The Biggest Decline In A Month For The Nasdaq Since 2008

The US stock markets closed higher today for the second consecutive day for the first time in the month of October and a lot of traders are probably happy that the month of October is over. Despite the back-to-back rally this is still the biggest decline in a month for the Nasdaq since 2008!

The Next Time The Fed Lowers Rates To Zero, The Dollar Will Collapse

President Trump claims that if he had zero percent interest rates the "strong" U.S. economy would be even stronger. He should be careful what he wishes for, as the next time the Fed lowers rates to zero, the dollar will collapse, taking the bond market and the economy down with it!

This Bear Market Is Not Going To End Quickly

Peter Schiff on Fox Business (Oct 29, 2018)

"The Federal Reserve should raise interest rates but the markets will collapse as a result. This bear market is not going to end quickly like the one in 1987. This will be a protracted bear market like the one we had from 1966 to 1982."

Nasdaq: Worst Monthly Decline Since The Financial Crisis

We still have three trading days left in the month of October and the Nasdaq is on pace to its worst monthly decline since the 2008 financial crisis and yet everybody thinks there's no problem!

Stock Market: The Downtrend Is Intact

Some of the highlights from the Peter Schiff Podcast, ep. 402.

Peter mentioned that the Russell 2000 Index is already in correction territory,

"The Russell 2000 is actually down about 14 percent from its highs so it's now officially in a correction."

Peter also mentioned that yesterday's rally had all the characteristics of a short covering rally and that the down trend in stocks in very likely still intact,

"To me this looked like a classic reversal Tuesday type of rally, one of the reversal Tuesday's where you gap way down and then just rally throughout the day The rally did not produce a positive close so it was not a technically significant rally. In fact, I think the downtrend is intact. To me, it looked like a lot of short-covering was going."

Financials are an example of weakness in the U.S. stock market,

"If you look at the financials for example all those stocks continued to go down closing in the red rallied off the lows but no substantial rallies."

The Box That The Federal Reserve Has Placed Itself In

That's exactly the choice that the Federal Reserve is going to have to make. Next time they're going to have to raise interest rates into a weak economy. 

In fact, they're gonna have to raise interest rates into a financial crisis, into a depression and if they don't do it we're gonna have something even worse, we're going to have hyperinflation. 

That is the box that unfortunately the Federal Reserve has placed itself in based on years and years of this monetary policy.

Stock Market: What's Happened Thus Far During The Month

Look at what's happened thus far during the month of October, which I had been warning on my podcast, looked like there could be a weak October given where we were in the market, given how ridiculous the sentiment was in the face of overwhelming evidence that the economy was in fact weakening.

If you look at the numbers the Dow Jones Industrials Average (DJIA) is down 3.8 percent so far on the month. That's the best performing of the averages. The S&P 500 Index is down about 4.7 percent on the month, the Nasdaq Composite is down 7.4 percent, the DJ Transports down 8.3 percent and the Russell 2000 shows a 9.2 percent decline.

September Existing Home Sales Plunged The Most In 2 Years

September existing home sales plunged the most in 2 years, extending the streak of consecutive monthly declines to six. Homebuilding stocks are hitting 52-week lows, registering their worst year since 2008. If housing is this bad during the boom, imagine what happens after the bust!

Bear Market Rallies Try To Create A False Sense Of Confidence

Corrections or bear markets have rallies. So, maybe this 500-point move up in the Dow Jones Industrials Average (DJIA) is the first upward correction in the new bear market. 

There's no way to say that we have not entered a bear market. It's possible that it will be a bear market, you can't call it a bear market now even though maybe 25% of the stocks are in bear market territory. The majority are not but it's only a question of time. There are a lot of stocks that are down quite a bit but just not enough to be a bear market. 

But remember some of the most spectacular moves that you're gonna see to the upside in a market happen in bear markets. Historically the biggest up days have been in bear markets and that is to try to create a false sense of confidence a false sense of hope.

A Bear Market And A Recession

More important that a bear market it's a recession. I mean this is a bubble not just in the stock market but in the entire economy! So, the Federal Reserve has distorted more than just markets and the problem is this recession is going to be far more painful and far deeper than the one that we had  in 2008/09 because it's also going to be accompanied by rising consumer prices. I think as Americans lose their jobs they're gonna see the cost of living going up rather dramatically and so this is going to make it particularly painful.

