If history is any guide, the Australian dollar is setting up for an explosive move… The last time it behaved this way was in 2008. Between October 2008 and July 2011, the Aussie-U.S. dollar pair rallied more than 82%. For the currency markets, this was a monstrous move. But after that top in July 2011, […]
Many bankruptcies have been forestalled by the huge stimulus and funding programs. But since May, 14 retail firms with liabilities of more than $500 million have sought court protection. And major U.S. banks seem quite sure that many more bankruptcies are on the way.
In the current environment, most technical indicators are heavily distorted. Accordingly, traders should keep overall risk profiles controlled. With a market this distorted, it’s important to exercise a lot of discipline and not put on full levels of risk.
The gap between the real economy and stocks grows ever wider and more dangerous. It is very expensive for companies to close, so being forced to do so repeatedly is crushing. As re-opening rollbacks accelerate across the U.S., four sectors in particular face big losses.
In states where COVID-19 infections are rising, we’ve already seen sharp declines in consumer and workplace activity over the past few weeks. At a minimum, we need to anticipate at least a flattening of activity in many other states. With that, the economy’s rebound will stall.
At some point, investors will have to rethink their strategy of buying stocks and other risky assets every single day. A major bump in the road to recovery will force a reassessment and repricing of assets.
The High Yield Junk Bond ETF (HYG) is flashing a warning signal, and it spells trouble for the stock market…