U.S. MARKETS:
After ending Wednesday’s session sharply lower, stocks saw significant volatility over the course of the trading day on Thursday. The major averages swung back and forth across the unchanged line before ending the day firmly in the red.
The major averages fell to new lows going into the close of trading. The Dow fell 250.91 points or 0.8 percent to 33,414.17, the Nasdaq slumped 128.13 points or 1.0 percent to 13,186.18 and the S&P 500 slid 36.60 points or 0.9 percent to 4,278.00.
The volatility on Wall Street came as Federal Reserve Chair Jerome Powell delivered highly anticipated remarks at an Economic Club of New York luncheon.
Powell argued in prepared remarks that inflation is “still too high” and warned additional monetary policy tightening may be needed.
Powell noted that shorter-term measures of core inflation over the most recent three and six months are now running below 3 percent but cautioned these shorter-term measures are often volatile.
“In any case, inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said. “We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters.”
He added, “While the path is likely to be bumpy and take some time, my colleagues and I are united in our commitment to bringing inflation down sustainably to 2 percent.”
Powell described the current stance of monetary policy as “restrictive” and reiterated Fed officials are willing to keeping policy restrictive until they are confident inflation is on a downward path.
Citing recent data showing the resilience of economic growth and demand for labor, Powell also warned additional monetary policy tightening could be needed.
“Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy,” he said.
Powell also addressed tightening financial conditions amid a recent increase in longer-term bond yields and said the Fed remains attentive to these developments, because persistent changes in financial conditions can have implications for the path of monetary policy.
Treasury yields moved higher following Powell’s remarks, extending the upward trend seen over the past few sessions and once again reaching sixteen-year highs.
The increase in yields also came as the Labor Department released a report showing initial jobless claims unexpectedly declined to a nearly nine-month low in the week ended October 14th.
The report said initial jobless claims fell to 198,000, a decrease of 13,000 from the previous week’s revised level of 211,000.
Economists had expected jobless claims to inch up to 212,000 from the 209,000 originally reported for the previous week.
With the unexpected dip, jobless claims dropped to their lowest level since hitting 194,000 in the week ended January 21st.
Sector News
Interest rate-sensitive commercial real estate stocks saw substantial weakness on the day, dragging the Dow Jones U.S. Real Estate Index down by 2.4 percent.
Considerable weakness also emerged among computer hardware stocks, as reflected by the 2.0 percent slump by the NYSE Arca Computer Hardware Index.
Pharmaceutical stocks also showed a significant move to the downside, with the NYSE Arca Pharmaceutical Index falling by 1.7 percent.
Networking, telecom and housing stocks also came under pressure over the course of the session, moving lower along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index tumbled by 1.9 percent, while Hong Kong’s Hang Seng Index plunged by 2.5 percent.
The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index slumped by 1.2 percent, the French CAC 40 Index slid by 0.6 percent and the German DAX Index fell by 0.3 percent.
In the bond market, treasuries moved lower over the course of the session, extending a recent downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 8.4 basis points to 4.988 percent.
Looking Ahead
Amid a quiet day on the U.S. economic front, trading on Friday may be impacted by reaction to the latest earnings news, with American Express (AXP) among the companies due to report their quarterly results before the start of trading.
SPX LIKELY TO MAKE NEW LOWS
The S&P 500 is in a historic bubble and could crash by 63%, markets guru John Hussman warns -Business Insider
The S&P 500 is poised to drop 63%; this according to market guru John Hussman. Overvalued markets, coupled with a cracking economy, make this no surprise to many; however, it seems many investors think the party can keep raging. This “reckless speculation” may ultimately be their undoing.
by Theron Mohamed
franklin”Market valuations stand at one of the three great bubble extremes in US history,” rivaling the peaks of 1929 and 2000, the veteran investor and financial historian said in his latest research note. Those two previous periods of reckless speculation ended disastrously, and the current bubble is likely to unwind in similar fashion, he added.
The Hussman Investment Trust president based his bleak outlook on an analysis of stock-market returns over the last century or so. He cautioned that virtually every market cycle in history has ended with projected S&P 500 total returns returning to historical norms.
“At present, that would require a market loss on the order of -63% in the S&P 500,” he wrote, raising the prospect that the benchmark stock index could fall to around 1,600 points, its lowest level since 2013.
“That’s not a forecast, but it certainly is a historically-consistent estimate of the potential downside risk created by more than a decade of Fed-induced yield-seeking speculation,” he continued. “Buckle up.”
The war in Ukraine, along with the unprecedented attacks in Israel by Palestinian militant group Hamas
last weekend, may have “far-reaching impacts on energy and food markets, global trade and geopolitical
relationships,” Dimon said in a statement accompanying the bank’s third-quarter earnings release. “This
may be the most dangerous time the world has seen in decades,” Jamie Dimon said. – Megan Henney,
“JPMorgan CEO Jamie Dimon warns: ‘This May be the Most Dangerous Time the World has seen in
Decades’: Sounds Alarm over Economic Outlook Amid Israel-Hamas War,” www.foxbusiness.com,
October 13, 2023.
