Articles About Trading & Investing

Capital Wave Forecast: Markets Hooked on Steroids

0 | By Shah Gilani

Summer’s here and “the livin’ is easy.”

That’s because the ice cream man’s promising to spoon-feed steroids to every man and market, whether they need pumping up or not.

So, go ahead and get back into the market, get all in, why not, because it’s all good until it isn’t.

It doesn’t matter that the Federal Reserve’s gone crazy, in the face of a strong economy, promising to “act as appropriate” and cut rates if pushed by the President, as well as appeasing presumably scared investors running to flight to quality trades that took the 10-Year Treasury yield below 2% last week.

What matters is catching the next leg up in the bull market, the one for stocks as well as bonds.

Because it’s all good until it isn’t

Catch the Capital Wave Triggering Massive Bond and Stock Rallies

1 | By Shah Gilani

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 towards 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

Why the Fed’s Forecast Has Everyone in “Fight-or-Flight” Mode

0 | By Wall Street Insights and Indictments Staff

The Fed’s decision on rate cuts today determines everything for the markets going forward. No matter how many rate cuts the media could possibly predict, Shah isn’t so convinced the Fed will fall for it. What he sees is a much more pressing forward guidance from the Fed that investors need to watch out for. And in response, markets are moving and bustling, so Shah has his eyes on the three sectors taking over all the talk… Click here to watch. Click here to watch.

How the Fed’s “Market Rescue” Gets More Dangerous for You the Longer the Trade War Lasts

0 | By Shah Gilani

The Federal Reserve’s already proven it’s more interested in equity markets than the economy.

Under the guise of the economy potentially going to suffer from a protracted trade war with China, the Fed’s James Bullard, president of the Federal Reserve Bank of St. Louis announced rate cuts were in order, and Fed Chairman Jerome Powell said on June 4, 2019, the central bank would act “as appropriate” to risks posed by a trade war with China.

Those bullish comments reversed the market’s May slide and gave investors hope that they’d see a rate cut.

Today starts the two-day long Federal Open Market Committee meeting, and investors, especially in the bond market, but increasingly in the stock market, expect at least some dovish “forward guidance” from the meeting, if not direct talk of a shift from expectations of no action to a potential cut in the future.

But the Fed can’t rescue markets if the trade war turns into a battle royale.

And markets don’t see that.

Here’s what the Fed’s doing and why it won’t be enough if the U.S. and China “go nuclear” on trade.

Beware the Latest Rally

0 | By Shah Gilani

What a move markets made this week! After looking like they were rolling over (again), breaking below 25,000 on the Dow Jones Industrial Average, stocks rallied as if someone lit a fire under them.

Of course, that someone was the Federal Reserve.

But we’re not out of the woods, not by a longshot.

In fact, this rally just might be a “dead cat bounce” – a Wall Street saying that means a temporary recovery from a prolonged decline, based on the idea that even a dead cat will bounce if it falls far and fast enough.

So, this is your warning: beware the latest rally.

Here’s what’s really going on

We’re Not Out of the Woods Yet – Watch Out

0 | By Wall Street Insights and Indictments Staff

We’ve seen many a positive headline on trade and positive development at the Federal Reserve, but does that merit the rebound we’re seeing? Perhaps, but we’re not out of the woods yet. This morning on Varney & Co., host Stuart Varney and Shah Gilani discuss Shah’s bet that we’d seen a 10% decrease if a trade deal wasn’t finalized. Shah goes on to say that although we haven’t hit 10% yet, the market could continue back down if the China trade talks remain at a stalemate… Click here to watch.

Forget Free College: This Makes More Sense

2 | By Shah Gilani

Student loan debt is a monster problem.

But it doesn’t have to be, and it shouldn’t be.

There are three primary reasons we’re in this mess in the first place:

  1. Higher education is too expensive, which is the fault of greedy schools.
  2. The government shouldn’t be financing or guaranteeing student loan debt, because it’s easy access to loan money that drives up costs.
  3. The ability to pay back loans isn’t 100% income-based, but it must be.

Here’s a simple solution that fixes the systemic issues with higher education financing

Free College Comes with a High Cost

0 | By Shah Gilani

There’s even worse news just out about student loan debt: The Federal Reserve now says total student loan debt outstanding is $1.57 trillion, not $1.53 trillion. (Click here to read the first part of this three-part series.)

That’s a 27% jump since 2014.

New data reveals that 69% of the class of 2018 took out student loans.

The graduating class of 2018 has an average education debt pile of $29,800. That doesn’t include 14% of the class of 2018’s parents borrowing an average of $35,600 in federal PLUS loans.

What’s wrong with the forever higher cost of higher education is that there’s more loan money available than ever.

Some presidential-hopeful politicians think the answer is to do away with government loan money and just make higher education free.

And, some would-be presidential candidates think outstanding loans should be forgiven too.

Here’s what’s really driving higher education costs higher, what some politicians want to do, and what’s wrong with both the current system and making higher education free

Student Loan Debt: The Truth is Stranger than Fiction

7 | By Shah Gilani

Saying the cold, hard facts on student loan debt are frightening is like calling the Grand Canyon a ditch.

There’s so much on student loan debt that this is going to be a three-part series.

In this series, I’m going to tell you which facts are real and why some so-called facts are absolute lies. I’ll also dissect some presidential hopeful’s plans for free education – and why that will never happen.

I’m going to tell you what the real problem with student loans is, why no one wants to hear the truth, and what to do to fix the massive problem the country’s really facing.

But first, today, I’m going to break down the facts about student loans, and the numbers might be shocking.

So, be prepared

China’s Next Shot Across America’s Bow – and How to Play It

0 | By Shah Gilani

On Tuesday, I wrote about the trade tiff between the U.S. and China turning into a trade war and how investors don’t see that the “war” isn’t just about trade. (Read Tuesday’s issue here.)

It’s about geopolitics and a tug-of-war between the world’s great economic and military superpowers.

On Wednesday, on Fox Business News’s Varney & Company show, I said, “This is not just a trade war battle, this is a geopolitical battle of two superpowers and it’s a lot deeper than just trade.”

Today, I’m going to tell you about one missile being readied by the Chinese, what will happen if it’s fired, and how you can play for some juicy profits with a targeted ETF