The Weekend Is Over, And The Markets Are Falling Again

BI ^ | 1-10-2016 | Sam Ro

[blam]

Sam Ro
January 10, 2016

World markets are open for Monday trading, and they're down.

US futures are in the red with Dow futures down 120 points and S&P 500 futures down 13 points.

Asian markets are also set to trade in the red.

All this follows last week's bloodletting, which saw the S&P 500 fall 6%. It was the worst first five trading days in history.

There's no shortage of explanations for all this:

* You have the Fed, which tightened monetary policy with an interest rate hike in December.
* You have oil prices, which are a struggling to find some sort of bottom.
* You have China, where we are witnessing a stock market breakdown amid slowing economic growth.
* And then you have geopolitical risks. Iran, Saudi Arabia, Syria, North Korea, and so on ...

You could argue at least some of the market sell-off is justified as the expectations for earnings have been coming down amid tumbling oil prices. Goldman Sachs, Deutsche Bank, and RBC Capital Markets have all warned their clients about this risk to earnings.

(snip)

[pieceofthepuzzle]

Disturbing that this market sell-off is occurring after the first of the year. I would have thought that people would have already sold under-performing stocks before New Years in order to get the 2015 tax offsets.

The world is at a very precarious point.

[entropy12]

[entropy12]

Under-performers were sold long ago. Now they are selling the over-performers, which they did not sell in 2015. Reason is capital gains will be due in April 2017 instead of April 2016.

[WENDLE]

If you have actual money in the crap market . GET IT OUT NOW. It will drop 30% to 70%!! The republicrats have let this debt go to the moon ( 21 trillion). IT IS OVER. GET OUT!!

[moovova]

Dow futures were down 140 two-three hours ago. Only down 50 right now.

[entropy12]

The US stock market has never NOT crashed (i.e. a 20% or more decline from peak – that would get you 1704 SPX from the 2130 #bubble high) when corporate profits go negative for 2 consecutive quarters, Hedgeye CEO Keith McCullough wrote earlier today in a note to clients.

https://app.hedgeye.com/insights/48465-here-s-why-the-us-stock-market-is-going-to-crash

[Jane Long]

Are they banking on Trump...for 2017?

[E. Pluribus Unum]

The chickens are coming home to roost.

Former Dallas Fed President Richard Fisher: “We Frontloaded a Tremendous Market Rally”

http://freerepublic.com/focus/f-bloggers/3382050/posts

[entropy12]

Can’t blame the republicrats for the market bubble.

It is strictly the FED keeping interest rates ARTIFICIALLY at zero for 7 long years. There is no place for money to go, except stocks market. My CD is earning 0.1% rate.

[Gen-X-Dad]

I think the old-fashioned mindset that Wall St. represents a “market” is long gone. High frequency traders are nothing more than sophisticated programs trying to out speed and out skim the other bot. The world economy has been propped up with trillions of dollars of debt to float these “markets”. They cannot continue doing that or the value of currency will go to zero. The minute the debt stream ceases from the world governments into the “markets”, the illusion and sentimentality we have about the free market will be exposed for what it is ... a massive automated front running machine that is out of debt fueled gas.

[entropy12]

There is no instant cure to save the market bubble.
It is a FED created bubble with their zero interest rate policy (ZIRP). They are out of bullets. And the US Treasury is bankrupt with $20 Trillion debt staring us in face.

[3D-JOY]

I have to agree...my estimate of the “bottom” would make people sick!

[mad_as_he$$]

I really like Keith. I think he has this cycle nailed. He went bearish months ago.

[rovenstinez]

Yeah, I have been watching this too. http://money.cnn.com/data/world_markets/asia/

Seems there won’t be any MONEY left for the Mr. Obama to brag about how well his economy is doing for his STATE OF THE UNION. Oh my Goodness. His empty chair is going to croak... And the Black Lives Matter Rep will not get a standing ovation. People are going to be focus on the loss of their investments... and maybe blame HIM.

[Jane Long]

I saw a newspaper headline, today, that said...Don’t Worry! This is not 2008!

(Um, no....probably worse.)

[entropy12]

Investors have been intoxicated with 7 years of buying the dips and making profits. So dead cat bounces will keep coming for several months, on the way down. Market never goes up or down in a straight line. They are unlikely to sober up until SPX dips to 1700 level.

[Leaning Right]

The public debt will eventually have to cause inflation, real inflation. I have read studies that say that Blue Chip dividend-paying stocks actually do OK in that environment, as they can raise product prices to keep pace with inflation.

But if the inflation gets out of control, all bets are, of course, off.

[entropy12]

LOL they always say this time it is different!

[entropy12]

Inflation of imported items is EXTREMELY unlikely. Manufacturing capacity in BRICS is way above any foreseable pickup in demand. Only such items as property taxes, water & electricity, medical services, legal services, which can not be imported from BRICS will see some inflation. Food items will also inflate because of growing middle class in BRICS, who can now afford better and more food.