Articles About Wall Street

This Is Your Warning for the “Profit-Taking” That Could Happen in Seven Days

0 | By Shah Gilani

Everybody loves Apple Inc. (AAPL).

Actually, everybody loves everything Apple: the iPhones, Macbooks, iPads, Apple AirPods, the Apple Watches, the whole Apple ecosystem, and especially Apple stock.

Even if you don’t think you own it, you own it if you own any mutual fund(s) or popular index-tracking ETF(s). Apple’s in most of them.

In fact, Apple is so widely held it’s frightening.

Here’s how big an influence Apple stock is on the stock market – the S&P 500, the Dow Jones Industrials Average, the Nasdaq Composite – and what’s frightening about where else Apple resides.

The Stock Market Has the Fed to Thank for its Latest Melt Up

1 | By Shah Gilani

Ongoing trouble in the repo market, where banks, big hedge funds and others borrow from each other, has forced the Federal Reserve to inject $400 billion into the fed funds market over the past four weeks.

That’s what’s fueling the stock market’s melt up.

Here’s how the problem in the fed funds market is driving stocks higher, why the Fed’s going to have to do even more, and what it means for future market moves.

The fed funds lending market is where borrowers use repurchase agreements, or repos, to borrow overnight or for terms of a few days to a few weeks. It has been in existential crisis mode for weeks now.

The bottom-line there is that big banks who usually lend their excess reserves in the fed funds market, to pick up interest overnight or on term loans, have been keeping more of their excess reserves parked at regional Federal Reserve banks. They’ve been doing this to collect IOER (risk-free “interest on excess reserves,” which the Fed’s been paying banks since the start of the financial crisis). Either that or they’ve been using their excess reserves to buy longer term Treasury bonds to earn more interest and speculate on interest rates falling.

That means there’s not enough money in the system to facilitate normal lending. As a result, the interest that borrowers must pay on repos has, at times, skyrocketed. And worse, sometimes the well’s dry.

To calm markets, provide necessary liquidity and not implode the financial system, the Federal Reserve’s been pumping money into the fed funds market like mad

Capital Wave Forecast: Global Debt Is Going to Crash Equity Markets: Just Not Today

0 | By Shah Gilani

Investors keep staying on the sidelines due to one very popular or rather unpopular narrative: the global debt bomb exploding.

For years now, fearmongering headlines on the subject continue to stoke investor anxiety.

When debt levels skyrocketed in 2019, so did headlines like, “Titanic iceberg of world debt could sink a slowing global economy”.

As the last decade of the 2010s wound down, year-end predictions and warnings multiplied with December 2019 registering several doom and gloom debt bomb headlines.

On December 1, 2019, Bloomberg postulated, “The Way Out for a World Economy Hooked on Debt? More Debt.”

A day later, the South China Morning Post warned, “Huge public, corporate and household debt looks like the ‘new normal’ for the global economy – until the next crisis.”

On December 20, 2019, ABC News’ top story was, “The World Bank warns a ‘wave of debt’ could swamp global economy.”

“Buckle up for turbulence: why a global debt crisis looks very hard to avoid” as The Conversation, an academic website, pronounced.

And in Britain, The Guardian on January 4, 2020, fretted, “Debt will kill the global economy. But it seems no one cares.”

The fuse has been lit on the global debt bomb. Here’s how bad it is, how it’s effecting stock markets, and what you should do with your money

Why You Should Understand the Market’s Upward Momentum and What’s Going to Stop It

1 | By Shah Gilani

The most powerful stock market moving engine, whether going forward or in reverse, is momentum.

And while there are lots of drivers of momentum, sometimes momentum itself is the primary driver.

Throughout 2019 the markets had their blips, but overall you can look back and clearly see that the momentum was mostly up.

Starting 2020 off strong, we’ve already hit new all-time record high markets, but you should be asking yourself what is happening now that’s keeping last year’s trend going.

Here’s where the record-breaking market’s momentum is coming from and what’s going to stop it

Start the New Year Reading Why an America Divided Should Matter to You

0 | By Shah Gilani

The single best book I’ve ever read about American history, the real history of the founding of the country, how the thirteen states were different and came together, what the Declaration of Independence meant to the diverse colonies, how the Revolutionary War shaped the country then and in the future, and what it took, how many miracles had to happen, for the new country to survive and thrive, are all revealed, in exquisite detail in Ron Chernow’s Alexander Hamilton.

Understanding where the country is today, why we’re divided as a nation, who’s dividing us and why are explained through the prism of America’s founding in Chernow’s masterpiece

Take Last Decade’s Milestones as a Warning for the Dangers Ahead

0 | By Shah Gilani

Philosopher George Santayana said, “Those who can’t remember the past are condemned to repeat it.”

That’s maybe truer now as we enter a new decade and look back at the decade we’re leaving.

From 2010 through 2019, something monumental happened every year, even sometimes some things, that rocked financial worlds and are harbingers of what we’ll see this decade.

Here are the big financial events of each year, why they’re significant, and what they might portend…

Capital Wave Forecast: The Fake Manufacturing Recession Narrative Is Scaring Investors: Don’t Buy into It

0 | By Shah Gilani

If you think the current “manufacturing recession” in the United States is going to sink the economy and the stock market, you’re not alone.

That’s exactly what some major media outlets are trying to plant in your head right now.