Billionaire investor Ray Dalio said there’s a 50-50 chance a world war will break out in light of the Israel-Hamas conflict.
“In my opinion, this war has a high risk of leading to several other conflicts of different types in a number of places, and it is likely to have harmful effects that will extend beyond those in Israel and Gaza,” Dalio wrote in an essay titled “Another Step Toward International War,” which he posted Thursday on LinkedIn.
“Primarily for those reasons, it appears to me that the odds of transitioning from the contained conflicts to a more uncontained hot world war that includes the major powers have risen from 35% to about 50% over the last two years.”
https://tinyurl.com/3mfhf7zf
Most wars start on New Moons. The New Moon may have coincided with Monday’s ‘bull trap’ rally peak.
HEADLINE: CHINA IS BUYING GOLD
https://tinyurl.com/yjx33j4e
Mark Leibovit’s Market Forecast for the Major Markets
https://tinyurl.com/5acyxmup
CRYPTO UPDATE AS OF OCTOBER 19, 2023:
https://www.cato.org/study/risks-of-cbdcs
This Chart Should Have You Quaking with Fear -Daily Reckoning
Everyone is familiar with the expression, “a picture is worth a thousand words”; the graph here depicts the bubbles we have waiting to pop in our markets today and can be summed up in one word … terrifying. This particular graph has been utilized since 1928 and has been one of the more consistent foretellers of market movement.
by Vern Gowdie
We have no control or influence over what the Fed or any central bank may or may not do.
We cannot control the level of incompetence exercised by elected officials.
The only thing we have power over are our own thoughts and actions.
Knowledge is the key to successfully navigating, what I anticipate, is going to be a very challenging period ahead.
What we think we know (based on a multitude of long-established valuation metrics) is the US share market peaked in late 2021, at what can be best described as…an extremely over-valued level.
Historically, over-valued and under-valued markets go through a time-honoured process of ‘mean reversion’…falling to lower levels or rising to higher levels.
John Hussman’s ‘Durable Gains’ chart – tracking the emotional ebb and flow of the S&P 500 (blue line) against the mathematically determined ‘True Value’ (green line) since 1928 – illustrates how, over the longer term, the S&P 500 ‘ducks and weaves’ its way around the level of ‘true value’.
When social mood is less than upbeat – Depression, The Second World War and the Inflationary 1970’s – the S&P 500 falls below its True Value…a signal to buy…one most people ignore.
Conversely, if people’s spirits are buoyed by a feeling of prosperity (the 1950s and 60s and 1995 onwards), the S&P 500 is pushed higher by a feel-good air of optimism…a signal to reduce exposure…again, one most people ignore.
Global central banks are hoarding gold like never before as they seek to reduce ‘overconcentration’ of dollar reserves -Business Insider
by Anil Varma
gold USAGlobal central banks have been snapping up record amounts of gold since the start of 2022 – a trend that should continue as countries look to move away from an “overconcentration” of reserves in the dollar, according to State Street Global Advisors.
Monetary authorities across nations made net purchases of 387 metric tons of the yellow metal in the first half of 2023, after buying an unprecedented 1,083 tons the whole of last year, the world’s fourth-largest asset manager said in a recent note.
In addition to reserve diversification, the trend is also driven by central banks’ desire to strengthen balance sheets and increase liquidity without adding credit risk, according to the firm.
“The reasons driving central bank gold purchases – to diversify their reserves, improve their balance sheets, and gain liquidity from an asset without credit risk – likely won’t change given today’s increasing economic and geopolitical risks,” Maxwell Gold, head of gold strategy at State Street, wrote in the note.
“Therefore, as we look ahead, we expect central banks to continue their role as net purchasers of gold,” he added.
JPMorgan’s Marko Kolanovic braces for 20% market plunge, delivers recession warning -CNBC
by Stephanie Landsman
JPMorgan’s Marko Kolanovic is bracing for a 20% sell-off to hit the S&P 500.
According to the Institutional Investor hall-of-famer, high interest rates are creating a breaking point for stocks — and choosing cash at a 5.5% return in money market and short-term Treasuries are a key protection strategy right now.
“I’m not sure how we’re going to avoid it [recession] if we stay at this level of interest rates,” the firm’s chief market strategist and global research co-head told CNBC’s “Fast Money” on Thursday.
The S&P 500 closed at 4,258.19 on Thursday and is on the cusp of a five-week losing streak. The index is down more than 5% over the past month.
Kolanovic believes the weakness isn’t a strong sign a monster move lower is already here. He indicates a near-term bounce is still possible because a lot hinges on economicreports over the next few months.
“[We’re] not necessarily calling for an immediate sharp pullback,” he said. “Could there be another five, six, seven percent upside in equities? Of course… But there’s a downside. It could be 20% downside.”
No Privacy, No Property: The World In 2030 According To The WEF -ZeroHedge
The WEF. This may or may not be a familiar term to you, but it stands for the World Economic Forum. They’ve been trucking along for 50 years now and have rather quickly become known for “futuristic thinking & planning” when it comes to determining projections for societies, economies etc. The group consists of business and political leaders alike.
