The vast majority of folks don't see this coming, and those few who do are not preparing properly... nor profitably.

So ask yourself, right now: Are you where you want to be financially?

If the answer is yes, that's great.

If the answer is no, then understand that you are not alone - and you need to click here now...

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Thu, 14 Mar 2019 17:02:43 +0000 https://moneymorning.com/2019/03/14/chart-the-fed-wont-hike-rates-next-week-thats-a-catch-22-for-investors/ Here's Your Chance to Take Short Sellers' Money https://moneymorning.com/2018/10/02/heres-your-chance-to-take-short-sellers-money/ Readers of my columns know that one of the guiding principles of my trading is to follow short interest. In fact, one of my 10 Trading Commandments (No. 6, to be precise) is "Short sellers are usually a bull's best friend."

Why have I been so successful using short interest? It's all about the "squeeze" that happens when a heavily shorted stock starts to rise.

That's when short sellers are forced to "cover" their losing positions on a stock. This results in unusually strong buying volume that drives a stock price higher.

I filter the bi-weekly short interest data from the exchanges to identify stocks with unusually high short interest.  What's unusual?  My Best in Breed (BIB) model searches for short-interest ratios (short interest divided by the average daily trading volume) above 6.0.

In addition, the model searches for increasing short interest, indicating that the shorts are adding to their bets against the stock.

Today, my BIB model told me that biotech is the most heavily shorted sector in the market right now. In fact, the SPDR S&P Biotech ETF (XBI) is the only ETF with a double-digit weighted component short interest ratio.

The current ratio of 10.7 is rare among ETFs, so I drilled down on the sector to look at individual stocks that are contributing to the elevated short interest.

While there are several stocks with high short interest, I filtered the results for those in a strong technical uptrend as defined by trading above their rising 50-day moving averages.

My models show that the odds of a stock moving higher double when the 50-day moving average is trending higher.

It's this combination of high short interest (bearish sentiment) and bullish technical strength that creates a short squeeze situation and gives me the "best of the best" bullish stocks.

Running the filter produced two names that stood out, so let's take a look at each one...

After Its Initial Jump, This Stock Hasn't Looked Back

First up is Exact Sciences Corp. (NASDAQ: EXAS), which develops diagnostic tools for detecting various cancers, most notably colorectal cancer and precancer.

Founded in 1995 in Madison, Wis., the company has a market cap of just under $10 billion.

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Exact Sciences is up around 50% for the year, mainly because of an agreement it entered in mid-August with Pfizer to co-promote Cologuard, its colorectal screening test. The stock jumped sharply in the week following the news and has been climbing since.

Exact Sciences gained 5% in September, using its rising 20-day moving average for support and setting a series of all-time highs. Note that the 50-day moving average is also trending higher.

short-sellers

Of course, Exact Sciences is on my radar because of its short-interest ratio, which more than doubled to a robust 9.4 in the latest data report.

With the stock trading just below record-high territory, the prospects for a short-covering rally are highly likely.

What's more, last month several analysts raised their price targets for the stock, suggesting to me that Exact Sciences is in for a strong fourth quarter.

To be fair, let me add that last week one research company called Exact Sciences its "best new short idea," which caused the shares to drop 3% in one day. But the stock found strong support at the 20-day moving average and regained the loss in two days to reiterate the stock's underlying strength.

With the company reporting earnings in late October, the Nov. 16, 2018 $80 call allows plenty of time for a short squeeze to propel the shares to new highs.

This Year Saw This Beast of a Stock Double in Value

The second stock on my radar is Sarepta Therapeutics Inc. (NASDAQ: SRPT), which develops gene-based treatments for neuromuscular diseases. Sarepta has gained more than 160% after doubling in 2017.

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Other than a pullback in June and July, which was well supported by the 50-day moving average, it's been all uphill for Sarepta for more than a year. Now, the 20-day moving average is doing its part to keep the stock's strength intact.

Money

Despite the monster rally, short interest has been going up, as well. In fact, the short-interest ratio has been steadily advancing since July 2017, a period in which the share price has exploded more than four-fold.

With the current ratio sitting just below 9.0, there's plenty of shorted shares to fuel a covering rally.

biotech

There's no doubt that biotechs involved in high-level research and development are constantly walking a regulatory tightrope.

All it takes is one negative FDA ruling to send the share price tumbling. Perhaps that's what the shorts are banking on.

