Rates on the 10-year Treasury have plunged 4.5% since late October, while interest rates on shorter-dated bonds have held steady or increased. This has caused the yield curve to flatten like a pancake, typically a precursor to a recession.  Economic growth in the United States reached 3% last quarter and strong global growth doesn’t seem to point to an end of the eight-year recovery, but there is one sector that has been punished on the drop in rates. Yields on the 10-year have fallen to within 0.69% of the yield on the two-year note, the narrowest since 2007. That narrowing… Read More

Rates on the 10-year Treasury have plunged 4.5% since late October, while interest rates on shorter-dated bonds have held steady or increased. This has caused the yield curve to flatten like a pancake, typically a precursor to a recession.  Economic growth in the United States reached 3% last quarter and strong global growth doesn’t seem to point to an end of the eight-year recovery, but there is one sector that has been punished on the drop in rates. Yields on the 10-year have fallen to within 0.69% of the yield on the two-year note, the narrowest since 2007. That narrowing of rates between short- and long-term bonds is wreaking havoc on a sector that was supposed to be one of the biggest beneficiaries to economic growth and the trend to deregulation this year. There are several catalysts pointing to a potential reversal in the trend to lower long-term rates, meaning that this sector could bounce coming into the new year. #-ad_banner-#​The Trend In Long-Term Rates Could Reverse Quickly Shares of banks and other financials have been hammered on the drop in long-term rates, with the Financial Select Sector SPDR (NYSE: XLF) tumbling 2.7% over the last three weeks against… Read More

The S&P 500 is up 2.7% in the month since the close of the third quarter, and has boomed 15% so far this year. That upside strength, especially as companies report their third-quarter results, is hiding a growing deviation in the market.  Behind the optimism for tax cuts and economic growth, this trend has grown from investor fears of stock valuations. And while the overall market trend to higher prices makes for shaky investments in what could ultimately end badly, this new trend is actually creating an opportunity to invest in solid companies with catalysts for upside growth. I’ve been… Read More

The S&P 500 is up 2.7% in the month since the close of the third quarter, and has boomed 15% so far this year. That upside strength, especially as companies report their third-quarter results, is hiding a growing deviation in the market.  Behind the optimism for tax cuts and economic growth, this trend has grown from investor fears of stock valuations. And while the overall market trend to higher prices makes for shaky investments in what could ultimately end badly, this new trend is actually creating an opportunity to invest in solid companies with catalysts for upside growth. I’ve been mining the market to pick winners out of the third quarter’s losers — and they could be some of the best investments I make all year. #-ad_banner-#​Complacent Investors Are Too Quick To Punish As of November 3, 81% of companies in the S&P 500 have reported third quarter earnings. Two-thirds (66%) have reported positive sales surprises and three-quarters (74%) have reported positive earnings surprises on a blended growth rate of 5.9% over the same quarter last year. That market strength fades quickly if you strip away some of the best-performing sectors. Exclude the energy sector and year-over-year earnings growth… Read More

In 2013, a speaker at an economic summit made a rather remarkable statement. The speaker, a high-ranking government economist, said that if the United States didn’t get its spending under control, the government risked a debt-to-gross domestic product (GDP) ratio in excess of 100% by 2024. The statement immediately drew chuckles from the attendees, most of whom were non-government economists. Of course, most economists knew the government would bypass the 100% level years sooner than predicted. In fact, at $20.4 trillion, the national debt is now 105% of GDP — just four years after the infamous statement. Worse, the ratio… Read More

In 2013, a speaker at an economic summit made a rather remarkable statement. The speaker, a high-ranking government economist, said that if the United States didn’t get its spending under control, the government risked a debt-to-gross domestic product (GDP) ratio in excess of 100% by 2024. The statement immediately drew chuckles from the attendees, most of whom were non-government economists. Of course, most economists knew the government would bypass the 100% level years sooner than predicted. In fact, at $20.4 trillion, the national debt is now 105% of GDP — just four years after the infamous statement. Worse, the ratio will accelerate from here. You see, much of the budget sequestration caps enacted in 2011 have been abandoned. As such, the only true limit to the national debt is now a fiscally conservative Congress, which is an oxymoron if ever there was one.  The Republican-controlled Congress is no more likely to limit spending than Democrats. In fact, the only difference between the parties is the names of the beneficiaries of taxpayer dollars. Democrats like to reward the poverty industry while the Republicans reward the military-industrial complex. But make no mistake: Neither party seems to acknowledge the cliff to which we… Read More

