You can see on my chart below that the price for copper has been surging since the end of 2016. The question every investor must ask is whether the surge is to be long-lived, or is fleeting. Scott Patterson of the Wall Street Journal serves readers some much needed information about the current state of the copper market today. A year ago, miners were haunted by hair-raising worst-case scenarios in commodities as growth in China stalled, investors panicked and prices fell to what Barclays called their lowest levels in 30 years. Anglo said it would cut its workforce in half. Glencore … [Read more...]
What Dow 20,000 Means for Nasdaq Investors
Investors pay a lot of money to sound good at cocktail parties. Owning growth companies, often found in the NASDAQ Index, sounds exciting, cutting edge, and like a can’t miss investment. But good ideas often make for terrible investments, whereas good “values” make for great ones. That’s why you should always consider the value you’re getting for any stock you purchase. An easy way to do that is to evaluate a stock's dividend and dividend increases over an extended amount of time. A simple comparison of how this dividend-centric approach has worked over the last 17 1/2 years is to compare … [Read more...]
One Look at America’s Debt Will Make You Cringe
These two charts paint a disturbing picture for the future of America’s finances. Over the last eight years, the Federal Government has gone on a spending spree, more than doubling the ratio of government debt to GDP. One would think such a large increase in government debt would have been an expensive proposition, but it wasn’t. A zero interest rate policy from the Fed and a multi-trillion dollar bond buying program subsidized massive budget deficits. Our chart on the ratio of interest expense (gross) to GDP shows that Federal interest expense as a share of the economy is now lower than it … [Read more...]
Bond Bear Market Watch: Are we there yet?
We continue to watch the key 2.60% yield level on 10-year Treasuries. A meaningful break above the 2.60% yield level will likely signal the end of the over three-decade secular bull market in bonds and the beginning of a new secular bear market in bonds. The 10 year yield has retreated from its highs of late last year, but still remains within striking distance of the key 2.60% level. Savvy investors should continue to watch the direction of longer-term interest rates as they are likely to set the tone for a broader range of asset prices in 2017. … [Read more...]
This is What you get Free Each Week with Portfolio Strategy
If you are new to our site or haven’t yet signed up for our free weekly Portfolio Strategy service, below is just a taste of what you missed this year. And these are just my posts. Each week our goal is to bring you our most cogent thoughts on the economic and financial landscape. Our weekly email service helps investors, both novice and expert, cut through the noise and invest their serious money with the savvy and sophistication of a seasoned pro. If you have family or friends who you would like to share our free Portfolio Strategy service with, just click the button with the envelope on … [Read more...]
Can NatGas Now Crush Coal Without Killer New Regulations?
Whether or not the Clean Power Plan (CPP) is implemented, the EIA predicts that the future belongs to natural gas. However, without the implementation of the CPP, coal's share of net electricity generation would increase through the middle of the next decade before beginning to tail off again. … [Read more...]
Massive Oil Discovery by USGS Could be Largest Ever in America
A 20 billion barrel shale deposit found in the Midland Basin of Texas could be America's largest ever untapped oil discovery. The shale deposit is known as the Wolfcamp, and could be worth up to $900 billion at a West Texas Intermediate crude price of $45. … [Read more...]
After Breathtaking Catastrophe, Delinquency Rates are Near Bottom
Mortgage delinquency rates are nearing 1% for the first time since 2008 on the Freddie Mac index of single-family conventional home mortgage delinquency rates. … [Read more...]
Do Presidential Elections Hurt or Help Consumer Confidence?
From the end of July, through the end of November, consumers are barraged by negative campaigning and big promises. Take a look at the chart below to see how their confidence was affected by each campaign cycle. Ending values greater than 100 indicate an improvement in confidence, and values below 100 indicate a decline in confidence. … [Read more...]
The IMF is Warning People about China’s Frightening Debt Gap
In a recent IMF working paper, a group of economists led by Wojciech Maliszewski rings an alarm bell over China's debt gap, which is looking more dangerous all the time. … [Read more...]
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