But the company has navigated these dangerous waters so far, and so long as you keep your position size small, it's a risk worth taking... especially with so many doubters betting against the stock.

Option prices are not cheap on Sarepta and bid/ask spreads are on the wide side. Nevertheless, look at the Jan. 18, 2019 $150 call as an intermediate-term bullish play that should accommodate some short covering.

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Tue, 02 Oct 2018 20:35:59 +0000 https://moneymorning.com/2018/10/02/heres-your-chance-to-take-short-sellers-money/ World Stock Markets Lifted Following Japanese Elections https://moneymorning.com/2017/10/23/world-stock-markets-lifted-following-japanese-elections/ (Kitco News) – World stock markets were mostly higher overnight. U.S. stock indexes are also pointed toward firmer openings and new record highs when the New York day session begins.

Gold prices are lower in pre-U.S.-session trading, amid the better risk appetite seen in the marketplace in recent sessions. A firmer U.S. dollar indexx to start the trading week is also bearish for the gold and silver markets.

In overnight news, the Japanese yen saw pressure against the U.S. dollar after Japanese elections showed Prime Minister Abe and his coalition government with a lop-sided victory in snap elections. World stock markets were buoyed on the news from Japan, as Abe is considered to be more dovish on monetary policy.

The Euro currency was pressured overnight on reports the Spanish prime minister is seeking powers to remove the leaders of the secessionist Catalonia region.

Traders and investors this week are anticipating who will be President Trump's nominee for the next chairman of the Federal Reserve. Jerome Powell has moved to the top of the list among many Fed watchers.

Also this week the European Central Bank holds its regular monetary policy meeting on Thursday. Many expect the ECB to announce more details on the winding down of its bond-buying program.

The U.S. dollar is higher in early U.S. trading. The other key "outside market finds Nymex crude oil futures prices near steady and trading just below $52.00 a barrel.


U.S. economic data due for release Monday is light and includes the Chicago Fed national activity index.

By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Mon, 23 Oct 2017 12:01:39 +0000 https://moneymorning.com/2017/10/23/world-stock-markets-lifted-following-japanese-elections/ Who Will Be the Next Fed Chair? The 3 Most Likely Candidates https://moneymorning.com/2017/10/04/who-will-be-the-next-fed-chair-the-3-most-likely-candidates/ Ladies and gentlemen, place your bets. U.S. President Donald Trump announced last week he will name the next Federal Reserve chair in the next two or three weeks.

who will be the next fed chair

And there are three leading candidates for the job, who we'll detail for you in just a minute...

Since the financial crisis in 2008, the Fed has exercised enormous power over the economy through interest rates and the supply of money available for the economy. Market pundits were left scrambling for legitimacy as ZIRP (zero interest rate policy) and QE (quantitative easing) stomped out the efficacy of traditional forms of investment analysis.

These were programs of low (or even zero percent) interest rates and massive expansion of the Fed's balance sheet as it purchased Treasury securities directly from the Treasury itself. Later, it bought them from the secondary market along with mortgage-backed securities. Its counterpart in Europe - the European Central Bank - also bought corporate bonds.

And there's no denying the controversy the next Fed chair is going to inherit...

Next Fed Chair Will Inherit Plenty of Controversy

All of these moves were supposed to flood the economy with liquidity and grease the wheels of expansion.

However, some view them as controversial because the moves seemed to only benefit upper-income earners and banks. These were the institutions that were not only bailed out during the financial crisis but were able to borrow money from the government at near-zero rates and buy risk-free Treasury securities for a risk-free profit. Plus, lending did not pick up appreciably.

Money flowed into the stock market and bank coffers while the economy bumped along the bottom with anemic growth. Annual U.S. GDP growth has hovered between 1.6% and 2.6% since 2010. In the same time, the Dow has climbed 120%.

Urgent: Feds use obscure loophole to threaten retirees. If you have a 401(k), IRA, or any type of retirement account, this could cause you to miss out on $68,870 or more. Learn more...

Fed policy is concentrated in the hands of a small group of unelected officials. The biggest job the next Fed chair will have will be unwinding the asset purchases and normalizing interest rates without causing major problems for the economy and the recovery itself.

Right now, there are three front-runners for the post of Fed chair: former Fed Governor Kevin Warsh, current Governor Jerome "Jay" Powell, and current Chair Janet Yellen. Clearly, all are intimately familiar with the FOMC.

