Wednesday, October 7, 2015

Confluence Point

If you ever been to an amusement park with its thrill rides, the joyride can best explain what I see in the market and our economy. The clearest example would be the roller coaster. The ride begins with the long ascension upward. This correlates to the economy and stock market after a downturn. The slow climb on the "wall of worry" as things get better with high anticipation. After a peak there is a sudden drop which relates to a market test of the lows. This happened in August 2011. The ride then goes through a series of quick turns, sharp bends as it slowly rises. You might even bounce up from your seat, but the wheels stay on the tracks as you zoom up, down, and all-around. You want this fun sensation to last, but alas, the bends are now more even, the speed decreases and then, the ride is over. If you take the ride numerous times as I have, I come to notice the confluence point. We have reached that same point in the market and our economy.
Shuttle Signs
What I mean by this is the market swings of triple digits, up and down with no clear direction. Back and forth the market goes, where it stops nobody knows. Market sectors like oil are down, but bio up, then, down again, but oil rebounds or seems too.The shills tell you to buy the dips, but few give insights like the importance of the bond market. Not here, dear reader, you get what I see a clear signs the market and our economy is turning - south.
If things were great and really improving the following could not be happening...
are heading to their highs with the ten year back to 2%. Economist, Shiller predicted the 30 year to hit 2%. The Fed talks rate hikes, but action speaks louder than words. Money printing never stops. The
like clockwork have lowered their global economic forecast every quarter since the last quarter of 2014. Now, they say world growth will only be 3.1% and like I've said every quarter, they're wrong again as it will be lower.
Job Cuts

The labor bureau stated that this is the 30th straight week of job claims below 300,000, however we all know that they fudge numbers. I have questioned their numbers repeatedly since according to the  Challenger Job-Cut Report, there have been over 100,000 announced job cuts in the last two months. Yes, the announcement can be for a future date, but at this present moment consider the magnitude of the announcements.
*Conagra 1,500.
*Walmart 500.
*HPQ 32,000.
*Microsoft 7,800.
*Schlumberger 11,000.
*Qualcomm 4,500.
*Target(Canada) 17,000.
*A & P 8,500.
*RadioShack 5,424.
*Baker Hughes 7,000.
AMD 5% of its global workforce.
Bebe Stores 2% of its workforce
Caterpillar, Chesapeake, Bank of America, Goldman and many, many more.
Sometimes companies like to use code words for their actions. They will announce that they are restructuring the company and they will cut costs. Cutting costs is a code word that always includes job cuts. GM plans to cut costs of $5.5 billion. Dunkin Donuts says it will close 100 stores. That is a lot of lost revenue and jobs for our economy.
All of the above happen when the ride is almost over. As B.B. King sang, "The thrill is gone..."