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The BIG MELTDOWN - Possible END of Long Bull Market

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Nouriel Roubini: This recession will be worse than the last one, ‘worse even than the Great Depression’

Nouriel Roubini, Professor of Economics at NYU Stern, joins Yahoo Finance’s On The Move panel to discuss how the government has handled the coronavirus pandemic and the severe economic damage coronavirus COVID-19 is having on the economy.

 

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Airlines Plunge After United Sees"Essentially Zero" Demand, No Recovery

The mini bounce after US airlines reached a bailout deal on Tuesday with the US Treasury lasted exactly one day, and on Thursday US airlines stocks sank after United Airlines warned that travel demand was "essentially zero," and showed no signs of in the near term.

The US carrier warned its employees of bleak times and potential long-term payroll cuts despite billions of dollars in U.S. taxpayer assistance, saying the outlook for travel demand will remain depressed into next year. In response to the collapse in demand, United said it will further cut its flight schedule in May to roughly 10% of the capacity it had planned at the start of 2020, and similar cuts are in store for June, said Chief Executive Officer Oscar Munoz and President Scott Kirby. As an example of the shortfalls, the carrier will fly fewer people during all of next month than on a single day in May 2019.

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The amount of maintenance required just to keep an aircraft parked on the ground is hugely costly.

You don't just park it up and leave it like a car. Airlines will be going bust or taken over because it's unsustainable unless things return to normal very soon.

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‘Sell in May and go away’ is a warning to stock investors now more than ever

The stock market’s most favorable six-month period is coming to an end, without much to show for it.

I’m referring to the six-months on, six-months off seasonal pattern that goes variously by the names “Halloween Indicator” and “Sell in May and Go Away.” This pattern is based on the historical tendency for the U.S. stock market to produce its best returns between Halloween and the subsequent May Day (the so-called winter months). Over the next six months, (the so-called summer months), the stock market’s average historical return has been far lower.

Why the stock market is nowhere near a bottom and investors can expect a massive hit

Strategist sees S&P 500 tumbling to as low as 1,275 before a bull market can resume

1. Investors are too bullish...

2. No technical signs of a long-term bottom...

3. Valuation headwinds: Another challenge for the long-term bull case is valuation. The S&P SPX, +2.67% s currently trading at a forward P/E ratio of 17.3, which is above its 5-year average of 16.7 and 10-year average of 15.0. Moreover, we are entering first-quarter earnings season, and the “E” in the forward P/E ratio is going to be revised substantially downwards.

This widely used stock valuation measure says the S&P 500 is 35% overpriced

Stock analyst’s discounted cash flow model calculation pegs S&P 500 fair value at 1,800

Here’s how to read Deluard’s results: Given his assumptions, the S&P 500 would have been fairly valued at its Feb. 19 high if we assume a discount rate of 6.2%. If we instead assume a discount rate that is equal to the long-term average, then the S&P 500’s fair value falls to 1,851 — 45% lower than its Feb. 19 high.

Stocks will revisit their coronavirus crash low, and here’s when to expect it

Man who warned of the coronavirus crisis months ago says ‘gut’ tells him ‘a 50% or deeper decline

(on the other hand):

Goldman Sachs abandons its bearish near-term view on stocks, says the bottom is in

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Goldman Now Sees A 123% Plunge In Q2 S&P Earnings, $850BN Drop In Corporate Cash Spending

With 9% of S&P 500 firms having already reported Q1 earnings including all of the major banks, results have generally disappointed relative to already tepid expectations. 43% of companies have missed consensus expectations, on pace for the highest rate since at least 1998 with earnings set to drop by 15% Y/Y, but it's Q2 where the real pain will be with Goldman now expecting S&P 500 to plunge by a record 123% plunge.

As a result, the very same Goldman which last week announced it no longer expects the S&P to retest the lows and pulled its S&P to 2,000 base case while predicting that stocks will surge to 3,000, which would make forward PE multiples just shy of a bizarro-world 30x, now forecasts S&P 500 cash spending will decline by an annual record 33% during 2020 as firms prioritize liquidity in a worsening economic environment.