Trump's top economic adviser, Gary Cohn, is an unlikely candidate due to a public clash over the president's response to the white-supremacist riot in Charlottesville, Va.

Here's a closer look at each of these three candidates...

Who Will Be the Next Fed Chair? Option No. 1: Kevin Warsh

Because of Warsh's more hawkish views, the market could move the most if he is selected. He has been subtly critical of the Fed in recent years.

He is more inclined to continue raising short-term interest rates. He also favors looser regulation in the banking industry. Since the reduction of regulations of all kinds is part of the Trump agenda, this could make him the front-runner.

Some also say he will throw out the Fed's current playbook and significantly change things up. Indeed, Warsh resigned from his Fed post in 2011 because of his opposition to the bond-buying program. He has called for a revamp of how the Fed makes policy.

He was also a member of President Trump's now disbanded Strategic and Policy Forum, a group of business executives that advised on economic and policy issues.

But he's not the only person to keep an eye on...

Who Will Be the Next Fed Chair? Option No. 2: Jay Powell

It seems that Powell just represents continuity in an ever-changing Fed lineup. In this context, continuity is almost a continuation of existing policy. However, that is not what the president is looking for in a candidate.

Powell is the remaining Republican-appointee in the Fed, which may make him the alternate play should Janet Yellen suddenly declare she will not continue on past the end of her current term.

He does favor some reduced regulation and gave a speech this week on reducing the burden of the "Volker Rule," banning banks from speculating with their own money.

He also echoed Trump's view that getting to a faster growth rate is critically important.

Who Will Be the Next Fed Chair? Option No. 3: Janet Yellen

Yellen became Fed chair in February 2013, after serving as vice chair starting in October 2010.

She is considered by many to be a "dove" (more concerned with unemployment than with inflation) and less likely to push for interest rate hikes. However, in a recent speech, she indicated she does want to keep the pace of rate hikes moving despite the "mysterious" weakness of inflation.

The possibility of Yellen returning as Fed chair seems to have weakened though, due to her resistance to change with regulatory issues. She made it clear her position was quite different than President Trump's. Clearly, the president will want someone who is going to embrace his deregulatory path.

Yellen and Trump may have too many differences, in that they appear to be far apart on the topic of banking deregulation.

Who Will Be Named the Next Fed Chair?

The PredictIt marketplace, a real-money betting site that allows speculators to bet on the outcome of political contests, now shows Warsh with a substantial lead over second place Powell at $0.49 versus $0.35. A price of one dollar suggests a certainty that the candidate will be chosen.

This is a big change from a few weeks ago, when Warsh and Yellen, now at just $0.17, were neck and neck. Clearly, the betting public believes Warsh will win thanks to his very different views than current Fed policy. Yellen's beliefs do not mesh with the president's. And Powell, as a current Fed insider, is likely tainted in Trump's eyes under Yellen's watch.

An $80 Billion Cover-Up? Under the watchful eye of Congress, the government will soon be implementing a controversial plan that threatens the retirement of millions of Americans. And they're using an obscure loophole buried in Title 29 of the U.S. Labor Code to do it. If you have a 401(k), IRA, or any type of retirement account, this could cause you to miss out on $68,870 or more. Learn more...

Follow Money Morning on Twitter @moneymorning, Facebook, and LinkedIn.

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Wed, 04 Oct 2017 17:32:05 +0000 https://moneymorning.com/2017/10/04/who-will-be-the-next-fed-chair-the-3-most-likely-candidates/ Jim Rogers: "Clueless" Fed Will Drive United States to Disaster https://moneymorning.com/videos/jim-rogers-clueless-fed-will-drive-united-states-to-disaster

Renowned investor Jim Rogers went after the Fed in a June 9 interview with Business Insider's "The Bottom Line."

"[The Federal Reserve] has no clue what they're doing," said Rogers.

"They've driven interest rates to the lowest in recorded history and every other central bank in the world has followed them. This has never happened in recorded history, and it hasn't worked and [it's] going to end very, very, very badly," he cautioned.

Indeed, the Fed has cut interest rates to near zero in hopes that low rates will spur consumer spending, a strategy we've long regarded as dangerous and feckless.

"Janet Yellen's Fed lost control several years ago, and they've been playing catch-up ever since," said Money Morning Chief Investment Strategist Keith Fitz-Gerald in December of last year. You see, Keith is a staunch critic of the Fed and, like Rogers, believes the central bank has outlived its shelf life...

