Archive for March, 2020

WARNING: Earnings Reports Are Not Going to Reflect the Virus’s Full Impact

0 | By Shah Gilani

Last week, the Securities and Exchange Committee (SEC) announced an order providing “public companies a 45-day extension to file certain disclosure reports that would otherwise have been due between March 1 and July 1, 2020.”

To be clear, that means earnings reports covering the first quarter, which ends today, may not have to be filed on time, and material impacts of the coronavirus hitting companies throughout the second quarter, which ends June 30, 2020, don’t have to be disclosed in a timely fashion.

Given COVID-19’s impact on company workers, including executives, managers and accountants, in-house and external auditors, granting an extension on filing certain disclosure reports looks considerate, but in reality, it’s a recipe for disaster.

Now’s not the time to delay earnings reports or material disclosures

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JPMorgan Says We’ve Seen the Lows – This Is Why They Could Be Wrong

1 | By Shah Gilani

Last week’s Capital Wave Forecast called for “dire” market conditions, with a proviso. I said things could be “worse than that if we don’t see immediate relief, from all quarters where it must come from.”

Monday proved to be dire, at least for most of the day. Across the board, benchmarks made new intraday lows, and, in closing, posted new 52-week lows for the Dow, S&P 500, and Nasdaq Composite.

But benchmarks closed off their intraday lows, a relief, considering Monday could have been a blowout.

Then, after the close Monday, everything changed.

The Market Looks Past 3.28 Million Newly Unemployed and Soars: Is That Crazy?

0 | By Shah Gilani

Initial jobless claims for the week ending March 21, 2020, was a record 3.28 million.

That’s 11.6 times more than the week before when 281,000 claims were filed, and 4.72 times the previous record of 695,000 Americans who were seeking benefits way back in the week ending October 2, 1982.

But that didn’t stop the Dow Jones Industrials Average from soaring 1,083.79 points, or 5.05%, to 22,552.17.

Is that crazy?

NO…and yes. Here’s why.

Which Stocks to Sell, Which “Value” Stocks to Buy, When the Market Could Rebound…and More

4 | By Wall Street Insights and Indictments Staff

Today’s rally might be hopeful, but Shah isn’t quite buying it. That’s why he decided to jump on a video call to address some of the biggest questions riddling headlines today: which stocks to sell, how to evaluate a “value” stock (with two he’s looking at himself), when the market could rebound, and which questions you need to ask your financial advisor right now.

Just click here to watch

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If We Don’t See Immediate Relief, This Week Could Be Worse Than Last – But There Is a Silver Lining

0 | By Shah Gilani

The market forecast for this week is the same as last week, “dire,” in fact, it’s probably worse than that if we don’t see immediate relief from all quarters where it must come from.

Regrettably, with the U.S. economy shutting down, none of this should be unexpected.

There are obvious and fundamental reasons we’re staring into a dark place; we’re facing an existential threat to mankind and the direct knock-on effect of that on markets.

That’s what COVID-10 hath wrought.

Demand Destruction Across the U.S. and Global Economies Portends Recession…Or Worse

2 | By Shah Gilani

Anyone who doesn’t believe “demand destruction,” resulting from the impact of the novel coronavirus across U.S. and world economies, isn’t going to result in a global recession, just doesn’t know the facts.

By way of just one example, China, the first country hit and hit hard by COVID-19, which originated in Wuhan, Hubei province, announced its February manufacturing PMI (purchasing managers index) dropped to 35.7 from January’s 50 level.

50 is the index’s dividing line, above which implies expansion and below 50 spells contraction.

That drop is both a record drop in a month and a record low for China.

Worse, China’s non-manufacturing PMI (think services) fell from 54.1 in January to 28.9 in February.

At the height of the 2008-09 financial crisis, China’s manufacturing PMI only fell to 38.7. Its non-manufacturing PMI never even broke 50.

With 11 million people locked down in Wuhan and at least 46 million people across China quarantined, of course demand declined, so did production.

Now, all of Italy’s locked-down.

And President Donald Trump declared a state of emergency in the U.S.

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The Real Reason the Fed Cut Rates Again (And Why It’s NOT the Time to Start Buying)

3 | By Shah Gilani

The Forecast for this week is “dire.”

Investors have been sold a bill of goods by most analysts and the media, and worse, by their brokers and financial advisors.

The Capital Wave Forecast’s been warning subscribers that “this time is different,” and rallies, especially big jumps like we saw on Friday, are nothing but “dead cat bounces.”

It’s not just bad, it’s worse than people realize.

The Federal Reserve’s Bazooka Can’t Save the Market or the Economy

2 | By Shah Gilani

If you think the Fed’s going to fire hundreds of billions or trillions of dollars of “stimulus” rounds at the coronavirus crisis and pierce the virus’s grip on mankind, on the market, and on the economy, you’re wrong.

This is an existential threat to humans, markets, and economies, which the Fed’s ammo can’t kill, but sure can make it worse.

Here’s what the Fed’s doing, what it’s going to do, why it won’t work, how you’ll know it’s not working, and how they’re going to make everything worse

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Don’t Trust the Stock Market’s “Head Fake” Rallies

2 | By Shah Gilani

“It’s all good until it isn’t” is one of my favorite sayings, which happens to be exactly what happened with the bull market’s last run-up to all-time highs on February 12, 2020.

The hot-mess rally, after news about the spread of novel coronavirus in Wuhan, China, knocked global and U.S. markets down from mid-January, looked good. It looked like virus fears were overblown when China said the rate of infection was slowing. Stocks got right back on the bull and rode it.

It was all good.

Until it wasn’t. The virus was actually spreading across China and the globe. When markets realized they’d been duped by fake news out of China, the selling began.

Now, we’re facing the opposite of “It’s all good.” Now, “It’s all bad until it isn’t.”

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