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market pullback

Article Index

If This Is a Stock Market Correction, "Bring It On"

By , Associate Editor, Money Morning • @DavidGZeiler -

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After last week's gyrations, the Standard and Poor's 500 Index is down 5.5% from its September highs - more than halfway to a stock market correction of about 10%.

But Money Morning Chief Investment Strategist Keith Fitz-Gerald -- a seasoned market analyst with 33 years of experience - refuses to go along with the gloom-and-doom crowd that's now predicting a stock market crash of 20% to 30%.

In fact, not even a 10% stock market correction bothers him.

To find out why Fitz-Gerald would relish a stock market correction, watch this video.

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Stock Market Crash 2014: George Soros Tips His Hand

By , Associate Editor, Money Morning • @DavidGZeiler -

stock market crash

Hedge fund filings for the second quarter show a spike in defensive positions, which many have interpreted as a sign that professional investors like George Soros are preparing for a stock market crash.

And yet these hedge fund managers don't seem to be bailing on stocks altogether. Some even increased their long positions.

But if you dig a little deeper it becomes clear exactly what Soros and his fellow hedge fund managers are up to - and it makes perfect sense.

Here's why you should follow their lead on this...

This New Fiscal Cliff Report Issues $200 Billion Warning

By , Contributing Writer, Money Morning -

A fresh fiscal cliff report from the White House today (Monday) has predicted that falling off the cliff will deliver a damaging blow to U.S. consumer spending.

The report from the White House's National Economic Council and Council of Economic Advisers cautioned that consumers will rein in spending next year to the tune of some $200 billion should Congress let taxes increase for middle class American families come 2013.

"American consumers are the bedrock of our economy, driving more than two-thirds of the overall rise in real GDP over 13 consecutive quarters of economic recovery since the middle of 2009. And as we approach the holiday season, which accounts for close to one-fifth of industry sales, retailers can't afford the threat of tax increases on middle-class families," the report stressed.

The report is the latest ammo that U.S. President Barack Obama is using to sway lawmakers to go along with his plan to extend tax cuts for American families making less than $250,000 a year, while raising tax rates on the wealthiest 1%, which Republicans vehemently oppose.

"The president has called on Congress to act now on extending income tax cuts for 98% of American families and not hold the middle-class and our economy hostage over a disagreement on tax cuts for households over $250,000 per year. The Senate has passed this bill and the president is ready to sign it," the report read.

With the Dec. 31 fiscal cliff deadline quickly approaching, Democrats and Republicans continue to butt heads over tax issues, as well as government spending and entitlement expenditures. If the two sides don't come to some kind of deal and we fall over the fiscal cliff, a 2013 recession is likely.

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How to Prepare for a Stock Market Pullback

By , Money Morning -

After getting slammed by a sharp post-election stock market pullback, many investors are trying to figure out if this is the beginning of a market crash or simply a needed correction.

Either way, legendary investors, hedge fund managers, and some of the largest investment firms are calling for a decline through the end of the year and possibly into 2013, depending on the resolution of the fiscal cliff.

On Monday, Goldman Sachs Group Inc. (NYSE: GS) Chief U.S. Strategist David Kostin restated his 1,250 year-end target for the Standard & Poor's 500, which is roughly 10% below yesterday's close.

"Uncertainty swirling around the 'fiscal cliff' that must be resolved by year-end, the pending jump in capital gains taxes at the start of 2013, and the debt ceiling that will be reached in late February represent clear and present downside risks to the market in the near-term," Kostin wrote to clients, effectively summarizing the bears' case for a continuation of the recent downturn.

Besides Goldman, Marc Faber has predicted a 20% market plunge will occur during President Barack Obama's second term. Peter Schiff recently called QE3,"Operation Screw" because "everybody's pretty much screwed if they own dollars," and even technical indicators are hinting at an upcoming slide.

This doesn't mean panic or run - in fact, those are the worst things you could do. Instead, follow these steps to prepare for a stock market pullback.



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