Posts by Adam Baratta

January 18, 2019 |

Fed Chief Jerome Powell Acknowledges Debt Problem

Next Recession

The U.S. is running massive deficits as the nation’s indebtedness continues to grow. Speaking at the Economic Club of Washington D.D., Fed Chairman Jerome Powell recently acknowledged the issue. In a piece by cnbc.com, Powell was quoted as saying “I’m very worried about it. From the Fed’s standpoint, we’re really looking at a business cycle length: that’s our frame of reference. The long-run fiscal, nonsustainability of the U.S. federal government isn’t really something that plays into the medium term that is relevant for our policy... Continue Reading

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January 14, 2019 |

The Message is Clear

Yesterday was a busy day for the Fed. Several central bank officials gave speeches throughout the day that were then followed by the release of the latest FOMC meeting minutes in the afternoon. Some of the speeches appeared to provide differing opinions on the economy and how the central bank should proceed. Chicago Fed President Charles Evans alluded to the Fed’s previous plans for another three rate hikes in 2019. Atlanta Fed President Raphael Bostic provided his take on the central bank’s plans going forward,... Continue Reading

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January 7, 2019 |

Uh Oh

Recent revelations from Apple showed that sales of its iPhone products were way slower in China than many had anticipated. The poor sales data along with reduced guidance from the company sent its stock down by nearly 10% on Thursday as the Dow Jones Industrial Average shed over 600 points. Bad news from Apple was not the only issue weighing down the markets, either. A recent string of manufacturing data has clearly shown a slowdown in activity. After the Apple announcement on Thursday, the latest... Continue Reading

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January 4, 2019 |

2019 to Pick up Where 2018 Left-off

George Washington

On the first trading day of the New Year, stocks are set to once again tumble at the open. Premarket trading points to around a 400-point decline for the Dow Jones Industrial Average right out of the gate while the tech-heavy Nasdaq is set to drop over 140 points. An ugly start to the new trading year to say the least. The selling is being fueled by many of the same factors that has fueled selling in recent weeks: The potential for a global economic... Continue Reading

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December 27, 2018 |

The Breakout Has Begun

without a deal

The stock market has seen a major volatility expansion in recent weeks as declines have mounted. The equity markets are currently grappling with numerous issues that could not only set the stage for the next bear market but could also send stocks decidedly lower in a short period of time. Some of the major catalysts for recent stock selling include the ongoing trade war with China, rising interest rates, geopolitical risks and a partial government shutdown. Investors may now be wondering, however, if they must... Continue Reading

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December 25, 2018 |

Markets Don’t Agree with the Fed

Another Recession

The Fed’s decision to hike rates again on Wednesday was met with displeasure from equity investors. Stocks saw sharp declines even as the Fed lowered its forecast for next year from three rate hikes to two. That displeasure was on full display on Thursday, as stocks once again got absolutely rocked. The tech-heavy Nasdaq was down 3% at the lows, putting it down over 20% from its August peak. Although the index recovered a bit, it still ended the session down just under 20% from... Continue Reading

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December 19, 2018 |

What if Stocks Declined by 50% or More?

blog

Recent stock market volatility and declines could be a taste of things to come. The market has been moving higher for a decade now on the back of ultra-low rates and easy money. That era is coming to an end, however, and stocks could be in for quite the shock as monetary policy tightens. The ultra-low rate policies of central banks have allowed corporations to invest, expand and hire. As the cost of capital increases, however, these wheels are likely to grind to a halt.... Continue Reading

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December 11, 2018 |

Don’t Wait

After rallying several hundred points off yesterday’s lows, stocks are once again under significant pressure today as worries over trade and numerous other issues take a toll on investor sentiment. As stocks continue to crumble right before investors’ eyes, the gold market is quietly pushing through previous resistance at the October highs and could be gearing up for a significant rally in the weeks and months ahead. There are numerous issues at play that could facilitate a sharp asset rotation in the months ahead, and... Continue Reading

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November 29, 2018 |

Is the Fed Starting to Backtrack?

FOMC

Rising interest rates have been the topic of considerable debate in recent months. The Fed has been sticking to its plan of gradual rate hikes while the benchmark 10-year note yield is solidly above the 3% level. Higher rates have not gone unnoticed, with everyone from President Donald Trump to Mad Money host Jim Cramer weighing in. Stock investors have also made their opinion clear, with recent declines and increasing volatility being largely blamed on higher rates. So far, the Fed has stuck to its... Continue Reading

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November 27, 2018 |

Trouble Brewing

The last several weeks have seen a very noticeable difference in risk appetite and market dynamics. Stocks have begun to show some significant signs of cracking as volatility has broken out to the upside. For stock investors, the last several weeks could simply be a small taste of more to come. Indeed, the market has covered a lot of ground over the last decade and could have a long way to fall if fundamentals continue to deteriorate. The next major potential catalyst for another leg... Continue Reading

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