Today 9:12 am
You aren't the only one sounding the alarm.LowIQTrash » Yesterday, 3:56 pm » wrote: ↑ Fuel “Money” Man, I saw this coming back in Nov!
Enjoy this final rally…whatever you’ve been accustomed to in the past 20~ yrs will not apply for the next 15.
It’s Not Bad, It’s HorribleThe yield curve in the bond markets, calculated as the ten-year bond yield minus the two-year bond yield, has now been steepening from negative (or inversion) territory. This event is significant because it has predicted every recession in the past 30 years with 100% accuracy, and today, this curve tells everyone the market is about to see the worst crash in yield curve history. That said, investors can examine some of the subtle hints present today. Consumer confidence indexes are at cyclical lows, and consumer discretionary stocks have reported lower earnings guidance, citing less spending and heightened consumer caution. Then there is the business side of things, with the PMI indexes also softening as a warning that United States GDP growth will likely fall below economists' expectations. While all of this fundamental data is important, there’s a better way to time the market in this case: by tracking some of the biggest constituents in the S&P 500 index. These include the so-called “Magnificent 7” stocks, with a special focus on Apple Inc. (NASDAQ: AAPL) and NVIDIA Co. (NASDAQ: NVDA). Both of these stocks have fallen below their respective 20% discount from their highs, meaning the market wasn’t willing to step in and support them back into safety. More than that, their valuations tell a similar story. Both of these stocks see their forward price-to-earnings (P/E) ratios sitting at cyclical lows, and any seasoned trader will take this as a sign that the market is discounting even the best names. There must be a reason (a bearish one at that) for these discounts to be in place. That very reason might also be why Warren Buffett decided to reduce his positions in the market today, selling completely out of the S&P 500 and significantly cutting his stakes in Apple and other holdings in the United States. Whether investors look at the market today in a technical or fundamental way, the theme centers around a massive crash.