Out with the Fed!

The Fed should be abolished and all members should resign, according to Rogers. "The world can get along without a central bank," he said.

Keith agrees - he has been calling for the end of the Fed since the financial crisis of 2008.

"The individual depositors - meaning you and me - who were the intended protected class when the Fed was formed in 1913, are nothing more than financial cannon fodder today. Now it's the big banks and crony capitalists in Washington who have become the protected few," said Keith in August 2016.

"[The Fed] is an insult to every investor who believes in capitalism, in economic progress, and political freedom," he added.

That said, Rogers and Keith differ in how they choose to react to the Fed. Rogers has taken the "duck-and-cover" approach, warning that the Fed's failure may lead the United States into a terrible downward spiral. "These guys are - they're setting us up for a horrible, horrible disaster," said Rogers. "It's going to be the worst in my lifetime."

Keith's advice: Don't panic. Be smart. And stay in the markets.

You see, every time the headlines get clogged with bad news, especially news about the Fed, you see massive sell-offs because investors are scared and uncertain. Just look at what happened after the Fed raised rates in December 2015 - the S&P 500 lost 7.3% over the course of just three weeks.

But what investors don't realize is that the markets have an overwhelmingly upward bias. "You should always stay in," said Keith. And the trick to making huge profits, especially in times of economic uncertainty, is to find "must-have" companies that fall into what Keith calls the six "Unstoppable Trends": medicine, technology, demographics, scarcity/allocation, energy, and defense.

"These trends are backed by trillions of dollars that Washington cannot derail, the Fed cannot meddle with, and Wall Street cannot hijack."

Keith said it best: "Invest accordingly, or get left far behind."

Editor's Note: "Must-have" companies backed by Unstoppable Trends are a cornerstone of Keith's wealth-building strategy. But there's another type of investment he wants Money Morning Members to know about. It's one of his favorites, a kind of "desert island fund" he'd buy if he had to park his money in one place, "retire" from civilization for 20 years, and come back to a pile of money. Click here to learn more...

Follow Money Morning on Twitter @moneymorningFacebook, and LinkedIn.

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Tue, 13 Jun 2017 21:16:31 +0000 https://moneymorning.com/videos/jim-rogers-clueless-fed-will-drive-united-states-to-disaster Here Are the Fed Rate Hike Odds https://moneymorning.com/2017/05/30/here-are-the-fed-rate-hike-odds/ As of Tuesday, May 30, 2017, the Fed rate hike odds sit at 88.8%, according to CME Group's FedWatch Tool.

And there are two reasons why the markets are so confident the Fed will raise rates in June 2017...

Fed rate hike odds
The first reason stems from the Federal Reserve's December 2016 announcement that it wanted a total of three rate hikes in 2017. Rates were raised in the March FOMC meeting from 0.75% to 1%, but were left unchanged at the May FOMC meeting.

And if FOMC officials want to meet their objective of three rate hikes, they have to raise rates soon.

After the June 2017 FOMC meeting, there are only four more meetings for the year. To spread out the rate hikes, the markets are placing the highest odds on the Fed raising rates in June and then again in December 2017.

The second reason to expect a Fed rate hike in June is strong job growth numbers and low unemployment totals.

According to the May 2017 FOMC meeting minutes, the Fed will raise rates when it sees evidence of strong economic growth.

And compared to last year, it looks like job growth is stronger, and unemployment rates will be lower.

Last year, analysts expected 162,000 jobs to be created in May 2016, and the unemployment rate was 4.7%. This year, analysts expect 185,000 jobs will be created, and the unemployment rate will be 4.4%.

Job growth totals and the unemployment rate will be announced on Friday, June 2, 2017. Barring underwhelming totals, the Fed will have enough justification to move forward with an interest rate hike.

However, the Fed could always change its mind and keep rates unchanged. And because that would create uncertainty, stock and bond prices could become volatile.

Trending: The 7 Best Dividend Stocks to Buy in 2017

"Earnings drive stock prices. Interest rates drive bond prices. And this can make it extremely difficult to know exactly how to protect your portfolio (and still profit) in the markets - especially in the face of a 90% or better chance of an interest rate hike," Money Morning Options Trading Specialist Tom Gentile said on May 26.

This uncertainty is why Gentile has a strategy for our readers that can not only protect your portfolio, but also provide profits.