Their recent projections don’t bode well for our cherished liberties.
Authored by Madge Waggy via SevenWop.home.blog
The World Economic Forum (WEF) was founded fifty years ago. It has gained more and more prominence over the decades and has become one of the leading platforms of futuristic thinking and planning. As a meeting place of the global elite, the WEF brings together the leaders in business and politics along with a few selected intellectuals. The main thrust of the forum is global control.
Free markets and individual choice do not stand as the top values, but state interventionism and collectivism. Individual liberty and private property are to disappear from this planet by 2030 according to the projections and scenarios coming from the World Economic Forum.
Individual liberty is at risk again. What may lie ahead was projected in November 2016 when the WEF published “8 Predictions for the World in 2030.” According to the WEF’s scenario, the world will become quite a different place from now because how people work and live will undergo a profound change. The scenario for the world in 2030 is more than just a forecast. It is a plan whose implementation has accelerated drastically since with the announcement of a pandemic and the consequent lockdowns.
According to the projections of the WEF’s “Global Future Councils,” private property and privacy will be abolished during the next decade. The coming expropriation would go further than even the communist demand to abolish the property of production goods but leave space for private possessions. The WEF projection says that consumer goods, too,
would be no longer private property.
If the WEF projection should come true, people would have to rent and borrow their necessities from the state, which would be the sole proprietor of all goods. The supply of goods would be rationed in line with a social credit points system. Shopping in the traditional sense would disappear along with the private purchases of goods. Every personal move would be tracked electronically, and all production would be subject to the requirements of clean energy and a sustainable environment.
What happens if the government shuts down: An illustrated guide-CNN
With Congress barreling toward a government shutdown, many Americans are wondering how it could affect them. Here’s a guide to what you can expect.
What is a government shutdown?
A government shutdown happens when Congress doesn’t approve funding for the federal government by the time the new fiscal year starts on October 1. Each year, Congress must pass the 12 appropriation bills that make up the discretionary spending budget and set funding levels for federal agencies.
What happens during a government shutdown?
If lawmakers fail to enact all or some of the appropriation bills, many government operations grind to a halt, resulting in a full or partial government shutdown until Congress acts. However, government functions that are deemed essential will continue.
Each federal agency comes up with a contingency plan that outlines which of its functions will continue during a shutdown and which will stop, as well as how many of its employees will continue working and how many will be furloughed until the shutdown ends.
What it means for you
Because many federal workers are off the job during a government shutdown, many services are stopped or slowed, disturbing the day-to-day life for many Americans.
Notably, Social Security payments to seniors, Americans with disabilities and others would continue to be distributed. The Postal Service will also continue regular service.
Here are some examples of how a shutdown could affect you.
The SEC is Snooping on All Your Trades
EDITOR’S NOTE: The War on Cash is fought on a variety of fronts but the end result is always a loss of liberty and privacy for us all. The SEC’s sharing of the data on every market move we make is just the latest strategy. While the tracking should be alarming in and of itself, the threat of this information being open to hacking is of even greater concern. A centralized database to track every American investor is, without question, an unconstitutional data grab; but can it be stopped?
What’s in Your Portfolio? The SEC is Snooping on All Your Trades -MishTalk.com
portfolioThe SEC is now tracking your stock trades by your Social Security Number. It shares the data with 3,000 outside agencies.
In 2012 the SEC approved a new rule requiring a Consolidated Audit Trail to Monitor and Analyze Trading Activity.
“A consolidated audit trail that accurately tracks orders throughout their lifecycle and identifies the broker-dealers handling them will provide us with an unprecedented ability to effectively oversee the markets we regulate,” said SEC Chairman Mary Schapiro.
The new rule becomes effective 60 days after its publication in the Federal Register. SROs are required to submit the NMS plan to the Commission within 270 days of the rule’s publication in the Federal Register. Once the Commission approves the NMS plan, the SROs are required to report the required data to the central repository within one year, and members of the SROs are required to report within two years. Certain small broker-dealers will have up to three years to report the data.
This ruling was in response to a 2010 flash crash and quietly sat for years. The SEC is now following through.
The scope of the Consolidated Audit Trail, or CAT, a regulation the SEC issued in 2016 but implemented only recently, is breathtaking and unprecedented. In the words of the SEC press release, the regulation instructs regulated financial institutions to identify “every order, cancellation, modification and trade execution for all exchange-listed equities and options across all U.S. markets.”
What about the January Barometer?
The January Barometer calls for a positive year-end outcome, but a lot can happen between now and then. Please check with previous editions discussing the calculation of the Barometer.
https://tinyurl.com/2rd9wv52
OPPORTUNITY TO ACCESS MARK LEIBOVIT’S PROPRIETARY VOLUME REVERSAL INDICATOR – THIS IS THE ONLY PLACE TO DO IT!
https://www.metastock.com/
COME ON, DAD. IT’S TIME TO EAT
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