Only a few days ago the US equity markets suffered their worst day of 2019 with the Dow losing 800 points. Fast-forward only a few days and all of a sudden fears of recession no longer seem to exist and all is right in the world. This is of course a bunch of spin, nonsense, and headline news, but it is predicated on the hopes that countries around the world will begin to embark on stimulus measures. You know it’s bad when the German government is getting ready to abandon their balanced-budget and go on a debt binge in the hopes of reviving their economy. China is expected to expand upon their stimulus measures. The ECB is getting ready for next month’s policy meeting to lower interest rates even further into negative territory, and they may even hint at or start another round of their QE. Meanwhile here in the US, the President is once again calling on the Federal Reserve to cut interest rates by 100 basis points and to begin another round of QE. The President is also making more concessions to China – delaying tariffs, removing more products from the list that were supposed to be subject to tariffs, and even expanding the window in which US companies can continue to sale to the “national-security” threat of Chinese telecom giant, Huawei. Is it a national-security threat or isn’t it? Are we in a hurry to land a deal or aren’t we? It appears that the President is negotiating with himself as he escalates and de-escalates the trade war all on his own and China gives up nothing in return and is still threatening retaliation nonetheless. Once the markets are forced to examine the data under-the-hood, they’re not going to like what they see and it won’t be pretty. If you have to simulate – you are not strong. Stay diversified, stay vigilant, and stay with The Kapital News. #WakeUpAmerica #TradeWars #Recession #Economy #EndTheFed #Politics #Investing #FireNavarro
In an about-face, the President today is delaying some of the tariffs that are supposed to go into effect on 1 September. Recall, an additional $300 billion worth of Chinese goods were to be subject to a 10% tariff. Now, it appears that half of this total will go into effect next month, while the remainder will be postponed until 15 December. Why? Especially if tariffs are so good for the US? Well, according to the President, he’s concerned with the upcoming holiday shopping season and doesn’t want to expose US consumers to higher costs. Wait a minute! Stop the presses! Haven’t we been told for months now that China is paying all of the tariffs and that US companies and consumers alike are shielded from higher costs and prices? Of course this argument is baseless and is simply not true. This then leads us to a couple logical outcomes – either the President and his Administration have been lying to the American people, or they’re incompetent regarding the machinations of tariffs. Neither is acceptable. This throws the credibility of the President and the Office of the Presidency right out the window. It also sends a message to China that President Trump was bluffing with these tariffs and he’s more concerned with the level of the stock market as opposed to truly “winning” a trade war. The Kapital News sent a letter to the President a few months ago raising concerns on this very issue of the trade war and the credibility of the President himself and the Office he holds. It’s one thing for Donald Trump, citizen and CEO of the Trump Organization to throw his credibility to the wind. It’s a completely different story when he’s the President of the United States – because the Office he holds, is the Office of the American people. This trade war needs to end and with it the talking out of both sides of the President’s mouth – the lies, the exaggerations, and the misleading statements are all a disservice to the American people and we deserve better. Stay diversified, stay vigilant, and stay with The Kapital News. #WakeUpAmerica #FireNavarro #Economy #EndTheFed #Politics #Trade #USA #China
Where to even begin?…We have alleged sex trafficker, Jeffrey Epstein committing suicide while in a maximum security prison. Of course the suicide remains in question. This is likely the tip of the iceberg when it comes to many individuals soon to be prosecuted for sex trafficking and the like. The figures in Epstein’s social circle consists of politicians, business executives, and celebrities. It is not a far stretch to imagine that a few members of “high society” are also somehow involved. However, everyone is innocent until proven guilty in a court of law. Clearly, something is amiss when a high-profile inmate commits suicide, is killed, etc… The question is, who benefits from his death? It is in this question that answers will be found. In global markets, we continue to witness a sell-off in equities, a flight to “safe-have” government bonds, and precious metals. Global yields continue to make multi-year lows and even all-time lows depending on the nation and the duration. The spread between the 10 and 2 year US Treasury is at its tightest spread in years and is nearly inverted. The 3 month and 10 year has been inverted for some time, yet, once the 10 and 2 year inverts, it’s basically a foregone conclusion that the end of this record-breaking expansion is drawing near. Protests continue in Hong Kong, leading authorities to shut down all out going air travel. This will be the 11th week of protests amid growing concerns that mainland China is seeking to exert more control over Hong Kong. This simply adds to the global uncertainty and may serve as another piece on the geopolitical chessboard, especially regarding the US-China trade war. Also, there was a surprise upset in the Argentinian elections – the market sold off 48% and the peso is trading at record lows against the US dollar. All corners of the globe are on edge and the bigger the bubble, the less the pressure that is needed to cause its bursting. Stay diversified, stay vigilant, and stay with The Kapital News. #Epstein #Justice #WakeUpAmerica #Economy #Politics #Investing #HongKong #Peace
Ep. 104A - Global Market Sell-Off + Currency Manipulation
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So the trade war between the US and China has taken another step as China is willing to allow the Yuan to depreciate against a basket of currencies, and they are halting the import of US agricultural products. On the US side, following China’s response to further tariffs being placed on Chinese products, the Trump Administration has officially named China a currency manipulator. What this means is truly anyone’s guess as the open secret is that all countries are currency manipulators in one form or another. Nevertheless, this is a clear signal that the two parties are further apart. As such, this information sent global markets spiraling to the downside, with many global equity indices losing as much as 3%. Yields on government debt continue to make all-time lows in many nations and are nearing all-time lows in many others. This is a function of a flight to safety, as well as markets anticipating that central banks around the world will continue to cut interest rates. In other news, President Trump signed an executive order placing further pressure and restrictions on the Venezuelan regime, thus increasing those tensions. According to South Korea, at least two more missiles have been fired by North Korea. This is of course following the historic visit from President Trump when he stepped foot into North Korea in late June. Also, tensions are rising between the Indians and the Pakistanis regarding the Kashmir region. What we have is a lot of dry powder and a number of lunatics wandering around with boxes of matches. What could possibly go wrong? Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #WakeUpAmerica #Economy #Recession