Here's everything you need to know about Gentile's protection and profit strategy...

Make These Moves Now as the Fed Rate Hike Odds Increase

Exchange-traded funds (ETFs) are an easy solution for portfolio protection and profits if the Fed raises rates.

"ETFs basically let you trade an entire sector instead of having to pick and choose specific stocks to trade within a sector. ETFs are also a great way for you to hedge against rising interest rates," Gentile said on May 26.

For stocks, Gentile recommends monitoring the SPDR Dow Jones Industrial Average ETF (NYSE Arca: DIA). For bonds, he recommends monitoring the iShares 20+ Year Treasury Bond ETF (NYSE Arca: TLT).

"Now, bonds and stocks don't always have an inverse correlation, but most of the time they do. So when the Fed decides to jack up rates on June 13, DIA and TLT are the best two considerations to have in your portfolio for both protection and profits," Gentile said.

When the Fed raised rates on March 15, the DIA fell by 1.86% over the next month. In comparison, the TLT stock price climbed 5.01% over the next month. If there is a rate hike, investors can open a bullish position on TLT and a bearish position on DIA.

For investors who believe rate hikes will remain unchanged, a bullish position on DIA and a bearish positon on TLT can be opened.

"In either case, you've got a way to hedge against, and profit from, any action the Fed takes next month - and any time after that. Of course, you'll want to talk to your broker before you make any changes to your portfolio," Gentile said.

This "Secret" Helped Transform Two Teachers into Millionaires: Donna and Dave R. were both teachers in Boston. But today they're retired millionaires who are also earning $10,000 a month in income. Their secret? Much of their wealth is due to a Great Depression-era "program" most have no idea exists. Learn more...

Follow Money Morning on Facebook, Twitter, and LinkedIn.

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Tue, 30 May 2017 16:36:25 +0000 https://moneymorning.com/2017/05/30/here-are-the-fed-rate-hike-odds/ Dow Jones News: Dow Surges 232 Points as Wall Street Cheers President Trump's Tax Reform Push https://moneymorning.com/2017/04/25/dow-jones-news-dow-surges-232-points-as-wall-street-cheers-president-trumps-tax-reform-push/ Dow Jones News for April 25, 2017: The Dow rallied over 200 points thanks to increased optimism President Donald Trump will be able to push pro-growth economic policies through Congress in 2017.

Let's look at the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:

Closing Bell April 25, 2017 Trading Point Gain/Loss Percentage Gain/Loss
Dow Jones 20,996.12 + 232.23 + 1.12%
S&P 500 2,388.61 + 14.46 + 0.61%
Nasdaq 6,025.49 + 41.67 + 0.70%

3 Stock Market Stories to Watch

  1. Shares of Goldman Sachs Group Inc. (NYSE: GS) climbed 1.5% as markets grow more optimistic over tax reform.
  2. Shares of McDonald's Corp. (NYSE: MCD) climbed more than 5% as same-store sales climbed.
  3. Oil prices ticked higher for the first time in more than a week. Markets are expecting a decline in U.S. inventory levels after a massive buildup in the first quarter.

Dow Jones news
Now, here's a look at today's most important market events and stocks, plus a preview of Wednesday's economic calendar.

DJIA Today: Dow Rallies as Markets Expect Corporate Tax Reform in 2017

  • The Nasdaq surpassed the 6,000-point threshold for the first time in history thanks to strong gains by tech giants Apple Inc. (Nasdaq: AAPL) and Microsoft Corp. (Nasdaq: MSFT) and biotech giant Biogen Inc. (Nasdaq: BIIB).

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  • Markets are also optimistic after Sunday's first round of the French presidential election. Polls indicate that centrist candidate Emmanuel Macron has a very large lead against his rival, Marine Le Pen. Markets are cheering the fact that Macron is pro-bailout and may press German Chancellor Angela Merkel to loosen the purse strings for Italy and Greece. While that is bad news for capitalism, another big bailout would provide a big wave of capital to the European markets.
  • Gold prices and silver prices fell as investors turned away from safe-haven assets and piled back into the equity markets. The downturn in prices compounded problems for Barrick Gold Corp. (NYSE: ABX). The gold producer slashed its output expectations and reported that operations were weaker than analysts had anticipated.
  • Crude oil prices snapped a six-session losing streak ahead of a key report in U.S. inventories by the American Petroleum Institute. Oil prices have been sagging in recent days due to rising concerns that OPEC may not extend its deal to help cap a global supply glut. Tomorrow, investors will keep a close eye on the official inventory report from the U.S. Energy Information Administration.
  • The WTI crude oil price today added 1.14%, while Brent crude gained 1.45%.
  • But the big story is the possibility of a government shutdown later this week. Currently, markets are trying to determine whether Republicans and Democrats will be able to reach a deal without funding a border wall between the United States and Mexico. With the government unable to get its financial house in order, ordinary Americans are all asking the same question: "How will the government shutdown affect me?"
  • There are seven major ways you may be affected by a government shutdown... We explore all seven of those situations, right here.

