TREND ALERT: Stock Market bounce or Market blip?

Posted 4/13/16


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TREND ALERT: Stock Market bounce or Market blip?



Stock Market bounce or Market blip?

KINGSTON, NY, 13 April 2016—Happy days are here again. After suffering through the worst start of a New Year in the history of the US equity markets and a month of plummeting currencies and crashing commodities ... according to the word on the Street, the worst is over and the best is yet to come.

Listen to paid-for-hire presstitutes and special interest pundits on the corporate business media selling "buying opportunities" and the "fundamentals of the economy are sound" hype.

Ignore the fact that the World Bank warned Monday the economic slowdown ripping through China will hit other economies in East Asia hard until 2018. Write off their warnings that "Developing East Asia and Pacific faces elevated risks, including weaker-than-expected recovery in high-income economies and a faster-than expected slowdown in China." 

"Faster-than expected"? Not to Trends Journal subscribers. We've detailed the massive Chinese debt load that expanded from $500 billion 20 years ago to $30 trillion today, its 70 million vacant new apartments in ghost cities, massive manufacturing overcapacity, etc., and what it means.

Listen to shills who pay no heed to the International Monetary Fund's warning last week that "The impact of shocks to China's fundamentals on global financial markets is expected to grow stronger and wider over time," and that "spillovers" from China's economic shocks will increase in coming years and hit global markets.

Ignore IMF warnings that negative/zero interest rate policies that generated massive piles of government/corporate debt and inflated emerging and developed markets will likely result in a wave of defaults when the US Federal Reserve finally raises interest rates: "A flight from riskier asset classes could spark disruptive declines in asset prices and currency values, generating contagion effects and harming growth further," the IMF reported.

Listen to the Wall Street hacks that work for hedge funds, banks, brokerages, private equity groups and the gaggle of Washington mouth pieces screaming "buying opportunities." Ignore  the IMF's dramatic slashing of global growth on Tuesday. Projecting world economic growth at just 3.1 percent, it's the IMF's fourth straight downward revision in a year.

Yes, the good news from the States that helped push equity markets higher on Tuesday was the report from the National Federation of Independent Business that small business confidence fell to 92.6 last month ... the lowest level since 2014 and well off its 42-year average of 98.

And, as for the fundamentals of the economy being sound? It's hype that counts not projections for an 8- to 9-percent decline in profits from S&P companies in the first quarter, nor the Atlanta Fed estimates for first-quarter Gross Domestic Product in the United States to slump ahead at 0.4 percent. 

Trend Forecast: Is this a market bounce or a blip? Richard Fisher, former president of the Federal Reserve Bank of Dallas, recently said: "We injected cocaine and heroin into the system" to juice the markets during the financial crisis and "now we are maintaining it with Ritalin." Thus, markets addicted to central bank fixes may stay high, but will crash hard when the drugs stop flowing.


©MMXVI The Trends Research Institute®