What Happens Next In 47 Words

1. Bear market;

2. Recession;

3. Deficits explode;

4. Return of ZIRP and QE;

5. Dollar tanks;

6. Gold soars;

7. CPI spikes;

8. Long-term rates rise;

9. Federal Reserve is forced to hike rates during recession

10. A financial crisis without stimulus or bailouts!

The Recession Is Obviously Coming

Recent article on Seeking Alpha.com: "Peter Schiff: The Recession Is Obviously Coming"

All Bear Markets Start Off As Corrections

“All bear markets start off as corrections. I think this one is probably a bear market. It’s long overdue. This is a bigger bubble than the one that blew up in 2008, and the crisis that is going to ensue is going to be far larger.” - in RT.com

It's Not Trump's Trade Policies That Are Going To Cause The Crash

It's not Trump's trade policies that are going to cause the crash, the crash was happening anyway. In fact Donald Trump gave a speech today and he said that when he was elected President or before he was elected the economy was on a verge of a collapse and he was right. But now it's on the verge of an even bigger collapse because all Donald Trump did was blow more air into Obama's bubble or more accurately the Federal Reserve's bubble.

Video: Rising Rates Crash Stocks

Peter Schiff was recently on RT.com to explain the recent turmoil in the U.S. stock market.

Video: Market Selloff (FOX Business)

Peter Schiff’s recent appearance on Fox Business to talk about the recent market turmoil: "Like all sequels, the next financial crisis will be worse." - Peter Schiff

The Price of Gold Finally Woke Up

"The real standout today in the market was gold right the price of gold finally woke up or traders woke up and noticed how cheap gold is and it rose by about $30 today back over 1220."

- Peter Schiff, Ep. 399: "Gold Breaks Out, Bitcoin Breaks Down" of the Peter Schiff Podcast

Stocks: A True Bear Market

"Everything is going down and so now I think the stealth bear market that started earlier in the year is now becoming a true bear market. Of course, nobody thinks so. Everybody that I'm listening to is talking that it's just a correction in a bull market."

- Peter Schiff, Ep. 399: "Gold Breaks Out, Bitcoin Breaks Down" of the Peter Schiff Podcast

Markets: Stocks & Bonds

"If we get stocks going up then interest rates are gonna go back up which is gonna scare the market."

- Peter Schiff, Ep. 399: "Gold Breaks Out, Bitcoin Breaks Down" of the Peter Schiff Podcast

It's Not A Normal Bull Market Correction

Everybody is talking about how this is just a normal correction in a normal bull market. Well, first of all there's nothing normal about this bull market, right? This bull market is already the longest bull market ever. So based on duration it ain't normal. Also based on all the stimulus that was required to create it, all the quantitative easing, the years of 0% interest rates, there is nothing normal about this bull market. If anything it's a bubble, it's not just a bull market and of course if it's not a normal bull market then why would it have a normal correction, right?

My Feeling About The Stock Market Was Confirmed

My feeling about the stock market was confirmed today with a 831 point drop in the Dow Jones Industrial Average down 3.15%. This is the biggest decline that the Dow has had since that 1000-plus point drop that we had in February. I think it's maybe the third biggest down day ever point-wise.

Week Stocks Beneath The Surface

If you look at some of the sectors that continue to get beat up making new 52 week lows so even though the headlines are probably gonna be about the Dow Jones Industrials Average (DJIA) making another all-time record high, beneath the surface are a lot of stocks that are having a lot of problems.

Italy Is Putting Pressure On The Euro Currency

The Italian market is under a lot of pressure because the Italian government is running deficits that exceed the two percent guidelines imposed by the Eurozone. I think they're proposed new budget deficit is 2.4 percent of Italian GDP and so this is putting pressure on Italy which is all so putting pressure on the euro currency.

We've Had Some Substantial Stock Market Declines In October

We have had some substantial stock market declines in October. Obviously, not every October has a big drop, in fact, most of the October's don't but some of the most notable declines have incurred in the month of October including the crash of 1987 and the crash of 1929. But given that our valuations are probably higher now than they were at those prior peaks you would think that there'd be more concern right now about the possibility of another October surprise in the way of a major decline in the stock market.

U.S. Economy: Soft Landing or Crash Landing?

It's not like the Fed is gonna finally see a small reaction to one rate hike that will enable them to quickly reverse course and engineer this soft landing that everybody likes to talk about. The minute there is a problem from the rate hikes it's gonna be a crash landing. There's going to be no opportunity to try to soft land this thing because as soon as it goes down it's going to come crashing down even if the Fed immediately goes from whatever they've raised rates to, to zero and launches another round of quantitative easing it's not going to be in time to stop the damage.