Stock Market News and Top Stocks to Watch Today: April 25, 2017

  • Shares of General Motors Co. (NYSE: GM) are generating buzz after the company announced it had fired thousands of employees in Venezuela after the nation's government seized one of its factories. Despite the news that the company has pulled completely out of Venezuela, some investors are concerned that General Motors stock could face increased pressure.
  • In earnings news, shares of McDonald Corp. (NYSE: MCD) rallied more than 5% after the fast-food giant easily topped Wall Street earnings expectations. The firm reported that its turnaround effort has been largely successful. However, McDonald's did report a year-over-year revenue decline of 3.9%.

  • Meanwhile, shares of Caterpillar Inc. (NYSE: CAT) jumped more than 8% after the heavy manufacturing giant crushed quarterly earnings expectations.
  • Other top stocks to watch Tuesday included AdvancePierre Foods Holdings Inc. (NYSE: APFH) and Express Scripts Holding Co. (Nasdaq: ESRX). Here's more on why these stocks were generating headlines.

Wednesday's U.S. Economic Calendar (all times EDT)

  • MBA Mortgage Applications at 7 a.m.
  • EIA Petroleum Status Report at 10:30 a.m.
  • Two-Year FRN Note Auction at 11:30 a.m.
  • Five-Year Note Auction at 1 p.m.

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Tue, 25 Apr 2017 20:39:46 +0000 https://moneymorning.com/2017/04/25/dow-jones-news-dow-surges-232-points-as-wall-street-cheers-president-trumps-tax-reform-push/ Dow Jones News Today: Markets Still Sluggish After Congress Fails to Take Obamacare Repeal Vote https://moneymorning.com/videos/dow-jones-news-today-markets-still-sluggish-after-congress-fails-to-take-obamacare-repeal-vote Dow Jones news today
In Dow Jones news, markets slumped Friday (March 24, 2017).

Speaker of the House of Representatives Paul Ryan informed President Donald Trump that Republicans did not have the necessary votes to repeal and replace the Affordable Care Act.

The House has pulled the bill from a vote, according to various reports.

Fears of a stock market sell-off have been growing over the healthcare battle on Capitol Hill.

Money Morning Chief Investment Strategist Keith Fitz-Gerald recently discussed the likelihood of a stock market sell-off without the healthcare vote.

Watch the interview, right here.

Let's look at the numbers from Friday for the Dow, S&P 500, and Nasdaq:

Dow Jones: 20,596.72; -59.86; -0.29%

S&P 500: 2,343.98; -1.98; -0.08%

Nasdaq: 5,829.99; +11.04; +0.21%

Now, here's a look at today's most important market events and stocks, plus a preview of Monday's economic calendar.

DJIA Today: Dow Slides as GOP Lacks Votes to Repeal Obamacare

The markets are not so much concerned about the healthcare law's passage as they are about the impact on President Trump's other policy goals moving forward. The healthcare battle could be a precursor to what may come regarding Trump's other goals of corporate tax reform, income tax reform, deregulation, and a $1 trillion infrastructure package.

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Surprisingly, it wasn't the Democrats who appear to have done in the replacement bill. Instead, the bulk of opposition came from within the Republican camp and from outside influencers like the Koch Brothers.

Trump's Treasury Secretary Steven Mnuchin tried to calm the markets' anxiety by saying that the administration will try to still get tax reform done by August. The CBOE Volatility Index (VIX) - widely considered the markets' fear gauge - jumped more than 3% today.

Oil prices pushed higher Friday despite rising concerns about an increase in U.S. production. Rising domestic inventories had pushed crude to roughly four-month lows in previous sessions. Some optimism arose on word that Saudi Arabia had cut exports to the United States. That news was offset by word that the number of U.S. rigs in operation increased for the 10th consecutive week.

