News Regulators 

2 notorious recession signals are descending into the danger zone, and they have some Wall Street strategists convinced that a meltdown is fast approaching

“The first widely-used recession indicator that SocGen is watching is the yield curve, or the difference between interest rates on the 2- and 10-year notes” writes Akin Oyedele for businessinsider.com. “History shows that, on average since 1960, after an inversion of the 2y/10y yield curve the S&P 500 returns 29% before it peaks.”. Yet, the firm contended that the yield curve may not be a reliable precursor of recession this time around. Source: businessinsider.com

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Why Housing Is a Leading Economic Indicator

“Sharp declines in housing starts have been a key indicator of each recession since 1960,” Bell said” writes Bruce Blythe For for thestreet.com. “In other words, a weak or strong housing market can have substantial influence on the direction of the overall economy,” Bell added.The total value of the U.S. housing market in 2018 was $33.3 trillion, up 6.2 percent from 2017, according to Zillow Group.The following factors and questions are worth watching: Released monthly by the U.S. Census Bureau, housing starts and building permits are among the most widely-followed…

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Japan November final leading indicator index 99.1 vs 99.3 prelim

“Slightly worse than expected readings than initial estimates and the downtrend will a be a bit concerning for Japanese officials as we start moving towards 2019 data” reports forexlive.com. As a reminder, the Japanese government is looking to implement a sales tax hike some time in October but if economic conditions take a turn for the worse then it may derail their plans to do so.The index is used as a reference to economic conditions, but most of the indicators used to make up the index has already been released…

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The world’s most closely watched China analyst explains the ‘5-second indicator’ that’ll tell you when the country’s financial crisis is over

“When we break down the flow of credit, we see that the collapse has occurred in shadow credit,” Chu said” writes Linette Lopez for businessinsider.com. “The most important thing that drives growth in China is credit,” she added.In even the best case scenario, China’s economy will continue to slow precipitously until the first quarter of next year, Autonomous Research analyst Charlene Chu told Business Insider in an interview. Source: businessinsider.com

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Markets News Stocks 

Buying into the market’s ‘First Five Days of January’ indicator is a mistake

“That compares to a gain of 6.6% in those years in which the Dow fell over the first five trading days of January” writes Mark Hulbert for marketwatch.com. The first five trading days of January 2018 were spectacular, with the Dow gaining 2.3%.That’s because this result points to the absence of any theoretical rationale for the First Five Days of January indicator.Consider all years since the Dow was created in 1896 in which it rose over the first five trading days of January. Source: marketwatch.com

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USD/CAD Forecast Dec. 31-Jan. 4 2019 – Slide continues for struggling Canadian dollar

“The Canadian dollar continues to stumble, as USD/CAD posted gains for a sixth straight week” writes Kenny Fisher for forexcrunch.com. This could mean more headwinds for the Canadian dollar as we enter 2019.Global trade tensions remain high and the Fed just raised rates, so the Canadian dollar is unlikely to end this nasty slide before the New Year.Global trade tensions remain high, and investors remain jittery, even with the announcement that U.S and Chinese trade teams will meet this week. Source: forexcrunch.com

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Bank of France November industry sentiment indicator 101 vs 103 expected

“Of note, the central bank sees French Q4 growth slowing to +0.2% from previously forecast of +0.4%” reports forexlive.com. That’s a bit of a blow as Q3 growth was +0.4%.Confidence is waning in the Eurozone economy but let’s see if hard data holds up in Q4 to help ease concerns faced by the ECB. As for France itself, the country has bigger problems to deal with as the protests and unrest continue to break out. Source: forexlive.com

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News Stocks 

BANK OF AMERICA: The ‘big low’ in stocks is still several months away — here’s what to do with your money in the meantime

“It’s a contrarian indicator, meaning it triggers a buy signal when it swings into “extreme bearish” territory” writes Akin Oyedele for businessinsider.com. Expectations for profits — the biggest driver of stock prices — are still nowhere near bearish, Hartnett said.The so-called trade truce was not the good news stock market investors were hoping for after weeks of relentless selling, according to Bank of America Merrill Lynch. Source: businessinsider.com

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Markets News Stocks 

This bear market signal is throwing stock investors off the scent

“Margin debt is the total amount investors borrow to purchase stocks, which historically has risen during bull markets and fallen during bear markets” writes Mark Hulbert for marketwatch.com. Plunging margin debt may not doom the bull market after all, reports to the contrary notwithstanding.Read: Bear market or just another correction?. In October, for example, the S&P 500 SPX, +1.55%  fell by 6.9% in October, and — sure enough — margin debt fell by almost as much (6.2%).To be sure, no one is arguing that the drop in margin debt is…

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