Hello MarketClub members everywhere!
Once again Janet Yellen, the chairwoman of the Federal Reserve, gave the market yet another easy money "fix". Easy money is the drug of choice for this market and has been for the past six years. Can the insanity of printing more and more money keep going on and on, or will the market have to go into rehab and kick its easy money dependency? Only time will tell. Eventually someone, and that means all of us, will have to pay the piper.
As of today, many stocks, including the major indices, remain locked in broad trading ranges. This could all change as we come to the end the first quarter and move into April. Continue reading "Apple's Secret Weapon"
After a wild day in the markets yesterday, Mario Draghi, president of the European Central Bank, was at center stage this morning. What he said was almost incomprehensible to most people, including me. The clear takeaway was that European interest rates will not be going higher anytime soon. He was also asked what instruments the ECB have left to fight the current impasse in the markets. His answer was classic mumbo-jumbo Central Bank talk and did not address the question at hand.
It seems to this observer that the ECB and the Fed are literally out of ammo and have no clue what to do next. Fed chairwoman Janet Yellen's decision to raise interest rates here in the United States was, in my opinion, too late to have the desired effect. Should the markets head south as it looks like they may be doing, does the Federal Reserve have a backup plan or do they move rates back down again to stimulate the economy with another QE? Continue reading "The Head Of The ECB Speaks - What Did He Say?"
At long last, the market finally got their long awaited Federal Reserve rate increase. Yesterday, the Fed hiked the Fed Funds rate by 25 basis points, from 0.25% to 0.5%. The Fed's famously watched "dot plot" revealed that most members expect at least four rate hikes in 2016. And investors? If interest rate swaps are any indication, then investors expect no more than two rate hikes next year.
So who is right then? The Fed? Or the market? Continue reading "Fed At Odds With Markets Over Oil"
Before I dive into yesterday's rate increase, I just want to ask you, are you enjoying the 12 Days of Trading Tips? It's always a good thing to refresh your mind and energize yourself by reviewing some of the fundamentals of trading. I think today's trading tip on market timing is one everyone should read as it underscores the old market saying, "Bulls make money, bears make money and pigs get slaughtered."
Yesterday Janet Yellen, Federal Reserve Chairman, finally gave her long-awaited blessing to raise interest rates. It's perhaps the most anticipated rate hike in history and the first jump in almost a decade. I believe that the Fed should have acted months ago and they are still trying to figure out how to clean up the mess they created. Continue reading "Will Santa Be Happy With Yesterday's Rate Increase?"
Hello everyone and happy Cinco de Mayo.
Let's start with Greece. It is an ongoing disaster that nobody wants to face, especially the bankers who may have to take a 50% haircut on their loans, that's if they're lucky. I think it was Citibank's former chairman, Walter Wriston, that said, "Countries don't go bankrupt." Welcome to the real world Walter. Greece is going to default or there is going to be a revolution in the country.
That leads us to the Federal Reserve. I'm not sure they fully understand and know what they're doing. I think this grand experiment of quantitative easing has gotten way out of hand. In hindsight, it looks like the Fed got the country into something that we didn't have a plan to get out of. The answer to this conundrum was always down the line and some time in the future. The Fed has had over six years to figure this out and there is still no plan to get out of it. "More data" is another way for the Fed to say, "we don’t know!" Ben Bernanke is gone and now has a new job with a hedge fund and Janet Yellen, the new Fed chairwoman, is another disciple from the same school of thought that Ben came from. So, what do you think? Do you think the Fed has any idea what it's doing? Continue reading "There Is Not Much Difference Between The Fed And Greece"