Top Story This Week: Top Marijuana Stocks to Watch This Week

According to Baker Hughes Inc. (NYSE: BHI), the number of rigs in operation increased last week by 21 to reach 652. That is a much higher figure than the 372 in operation at this time in 2016.

The WTI crude oil price today and Brent crude oil price climbed 0.7%.

But the other big story today is the approval of the Keystone XL pipeline.

This morning, the Trump administration issued a permit that will allow for the construction of the pipeline almost a decade after it was introduced. The announcement came on the same day that North Dakota reported a pipeline spill was three times larger than previously estimated.

Shares of TransCanada Corp. (NYSE: TRP) - the owner and operator of the Keystone pipeline - rallied as much as 7% but fell in the afternoon after it emerged that other obstacles still face the project. Here's more on the announcement and the other stocks driving today's news.

Stock Market News and Top Stocks to Watch Today: March 24, 2017

  • In activist news, shares of SeaWorld Entertainment Inc. (NYSE: SEAS) rallied more than 5% on news that a Chinese industrial investment firm has purchased a 21% stake in the entertainment company. Blackstone Group (NYSE: BX) sold the stake to Chinese investors at a stunning 33% premium, driving other shares much higher.
  • Retail stocks were again under pressure. Shares of Macy's Inc. (NYSE: M) hit a 52-week low Friday after the firm received a brutal assessment by Citigroup Inc. (NYSE: C). The investment bank dropped its rating from a "Buy" to "Neutral" as the firm continues to struggle. Money Morning readers have been well aware that shares of Macy's and Sears Holding Corp. (Nasdaq: SHLD) have been on a decline for more than a decade as e-commerce crushes the firms' profitability.
  • Shares of Twitter Inc. (NYSE: TWTR) added more than 1% on news that the company is exploring a paid-premium model in order to boost revenue. The company has struggled to bolster user growth in recent quarters.

Monday's U.S. Economic Calendar (all times EDT)

  • Dallas Fed Manufacturing Survey at 10:30 a.m.
  • Four-Week Bill Announcement at 11 a.m.
  • Three-Month Bill Auction at 11:30 a.m.
  • Six-Month Bill Auction at 11:30 a.m.
  • Two-Year Note Auction at 1 p.m.
  • Chicago Federal Reserve Bank Chair Charles Evans Speaks at 1:15 p.m.
  • Dallas Federal Reserve Bank President Dennis Kaplan Speaks 6:30 p.m.

Up Next: The Best Stocks to Buy (and When to Sell) for Mega-Profits in 2017

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Fri, 24 Mar 2017 20:39:51 +0000 https://moneymorning.com/videos/dow-jones-news-today-markets-still-sluggish-after-congress-fails-to-take-obamacare-repeal-vote Dow Jones News: Markets Fall as March FOMC Meeting Starts https://moneymorning.com/2017/03/14/dow-jones-news-markets-fall-as-march-fomc-meeting-starts/ Dow Jones news
In Dow Jones news today, the Dow slid again as investors prepare for another interest rate hike from the U.S. Federal Reserve.

Winter weather also played a role in pulling down transportation stocks as blizzard conditions on the East Coast stifle economic activity.

Let's look at the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:

Dow Jones: 20,837.37; -44.11; -0.21%

S&P 500: 2,365.45; -8.02; -0.34%

Nasdaq: 5,856.82; -18.97; -0.32%

Now, here's a look at today's most important market events and stocks, plus a preview of Wednesday's economic calendar.

DJIA Today: Dow Drops as Oil Slumps and Rate Hike Expectations Increase

The Dow fell 44 points as the markets prepare for tomorrow's announcement by the Federal Reserve on whether the central bank will raise interest rates in March.

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The expectation is that the U.S. Federal Reserve will raise interest rates tomorrow afternoon at the conclusion of the meeting. The Fed's plans on monetary policy have some investors asking a very perilous question: "Will the stock market crash after the FOMC meeting?" We break down the ramifications of another interest rate hike this week and if it could cause the next stock market crash. Here's what you need to know.

Airline stocks were under pressure - including United Continental Holdings Inc. (NYSE: UAL) and American Airlines Group Inc. (Nasdaq: AAL) - due to paralyzing winter weather on the East Coast. Thousands of flights have been delayed due to blizzard conditions.

