SPY

S&P 500 SPDR

The Fed

These Numbers Could Push the Fed to Do Something Stupid

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The Daily Treasury Statement data for the end of August showed some improvement in total tax collections, including a slight uptick in withholding taxes and an even bigger increase in excise taxes.

The numbers suggest that an early summer slowdown has ended. After the expected downward revisions in June and July jobs data, the August uptick in jobs was not a fluke. And the excise tax data suggests strong retail sales.

So, not an altogether bad summer – if you happen to be a politician or government taxman. But what about for investors?

Well surprise, surprise, surprise! Good news is bad news, which is what we've been talking about here all along.

Good economic news, as presaged by the uptick in tax receipts, will encourage the Fed to keep tightening.

And tighten it shall, in two ways: Most importantly (and most destructively), it will drain more money from the banking system. Secondarily, it will continue to rubber-stamp tightening money markets by raising the federal-funds rate.

And that, as I have been shaking my fist at the sky about for months, is really bearish.

The stuff has not hit the fan yet, but it is coming...

Washington

How to Cash In on the Transatlantic "Split" That's Got Nothing to Do with Trump's Tweets

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Of course, last week, on June 6, the West marked the 74th anniversary of the allied "D-Day" landings in Normandy, France.

This anniversary, though, was capped off by a G7 summit in Charlevoix, Canada.

Right now, relations – at least, on the surface – between the modern Western allies are mighty frosty, dominated by Twitter and press conference feuds between Canadian Prime Minister Justin Trudeau, French President Emmanuel Macron, and U.S. President Donald Trump, largely over the subject of the multilateral trade war breaking out over protectionist tariffs. Of course, they've largely kept quiet on social media, but it's no secret British Prime Minister Theresa May and German Chancellor Angela Merkel aren't thrilled with Trump's positions, either.

I'm hard-pressed to recall any recent G7 (maybe call this "G6+1") meeting as tense as this one, though a few probably come close.

On the other hand, dispassionate observation and analysis of market action tell us that all this hostility and discord has been baked into prices – discounted.

But our Capital Wave Strategist, Shah Gilani, is watching a "split" of sorts beginning to open up between the United States and the European Union – one that's got nothing to do with politics or soundbites and everything to do with… growth.

I caught up with him to get filled in on the details, but he did me one better…

He told me how to play this emerging situation that's coming and going - there are going to be some pretty big swings...

Trading Strategies

For the Bulls, the Market's "Just Right" This Week and Beyond

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Forget about being too hot or too cold, we've got a serious "Goldilocks" market going right now.

Sure, it would be easy to say that the February jobs number from the U.S. Labor Department is arguing that the economy is too hot and all too tempting for the U.S. Federal Reserve to turn off the heat with interest rate hikes. After all, 313,000 new jobs estimated by the survey is a monster number.

And that number gets even better – the trailing two-month revision for January and December boosted the job count by 54,000.

And then there's the unemployment rate calculation that has the U.S. unemployment rate at 4.1% – a 17-year low.

Considering all of this, the bearish argument would say something like, "Well, the economy is way, way too hot, and that's really bad news; it's going to end poorly for the markets."

But let's let those bears stay in hibernation.

Because as we dig further into these the numbers, we find that there's lots to like...

ETFs

Here's How Wall Street's Selling Everyone Tickets on the Hindenburg

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Everybody loves exchange-traded funds (ETFs) these days.

There are a mind-boggling 2,000 ETFs, give or take, in the United States today. Roughly 70% of those are equity funds.

The three largest equity ETFs, packed with around 25% of all equity ETF assets, are S&P 500 index funds, like the SPDR S&P 500 ETF Trust.

Now, it's true that indexing gets most of the investment love at the moment, but there's a really brisk business in so-called "motif" or "thematic" passive strategies.

These let investors tap into just about any sector or idea that strikes their fancy.

Of course, you can passively invest in exciting sectors like robotics, defense cybersecurity, or biotechnology, but you can also buy ETFs that invest in faith-based or special-value principles, like veganism (I'm serious) and animal welfare, or social justice.

Essentially, here in the weird year 2018, if an investor can fathom it, there is an ETF that can be created to allow for one-click investing in the idea.

But ultimately, most of the money is flowing into the large-cap indexes.

After all, indexing is the new pet rock/Rubik's Cube/Beanie Baby, and, as such, is the answer to all our investing prayers.

Wall Street is embracing the idea that the unmanaged indexes will usually outperform the highly paid active managers.

Faced with the prospect of collecting low fees, or worse, no fees, even the old-school brokerage and investment management firms are pushing the idea of low-cost index funds to their clients.

It is the ultimate solution (to a problem nobody really has). Like party drugs, nobody can get enough of these things.

Well, when (not if) the market turns and the sun comes up on the carnage, it's going to be much worse than anyone ever realized...

Options

Here’s My Favorite Holiday Play on the S&P 500 Right Now

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Every year, around this time, I get hundreds of e-mails from friends, former students, and subscribers wishing me season's greetings… and nervously asking me about the market action between now and the end of the year!

I get that they're worried.

Believe it or not, the Wall Street crowd likes to take time off, too, and that means important trading volume and liquidity can both dry up faster than a turkey left in the oven too long.

So let me show you what's going to happen over the next few days and weeks – the best time to get into your trades, the absolute, drop-dead last day to exit those trades for maximum profit, and – to put some extra holiday-season cash in your pockets – a couple of easy, low-risk plays on the market (and a few select stocks) tailor-made for this special time of year.

Let's get to it! Watch my video...

Market Crash

Are You Prepared for the Next Recession? 3 Strategies for Protecting Your Wealth

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The next recession could devastate the stock market, wiping out trillions in everyday Americans' retirement and investment funds.

With potential losses as high as 86% over the last seven recessions, investors and retirees need to have a plan in place in case the worst happens.

We'll show you three defensive strategies for safeguarding your assets during a recession, plus one way to profit if stocks fall...