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Von Greyerz: A Hyperinflationary Depression Has Always Been The Inevitable Endgame

A Hyperinflationary Depression has always been the inevitable end to the biggest financial bubble in history. And this time it will be global. Hyperinflation will spread from country to country like Coronavirus. It could start anywhere but the most likely first countries are the US and the EU or ED (European Disunion). They will quickly be followed by many more like Japan and most developing countries. Like CV it will quickly jump from country to country with very few being spared.

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The Coming Depression

Excellent 120 page REPORT,  loaded with charts, and deep thinking

xx > https://drive.google.com/file/d/1nWQVpbyeVqwB1qHHVXs1G19b9_iUvrX9/view

SUMMARY

 

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BIG JUMP for stocks on Monday

SPY  $295.00+8.72, +3.05%
INDU 24.597 + 912, +3.85%

The market really jumped on moderna vaccine trial 1 results as if the vaccine is a done deal. Sure moderna jumping 20% I understand but the vaccine being a done deal is far far away I think. Talking to doctors they shake their heads that it will not be soon. But united airlines jumped like 20%, Norwegian cruise 17%, remax property 14%  , carnival cruise 14%. The market quickly priced in the success of the vaccine trials. I hope it's TRUE this vaccine will be real and deliverable to front lines this year.

====

Billionaire investor Stanley Druckenmiller questions the optimism of a strong “V-shaped” recovery for the global economy.

Although equity markets have seen a sharp recovery since bottoming out in March when the world just began to feel the economic impact of the coronavirus, there is doubt it will last, reports Kitco News. Druckenmiller said on a webcast this week that “the risk-reward for equity is maybe as bad as I’ve seen it in my career.”

> https://www.kitco.com/commentaries/2020-05-18/Gold-swot-no-major-new-gold-discoveries.html

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CYCLES Call: "SELL stocks!"

"I think it will go all the way down. A low in 2022."

Charles Nenner is a former doctor who loved markets and switched from medicine to work as a technical analyst at Goldman Sachs. He has used his cycles to make a series of good calls on markets.  Recently, he and his clients sold US stocks they bought on the drop. He is also Bearish on Bonds and is bullish on Gold/ Charles Nenner on USAwatchdog >

Renowned geopolitical and financial cycle expert Charles Nenner sees, “A reversal in rates long term, and they are headed up. . . . Rates are going to rise.”  

(He also has spoken with Doctor friends who think there might be a second series outbreak of Coronavirus before year end, The immune system might only work for 3-6 months.. Then, another outbreak.)

On gold and silver, Nenner says his next price targets are “$2,500 per ounce on gold and $20.50 on silver . . . And prices can go much higher in the next few years . . . . Until 2026 in the gold market, there is going to be a bull market.”

On President Trump getting re-elected, Nenner says, “For the last 130 years, once the cycle on interest rates turns up, the party in the White House continues to be re-elected.  Isn’t that interesting?  Don’t ask me why.   So, it looks like (Trump) he’s going to be the next President based on that cycle.”

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Excellent interview:

Kyle Bass on Corona Chaos, Insolvency Risk, & US-China Tensions (w/ Raoul Pal)

- Bass expects new Highs in stocks, and a faster than expected recovery (in US & elsewhere) -

- Re-hirings ahead /

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NEAR A TOP?

He sees a Top in Silver coming at $24-26.  And then a 6-9 months correction, and a Stock bear market

"Stocks could rollover from a double top within the next month.

Then, as stocks fall, Gold and silver will rollover too."

After the correction in silver, it will be ready for a really huge move to $48 and beyond.

Chris Vermeulen: Caution Advised Before Gold Targets $5000 and Silver Targets $100+

He also sees the USD falling and is "in a major downtrend" ... to Major Support at $93-94... then a big bounce

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