Federal Reserve: The Removal of the Word "Accommodative"

The only thing that was significant or potentially significant about this interest rate hike was the removal of the word accommodative by the Federal Reserve in their official statement to describe the current state of monetary conditions or monetary policy.

Now, I initially thought that was a significant removal of a word obviously the Federal Reserve thinks very carefully about the written statements and so if they chose to remove a word that was there and they know that people parsed through these words with a microscope and so the fact that the word was missing and obviously it's missing by intention it wasn't just an accident that they're trying to send a message and what I first thought the message was and I still believe that was the Federal Reserve views a two percent interest rate as neither accommodative or restrictive but maybe neutral. The Federal Reserve now believes that interest rates are high enough that they would no longer be described as accommodative.

Treasury Yields: The Chart Looks Ominous

Look at the bond market, yields on the 10-year and on the 30-year were up again today. We haven't completely broken down yet but to me the chart looks ominous I mean there is the potential for a big break in the bond market: drop in price, up in yield above 3.50% in the 10-year maybe above 4.00% in the 30-year in the short run.

Trump, The Stock Market, & The Mid-Term Elections

Donald Trump said that if the Democrats get voted, the stock market gonna get cut in half. So, that is a pretty bold statement to say that, "the stock market is worth twice as much with me as President as it would be worth if the Democrats got in power" now, I don't know if he was referring to the Democrats taking control of the White House in 2020 or taking control of the Congress later this year.

I mean maybe the President is pre-blaming a future sell-off in the stock market on the Democrats taking control of Congress. I wouldn't put it past him if we start to see the markets selling off later in the year and the Democrats do take control even if it's only the house and the market tanks I bet that the President will say, "You see, if the Republicans had retained control of Congress then the market would still be going up."

The Trade War Continues To Escalate

This trade war continues to escalate and people still think that we're going to win and they still believe that there is some type of method to the madness in that all of these tariffs are simply a down payment on a future where all the tariffs are gone right where the goal here is free trade it's just that in order to get to free trade we have to make trade less free first.

Europe Wants The Euro To Become The World's Reserve Currency

European Commission President Jean-Claude Juncker just this week said publicly that their plan, their hope is that the Euro becomes a reserve currency that rivals the US dollar because Europe is tired of being depended on the US Dollar. 

In fact, he specifically mentioned the fact that 90 plus percent of European payments for oil are made in dollars he says, "Why is this? Why are we buying oil from Russia and paying in US dollars? It makes no sense!" And so Europe wants to wean itself from dollar dependence.

Currency Markets: ECB is Hawkish, The Fed Is A Dove

The European Central Bank (ECB) is saying "we're gonna keep inflation under 2 percent no matter what" and so to me they're taking opposite positions: the ECB is tighter and the hawkish bank and the Federal Reserve is a dove and therefore the Euro currency (EUR) on that basis alone is going to be stronger than the US Dollar (USD).

How The Federal Reserve Is Thinking About Inflation Right Now

The Federal Reserve is saying that they're gonna err on letting inflation break out, that they are fine with symmetrical inflation around 2 percent.

Podcast: The Next Economic Hurricane Will Be a Category 5

Podcast: The next economic hurricane will be a category 5

Ford (F), General Motors (GM) Trading At 52-Week Lows

The auto industry is suffering. I mentioned just a minute ago about how many Americans have to borrow to buy cars and that's one of the reasons that both General Motors (GM) and Ford (F) are again hitting new 52 week lows. 

Ford (F) is trading close to  an eight or nine year low or something like that. But General Motors (GM) is again at a new 52-week low as both of these stocks are venturing further into bear market territory.

Crude Oil: $80/Barrel By The End Of The Year

Crude oil is getting more expensive again. The chart to me looks very, very strong. I still think we have a shot of 80 dollars a barrel crude before the end of the year and then north of a 80 dollars a barrel next year especially when the US Dollar rolls over. If you think about how strong crude oil prices are today with the US Dollar strong, imagine how much stronger oil prices will be tomorrow when the US Dollar is weak.

10-Year Treasury Yields Can Explode Higher At Any Time

Interest rates are going up, in fact the yield on the 10-year Treasury today was up I think 40 basis points to 2.98 percent. So, we're almost at 3 percent right now in the 10-year. The chart though to me looks like we can explode higher up to three and a half four percent almost any time.

The Last Time We Had A Trade Deficit This Big...

The last time we had a trade deficit this big was 2008 which of course was right before the financial crisis and Great Recession and it probably is no coincidence that were having such large trade deficits again probably on the eve of what will be an even greater economic recession than the one that we had in 2008.

