Italian PM Giuseppe Conte resigned today as tensions between the coalition government came to a boil. The coalition of the far-left Five Star Movement and the far-right Lega Part is no more. Lega Party leader, Matteo Salvini, is seeking to become the country’s next PM. His rise to power over the last couple of years has been consistent with the growth is nationalist and populist movements the world over. Emboldened by recent EU Parliament elections, Salvini has the PM post in his cross-hairs. It is not certain that he will win, but should he, this will cause many more headaches for the top brass within the EU. As the Brexit saga continues to unfold, will the EU next have to deal with an Italeave? If they do, this is all but the kiss of death for the “European Experiment.” In other news, global markets continue their whip-saw movements, yet still find themselves range-bound. This consolidation will not be long-lived and they will break-out either strongly to the upside or to the downside. So be sure to stay diversified, stay vigilant, and stay with The Kapital News. #Italeave #Brexit #EU #WakeUpAmerica #Economics #Politics #Peace
In a refreshing display of civil conversation, Senator and Presidential candidate Bernie Sanders, recently sat down with Joe Rogan for a podcast interview. The talk lasted about an hour and several topics were addressed at length. This is of course a different setting than the debate stage, where currently we have 20 candidates on stage all fighting for attention. So it becomes a game of sound bites and quick-witted responses, as opposed to substantive analysis and commentary. The Kapital News highly suggests taking the time to listen or watch the podcast, especially if you are not a fan/supporter of Bernie Sanders. This setting allows for a calm and lengthy discussion of the many structural issues that are facing this country and that personally affect millions of Americans. Maybe, just maybe, with this type of conversation, in this setting, the public can be made more aware of a candidate’s ideas and vision for this country. As opposed to the reality TV show debates that are much too common. Stay diversified, stay vigilant, and stay with The Kapital News. #BernieSanders #JoeRogan #DemDebates #WakeUpAmerica #Politics #Economy #2020
We take a look at the US unemployment figures to see if we can make a determination as to where we currently reside within the business cycle. While unemployment currently rests at multi-decade lows, is this indicative that this history making expansion, is nearing it’s end? That is to say, is this expansion about to hit it’s peak, or perhaps, has it already peaked? These are the questions we examine and we analyze this data to create a range of dates as to when the peak of this current expansion is likely to be determined. This is but one metric utilized in making this determination, however, it is an important figure. #Recession #Economy #Investing
The Federal Reserve cut interest rates by 25 basis points today, this is the first cut in over a decade. The Fed also decided to end their run-off of their balance sheet, in what has become known as quantitative tightening, QT. While Chairman Jerome Powell gave Wall Street what it was asking for, Wall Street is never satisfied and the markets sold off – with the major indices down 1%. This is on the back of Powell’s statements, where he claimed that this was an “insurance” cut to hedge against global uncertainties, and that moving forward, the FOMC will do what is necessary to “sustain” the economic expansion. However, he came up short when he did not explicitly note that this is the first of more rates cuts to come – what Wall Street was hoping to hear. It’s never enough for the addicts on Wall Street and while one down day does not make a trend, this is likely to set up as a, be careful for what you wish for situation. The Kapital News is predicting that this will be the beginning of a new easing-cycle and we will also not be surprised if there is another round or version of QE in the not too distant future. Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #WakeUpAmerica #Economy
A conclusion to the G-20 meeting in Japan over the weekend has left the globe with a trade truce between the US and China. This time, however, there is no deadline as to when a deal must be struck. This is in contrast to the 90-day deadline that was established following the trade talks during the G-20 meeting in Argentina in 2018. This still leaves a tremendous amount of uncertainty, which is likely to translate into businesses still remaining skittish when it comes to making new plans. The Kapital News is of the opinion that since we are now in a trade truce, as was expected from the markets – what will the markets turn to next? If it’s fundamental economic data – the markets might not like what they see. On another note, the Federal Reserve released their findings from their bank stress tests and guess what? – everybody passed! Even Deutsche Bank passed, which just recently stated that they want to spin-off 50 billion euros worth of bad loans into a “bad bank” as well as lay-off an additional 20,000 employees. Have we stated that this is the financial world of Oz?
With the recent reading of 3.2% for 2019 Q1 GDP beating expectations by a mile, it makes us skeptical as to what’s going on. A major driver of GDP growth was an increase in inventories. However, imports were down and we have been told throughout Q1 that production has been stagnant or slowing. Therefore, how were inventories built up to such a degree? We also have the Fed meeting this week, so it’ll be interesting to see how they play this recent GDP report because we still have The White House advocating for interest rate cuts and QE4. Wait?! We thought everything was fine – why then would we need the implementation of emergency measures?
With some better than expected numbers from a few companies that released their 2019 Q1 financials, the S&P 500 and Nasdaq hit new all time highs. What does this mean? Is everything ok or might we be in the midst of a stock market “melt-up” and this “recovery” ends up being a sucker’s rally? Stay tuned as there are many more big-name companies set to report this week.
Ep. 48B - Record Bank Profits + Central Bank Warnings
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So much for draining the swamp as Q1 earnings season has kicked-off only to find that so far, the banks are continuing to make record profits. Remember, these guys make private gains, but their losses are socialized – meaning you pay the bill and bail them out! Also, a warning shot across the bow from former Fed chairman Alan Greenspan regarding entitlement spending and the demographics of the USA. A look at the Fed’s meeting minutes from March also sheds some lights on their concerns regarding the leveraged-loan market.
We take a look at quantitative easing and its effects on the stock market. Well no surprise to us, this entire 10 year bull market has been bought by the Federal Reserve and is paid for by the Middle class of this country. When this bubble bursts, don’t be surprised if we go back to 2009 levels when QE started – that’s a 75% decline by the way. Are you ready?