Crude oil prices were slumping for the seventh consecutive session after OPEC released a bearish report on the near-term future for oil. OPEC reported an uptick in global inventory levels. The news coincides with a report this afternoon from the American Petroleum Institute. Analysts are expecting another build in crude inventories in the United States.

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The WTI crude oil price today fell 1.1%, while Brent crude dipped 0.4%.

Shares of Exxon Mobil Corp. (NYSE: XOM) fell more than 0.5% after the New York attorney general accused the company of withholding documents related to the impact of fossil fuels on climate change from the public and its investors. Shares of Chevron Corp. (NYSE: CVX) fell more than 1%.

But the big story was Snap Inc. (NYSE: SNAP).

The parent company of Snapchat was reeling Tuesday after eMarketer announced that it expects the company's ad revenue to come in well short of previous expectations. Shares fell more than 3%.

Stock Market News and Top Stocks to Watch Today: March 14, 2017

  • Shares of Valeant Pharmaceuticals International Inc. (NYSE: VRX) fell more than 12% after activist hedge fund manager Bill Ackman took a $3 billion loss and unloaded his stake. It has been an absolutely brutal stretch for the hedge fund manager, who once compared the debt-ridden giant to Berkshire Hathaway Inc. (NYSE: BRK.A). Ackman's original stake of $3.2 billion was worth just $221 million when he decided to sell.
  • Executives at United Parcel Service Inc. (NYSE: UPS) received huge compensation packages last year, even though company fell well short of Wall Street performance expectations. This includes big misses on revenue growth and total shareholder returns. Money Morning looks deeper into the disconnect between executive pay and company performance. Check it out, right here.
  • Markets are still in a frenzy over Mobileye NV (NYSE: MBLY). On Monday, shares of the semiconductor giant surged more than 28% on news that it sold itself to Intel Corp. (NYSE: INTC). The deal is worth roughly $15.3 billion and will give Intel a massive leg up in the emerging field of driverless technology.
  • Look for additional earnings reports this afternoon from the Rubicon Project Inc. (Nasdaq: RUBI), Celldex Therapeutics Inc. (Nasdaq: CLDX), and Fogo de Chao Inc. (Nasdaq: FOGO).

Wednesday's U.S. Economic Calendar (all times EDT)

  • MBA Mortgage Applications at 7 a.m.
  • Consumer Price Index at 8:30 a.m.
  • Retail Sales at 8:30 a.m.
  • Empire State Manufacturing Survey at 8:30 a.m.
  • Business Inventories at 10 a.m.
  • Housing Market Index at 10 a.m.
  • EIA Petroleum Status Report at 10:30 a.m.
  • FOMC Meeting Announcement at 2 p.m.
  • FOMC Forecasts at 2 p.m.
  • Fed Chair Press Conference at 2:30 p.m.
  • Treasury International Capital at 4 p.m.

Top Story: Why 2017 Is the Year for Investing in Renewables

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About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Tue, 14 Mar 2017 20:39:23 +0000 https://moneymorning.com/2017/03/14/dow-jones-news-markets-fall-as-march-fomc-meeting-starts/ POLL: Should the Federal Reserve Raise Interest Rates This Month? https://moneymorning.com/2017/03/08/poll-should-the-federal-reserve-raise-interest-rates-this-month/ Just a few weeks ago, on Feb. 14, U.S. Federal Reserve fund futures were only assigning a 13% chance of a March interest rate increase, reported MorningStar.com.

But that probability has since done an about-face.

Fed funds futures are currently pricing in a 95% probability of a rate hike this month, even if this Friday's payrolls report comes in a bit softer than expected.

This market expectation shift follows hawkish rhetoric from Fed honchos -- including from Chair Janet Yellen herself.

"[A March rate hike] would likely be appropriate," Yellen said, according to The Washington Post on March 3. She then noted that job growth of around 180,000 per month is "notably above the level estimated to be consistent with the longer-run trend in labor force growth -- between 75,000 and 125,000 per month."

Is the timing truly right, though?

Scroll down past the image and tell us whether you think the Federal Reserve should raise interest rates in March... 

Federal Reserve

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.

Disclaimer: © 2020 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.]]> Wed, 08 Mar 2017 14:56:50 +0000 https://moneymorning.com/2017/03/08/poll-should-the-federal-reserve-raise-interest-rates-this-month/