The Bear Market Can Start At Any Minute

In a recent tweet, Peter Schiff drew a parallel between the current market and the tech bear market that started in 2000:

"The Nasdaq had the biggest gain last month since the year 2000. But do you recall what happened in 2000? The Nasdaq – it declined approximately 80 percent from peak to trough."

When asked when the bear market would start, peter Schiff replied:

"It’s long overdue. It can start at any minute … But people are oblivious.”

Related trading instruments: Nasdaq 100 Futures, Nasdaq 100 Index ETF (QQQ)

We Will Have Inflation And Recession At The Same Time

In a recent podcast, Peter Schiff warned us that we should be prepared for inflation and recession to his us in the face and at the same time.

Read the complete article here: https://www.zerohedge.com/news/2018-08-29/peter-schiff-we-will-have-inflation-and-recession-same-time

Markets: Currency Crisis

If countries with current account deficits are experiencing a currency crisis, how long before the nation with the world's largest current account deficit experiences one too? 

What's worse is that while other nations borrow to fund capital investment, the U.S. borrows to consume!

Are US Treasuries A Good Investment Right Now?

Peter Schiff recently asked this question on a SchiffGold column: "Are US Treasuries a good investment right now?"

Read Peter's detailed answer here: Peter Schiff: U.S. Treasuries Are A 'Lousy Deal'

Markets: New Highs, Fed Narrative

Video: The Hawkish Federal Reserve Narrative Is Slowly Changing

Topics:

- US stock markets trading at all-time highs;
- The Dow Jones Industrial Average (DJIA) is just shy of a new record high;
- The catalyst for the stock market rally: a changing Fed narrative;
- The Federal Reserve does not think that inflation will break out;
- Traders are starting to price in less tightening from the Federal Reserve;
- Pending Home Sales unexpected drop;

Powell Is Going To Let The Inflation Genie Out Of The Bottle

Peter Schiff explains the long term ramifications of the dovish speech by the Federal Reserve Chairman Jerome Powell:

Peter Schiff: The Fed Is Going To Let The Inflation Genie Out Of The Bottle

Hedge Funds Are Net Short Gold

The catalyst for the rise in gold and the decline in the US Dollar I believe was the dovish speech given by Jerome Powell in Jackson Hole. (...) Remember we've got a lot of people who are short gold. Now for the first time since 2001 the hedge funds are net short gold and I think they can get caught in a losing trade and have to scramble to buy back the gold that they sold.

A New Crisis Is Coming

We’re seeing a lot of warning signs people should be worried about, but again they’re dismissing them, much the way they did 10 years ago. You know, we’re getting close to the 10-year anniversary of the 2008 financial crisis. Remember, the whole thing started in August of 2008. Here we are August 2018, 10 years later. I think we’re heading for an even bigger crisis and the same people are even more clueless.

We Are Headed Into a Massive Recession

We are headed into a massive recession. Trump bought the economy some time with the tax cuts but all it's doing is pushing off the day of reckoning. - Peter Schiff on Fox Business

Trump Criticizes The Federal Reserve

He's been critical of the Federal Reserve for having raised rates. One of the things President Trump said apparently was that when he nominated Powell he had expected him to be a easier money guy. That he nominated him thinking that he wouldn't have all these interest rate hikes and so he's disappointed that his nominee is not being as easy when it comes to monetary policy as what he had hoped when he appointed him.

The Weak Dollar Policy

It should be obvious that Donald Trump has a weak dollar policy whether he wants to name it a weak dollar policy or not.

The Next Recession

It's not that the inversion of the yield curve causes the recession. It's that's that long rates start to fall as investors start to look beyond the expansion to the next recession and they start pricing in the next round of rate cuts.

So it's not that the inversion causes the recession it simply is a good indicator that a recession is coming so you don't need an inverted yield curve to get a recession and we're gonna have a recession this time without the yield curve inverting given how little headway the Federal Reserve was able to make in normalizing interest rates.

The Catalyst For The US Dollar Drop

The catalyst today for the US Dollar sharp reversal was more tweets from President Trump where he is expressing anger not only at the Federal Reserve right or not only at the ECB and at the Bank of China because he is accusing both Europe and China of being currency manipulators of taking advantage of us by weakening their currencies.

This was probably one of the biggest down days for the US Dollar this year - across the board weakness which is likely to continue. Believe me we're gonna have days that are gonna be much much weaker than this, I believe later in the year and of course next year and the year after that I think the dollar is gonna get particularly beaten up.