Lots to discuss, but first, our thoughts and prayers are with those who suffered needlessly in both El Paso, Texas, and Dayton, Ohio over the weekend in two separate mass shootings. There is no excuse for these acts of cowardice and evil and the nation truly has to come to grips with this problem that seems to happen much too frequently. On the global front, we have Asian markets continuing to sell-off as the escalation between the US and China has just taken another step, as Beijing has asked state-owned companies to halt their purchases of US agricultural products. This will add further strain to the negotiations and it can be said that the short-lived trade truce is over. Also, recall that last week President Trump called for 10% tariffs to be placed on an additional $300 billion worth of Chinese goods. We also have escalation between the Japanese and the South Koreans regarding their trade related issues. The protests in Hong Kong are continuing with Hong Kong leaders recently saying that the protesters are pushing Hong Kong to the brink. Recall that there is no Federal Reserve meeting this month, nor will Congress be in session since they are on vacation. This means that markets are without “guidance” from policy makers as to how they will respond to the above news. We said August was going to be an interesting month, and it appears it’s already shaping up to look that way. Stay diversified, stay vigilant, and stay with The Kapital News. #Recession #EndTheFed #WakeUpAmerica
With the major US indices posting their worst week of 2019 and other financial markets around the world suffering declines of -1%, -2%, and 3% for the day, let alone the week – the question remains, are global markets shocked? Did the global markets truly believe that a 25 bps cut from the Federal Reserve was going to be enough to conjure up the animal spirits of traders and investors alike? Or was it the “shock” that President Trump ended the trade truce and is calling on additional tariffs to be placed on Chinese goods effective September 1st? A combination of both perhaps, but nevertheless, the markets have priced in the action by the Fed and has been doing so for months. The trade story of how a deal was imminent, strung along global markets for months, only to find that no deal was made and now there is even further escalation – and the Chinese are vowing to retaliate. With the absence of the Federal Reserve and the Congress during the month of August – what will markets cling to as they hope for some sort of rescue? Hope is not a strategy and if they must now pay attention to the underlying economic and financial data, then perhaps this week’s sell-off may be the beginning of more to come. If so, we will not be shocked. Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #WakeUpAmerica #Economy #Recession
President Donald Trump took to Twitter this afternoon to note that the US will be imposing 10% tariffs on an additional $300 billion worth of Chinese goods. This is set to go into effect on September 1st. During the morning and early afternoon trading session, the major indices were nearing 1% gains, basically recouping their losses from yesterday’s news regarding the Federal Reserve’s decision to cut interest rates for the first time in a decade. However, these gains were quickly reversed following the news from The White House, whereby the major indices closed down around -1%. This news rippled through the oil markets, where at its lows was down around -8%. The 10 year US Treasury is also now yielding a multi-year low and is south of 2%. Across the globe, financial markets are selling-off in Asia and in the futures markets for Europe and the US. The question that remains is how will China respond? Another serious question, is how will Americans respond as we make our way through the 2020 election? Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #WakeUpAmerica #Economy
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
With the major central banks making monetary policy decisions this week, the financial markets are glued to their seats waiting in anticipation. Waiting for their dealer to give them their “fix.” The serious question remains, is this the final and fatal fix? A scenario of, be careful for what you wish for? The Kapital News believes this is the fatal blow – this assuming that central banks the world over embark on a new easing-cycle. This will likely consist of lower interest rates for longer once again, coupled with various rounds of QE, and we also imagine that “new” and “fancy” named policies will also be announced over the course of the coming months and years. Do not be fooled, it will simply be more monetary non-sense and alleged experts, shooting from the hip. The central banks have engaged in a decade’s long monetary experiment – it has not worked. They will not fess up to this reality and so they will continue with their flawed and fraudulent policies and the global economy, society, and political institutions will all suffer the consequences. Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #WakeUpAmerica #Truth
We have a busy week coming up with lots of political and economic news and data being released. The Federal Reserve along with the Bank of England and Bank of Japan will be deciding on monetary policy. The Kapital News is anticipating the beginning of the next easing-cycle, especially regarding the Fed. Other global economic data releases will pertain to PMI figures, trade and income numbers, Eurozone Q2 GDP, UK and Japanese consumer confidence figures, and Australian inflation numbers. On the political front, here in the US, Director of National Intelligence, Dan Coats has resigned and will likely be replaced by Republican Congressman, John Ratcliffe. Ratcliffe has been a vocal supporter and defender of President Donald Trump, especially regarding the Mueller investigation. Will the President use Ratcliffe as a means to investigate the investigators as he will have access to information that very well may have led to the claim of Russia-Trump conspiracy or perhaps information showing that there may have been an abuse of power during the Obama administration? Stay diversified, stay vigilant, and stay with The Kapital News. #EndTheFed #WakeUpAmerica #Justice