The exchanging of real dollars is becoming less and less common, as are the merits of doing so. Our digital, credit-fueled society has little room for the slow, paper currency of old.  Even the tried and true transactions of the cash economy (i.e. small businesses and person-to-person exchanges for goods) are becoming better served by digital transactions, which are quicker and safer (both in personal safety and fraud). —Sponsored Link— Terrified CEOs Set To Spend $1 Trillion Imagine, an industry more profitable than the entire global illegal drug trade. An industry so disruptive it is… Read More

The exchanging of real dollars is becoming less and less common, as are the merits of doing so. Our digital, credit-fueled society has little room for the slow, paper currency of old.  Even the tried and true transactions of the cash economy (i.e. small businesses and person-to-person exchanges for goods) are becoming better served by digital transactions, which are quicker and safer (both in personal safety and fraud). —Sponsored Link— Terrified CEOs Set To Spend $1 Trillion Imagine, an industry more profitable than the entire global illegal drug trade. An industry so disruptive it is projected to wipe out $6 trillion worth of value per year. One IBM calls “the greatest threat” to every company in the world today. It’s real. It’s here. It’s a war the biggest companies in the world are LOSING. Until now, because one tiny company has stepped out of the U.S. Intelligence & Defense world with a unique solution. Read the full report here. What was a “niche” industry not too long ago has already become a $600 billion global powerhouse. Experts predict that number to balloon to $3 trillion by 2023 — and many estimates… Read More

Recently, I published a piece on an otherwise healthy market sector that has been left out of the current rally for no particular reason. In identifying this, I stumbled onto a great brand name that’s trading at a bargain. In addition to owning a high-quality stock, investors can also participate in the extended U.S. economic recovery as well as the larger theme of the growing middle class in emerging markets. The company is literally a household name: major appliance manufacturer Whirlpool (NYSE: WHR). While the stock is poised to, hopefully, finish the year in the black, the price… Read More

Recently, I published a piece on an otherwise healthy market sector that has been left out of the current rally for no particular reason. In identifying this, I stumbled onto a great brand name that’s trading at a bargain. In addition to owning a high-quality stock, investors can also participate in the extended U.S. economic recovery as well as the larger theme of the growing middle class in emerging markets. The company is literally a household name: major appliance manufacturer Whirlpool (NYSE: WHR). While the stock is poised to, hopefully, finish the year in the black, the price action has definitely been through the spin cycle, with shares underperforming the broader market. The main culprit is back-to-back quarterly earnings per share (EPS) disappointments.  The company delivered quarterly results that missed the consensus estimates by an average of 3.25% for the second and third quarters of 2017. The result was an 18.5% haircut from the stock’s 52 week high. #-ad_banner-#But despite the herd’s typical reaction, Whirlpool’s future is hardly bleak. Here’s why… It’s All About Foreign Markets Just 48% of Whirlpool’s revenue comes from the United States. This means more than half of the company’s sales come from… Read More

What makes more sense, gold or bitcoin? Just a few short years ago, this question would have elicited howls of laughter from 99% of investors.  Bitcoin adherents were ridiculed by nearly everyone for even being involved with the product. Gold bugs are still exclaiming, “How dare someone even compare a faddish digital currency, not even a decade old, to thousands of years of gold’s history?”. Even today, in the midst of what is one of the most fantastic bull runs of all time in any investment, bitcoin and the other cryptocurrencies are nowhere near mainstream acceptance. Many investors doubt bitcoin’s… Read More

What makes more sense, gold or bitcoin? Just a few short years ago, this question would have elicited howls of laughter from 99% of investors.  Bitcoin adherents were ridiculed by nearly everyone for even being involved with the product. Gold bugs are still exclaiming, “How dare someone even compare a faddish digital currency, not even a decade old, to thousands of years of gold’s history?”. Even today, in the midst of what is one of the most fantastic bull runs of all time in any investment, bitcoin and the other cryptocurrencies are nowhere near mainstream acceptance. Many investors doubt bitcoin’s worth, even wondering if it has any true value at all.  Despite the massive gains, when compared to gold, bitcoin is a mere blip on the timeline of history. But it’s this widespread doubt and fear that make bitcoin superior to gold as an investment.  #-ad_banner-#The public never gets fully involved with novel, world-changing technologies until after the first explosive move higher. Smart investors are quietly amassing bitcoin and the other blockchain-based assets during what I see as the early stage of a massive bull run.  I do not doubt that digital currencies and their blockchain backbone are the future… Read More