Consumers and investors are being inundated with bad news about manufacturing… and a lot of them are scared.

A New York Times headline from this summer 2019 pushed the idea that a manufacturing recession will infect the economy by saying, “U.S. manufacturing slowed in August in latest sign of economic weakness.”

The Los Angeles Times got on-board shortly after in October announcing, “Manufacturing is now officially in recession, despite Trump’s vow to boost economy.”

CBS upped the fearmongering stating the manufacturing recession as a fact and making it sound viral saying, “U.S. manufacturing is in a recession. What does that mean for the rest of the country?”

Back in July PolitiFact quoted a candidate for president as an expert with the statement, “Elizabeth Warren says manufacturing is in recession…”

Then in October CNN, the media source of all Breaking News, trumpeted, “US Manufacturing Looks Weak. That’s a Problem.”

Even Bloomberg Business got on the naysaying train in October suggesting, “Manufacturing in Recession Might Spread to U.S. Economy.”

And MSN, the blatant basher of good news, claimed, “US manufacturing in ‘technical recession’.”

The problem is that it’s all fake news…

Capital Wave Forecast: Even If the Fed’s Been Duped Doesn’t Mean Stocks Will Crash Just Yet

1 | By Shah Gilani

Rumors of the Federal Reserve’s demise – in part because it was “duped” by the biggest bank in the U.S. – have been greatly exaggerated, though headlines would have us believe otherwise.

MarketWatch titled its piece back in April, “The Federal Reserve Has Lost Control of the Financial Markets.”

The Wall Street Journal asked in June, “Has the Fed Lost Its Mojo?”

Also, in June, the Mises Institute declared, “The Fed Has Lost Control.”

A few months later in September CNBC reported, “Fed loses control of its own interest rate as it cuts rates – ‘This just doesn’t look good’.”

Not only has there been no let up, fearmongering headlines are being ratcheted up.

The New York Times declared, “Fed Jumps into Market to Push Down Rates, a First Since the Financial Crisis.”

In mid-November Politico warned, “Fed’s push into funding market stirs fear of widening role.”

And a few days ago, on December 18th, The Economist, with a graphic of a fire extinguisher in the shape of a dollar sign poised over rising flames cautioned, “Despite the Fed’s efforts, the repo market risks more turbulence.”

It’s a frightening fact that repos (repurchase agreements), short-term borrowing facilities traded in the fed funds market, where banks and other systemically important financial players borrow from each other, blew up in September, right under the Fed’s none.

It’s even more frightening that the “turn” of the year is expected to put exponentially more pressure on repo rates than what the fed funds market saw in September and spiking rates could force banks, hedge funds, institutions, traders, active and passive investors to sell and have to continue selling as margin calls force asset prices lower and lower.

Once again it looks like we’re looking over the edge of an abyss at potentially huge market loses.

But the truth is The Fed hasn’t lost anything. At least not yet.

Maybe the Fed was duped by the biggest bank in the United States into restarting quantitative easing (QE). Or maybe it saw what was happening and let it happen to scare the hell out of banks and overleveraged hedge funds. No-one knows the truth there and the Fed’s never going to tell.

But, the “Fed’s lost control” narrative is fake news.

Sure, one hand came off the tiller, but they still have control of the ship. At least for now.

What’s really going on will only sharpen the horns of what investors (wrongly) believe is a long-in-the-tooth bull market

Capital Wave Forecast: The Fake Recession and Why It’s Not Too Late to Make a Killing in This Bull Market

2 | By Shah Gilani

There’s a recession coming, that’s a given. But it’s not here. In fact, there’s not one in sight, even on the horizon.

But that’s not what you’re hearing from an overwhelming number of mainstream media and financial news outlets.

According to them, the next great recession is bubbling up and about to spill out of the containment towers built up around it.

Investors not participating in the roaring bull market are being cautioned that it’s too late.

Even worse, investors sitting on spectacular gains amassed over the almost 11-year bull market are being targeted with sell recommendations.

Purveyors of the recession narrative want investors on the sidelines to be afraid. Moreover, they want investors who’ve amassed fortunes to sell their stocks and profit from the recession they say is imminent by selling stocks short.

“Say it ain’t so.”

The truth is there’s no recession in sight and the stock market is going higher, a lot higher.

And every moment you wait to jump in, you’re missing out on profits.

Here’s what the recession narrative’s all about, who’s behind it, how the economy’s really doing, where the markets are going and why, and how to make 25%, 50%, 100% and more, over and over, as markets head higher…

I’m Not the Kind of Guy to Say I Told You So, But If I Was…

0 | By Shah Gilani

Believe me, I’m not the kind of guy to say, “I told you so,” but if I was, I’d sure be saying it now.

That’s because…

I’ve been telling you, my Wall Street Insights & Indictments readers, not to sell short this supposedly long-in-the-tooth bull market, not to believe naysayers, and to get on board with the still rising market.

I’ve been unequivocally bullish and predicting more and more all-time market highs in my Capital Wave Forecast, which you also get for free right here every Monday.

I’ve been inundating my paid subscription newsletter subscribers with specific reasons why markets are going higher and recommending new positions regularly, lately two or three at a time.

I’ve been right. You should be making money on this latest leg up in the market like my subscribers are.

So, yeah, I’m saying it, “I told you so!”

Now, I’ve got to tell you about something very big in store