Top News

Market Turbulence

The Dow opened down strong Friday after another bad afternoon on Thursday. All told, we’ve had an extremely turbulent week, and even most experts have no actual idea of where we’re headed over the near-term moving forward.

Meanwhile, we’re seeing the 10-year Treasury bond rate going as low as .72%. This is extremely under-reported news. We’ve seen minor yield curve inversions in the last year, but the way it’s happening right now indicates for real that a recession is looming for us.

I’m looking at two other things:

  1. The Fed balance sheet and what’s happening with the repo crisis re-run. Big banks that fund big loans aren’t feeling good right now what with the coronavirus and other risks, leaving the Fed in a rough spot. So, it’s had to step in full blast on the repos again and QE on top of that to bolster bank reserves. That’s a big plus for stocks near term despite the headwinds of coronavirus.
  1. The election and the winnowing field in the Democratic party. Over the last week, we’ve seen both Michael Bloomberg and Elizabeth Warren back out of the race. That leaves Joe Biden and Bernie Sanders. The election, in general, is totally up in the air, and it’ll be a long way to go before the dust settles and we see who will take on Trump.

So, a lot of shakeup in the financial space this week, and no clear indication of what’s going to get it back on level ground. I keep telling people: This is a true black swan. It could get really big, or it could peter out. No one has any clue what to expect here.

I’ll tell you what I think is most likely to happen in this week’s video. But when? That’s a tougher question: it could be weeks, or perhaps a few months.

As always, we’ll keep you updated.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Back to top button
Close
Close

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!