Shah Gilani's Archive

Can we talk, about earnings? Let’s.

But, first, listen to what Randall W. Forsyth said to open his column titled Up and Down Wall Street this Saturday in Barron’s. He said, “The good news is the bad news can’t get worse.”

Sadly, it can. That includes earnings.

With more than 90% of S&P 500 companies reporting last week, quarterly earnings look like they’ll be down 13.8% from Q1 2019.

Maybe that’s why markets sold off last week.

The Dow lost 645.90 points on the week, closing down 2.7% at 23,685.42. The S&P 500 closed the week down 2.3%, its worst week since March 20. And the Nasdaq composite closed the week down 1.2%.

What’s interesting, in hindsight, which I’ll get to in a second, is that the Dow dropped 1,083.32 over the first three days of the week, closing Wednesday at 23,247.97, down 516.81, or 2.17% that day.

The hindsight here comes to us courtesy of Sunday’s 60 Minutes show. The big-deal guest interview yesterday was with Jerome Powell, Chairman of the Federal Reserve. Only, Jerome wasn’t on live yesterday. The show was taped from the Fed’s Washington D.C. headquarters on Wednesday, after the Dow dropped more than 1,000 points over the first three days of trading last week.

It’s not normal for the Fed chairman to grant an interview to 60 Minutes, especially in the middle of a crisis. Did the Chairman offer 60 Minutes the interview? Maybe. Because if markets were to continue getting hit Thursday and Friday, they’d be in bad shape come Monday morning, today, and a further route would be entirely possible.

So, why not tee-up an interview on Wednesday to hedge your bets come Monday.

To make money in the stock market investors need to know how bad the recession’s going to be and how the market’s going to react to economic conditions.

One surefire way to gauge what’s going on in the economy and gauge what the market thinks about economic prospects, as well as divine the market’s direction, is by watching bank stocks.

Banks are a bellwether for the economy and the market.

Here’s why banks are a good economic indicator, how to read them, and how to play them…

Last Friday, I gave you this warning: The mortgage market is once again in danger, only this time the damage is going to be a lot worse, last a lot longer, and impact the housing market and the economy in worse ways than the 2008 financial crisis did.

I laid out all the details and data in Friday’s article, which you can read here, but today, I want to get into it a little bit more. It’s going to be hard to hear, but it’s absolutely necessary, since it will affect your Total Wealth.

If you thought the worst of the financial crisis was way behind us, you’re about to get a rude awakening.

Mortgage Massacre 2.0 is right around the corner.

Here’s how “forbearance” and “rent strikes” are already impacting the mortgage market and how what’s barreling down on us is going to make 2020 look like 2008 all over again.

What a week equity investors had.

The Dow Jones Industrials rose a robust 2.56% last week. The S&P 500 rose a resounding 3.4%. And the never-not-leading Nasdaq Composite skyrocketed 6% higher.

That’s what I call getting it while you can, which is what I advised investors do last week.

While markets look crazy soaring every week, initial unemployment claims rise by an average of 4,100,000 per week; and benchmarks shot even higher last week as the Bureau of Labor Statistics reported 20.5 million jobs were lost in April and the nation’s unemployment rate leapt to 14.7% (wink, wink, BLS admitted it’s likely 5 percentage points higher, but seasonal and other haircutting, face-saving, adjustments wouldn’t let that headline fly), they may be right to pat themselves on the back.

That’s because the “V-shaped” recovery investors expect is self-fulfilling. I’m not talking about the economy’s recovery. I’m talking about the market’s recovery. It’s V-shaped, for sure

Call it confirmation bias.

As investors see more bad news, they see it getting closer to being the worst its going to get and that means we’re closer to turning around and that means buy, buy, buy. They see the economy opening as confirmation we’re on the other side of lockdowns, and stores and businesses opening as a reason to buy, buy, buy. Everything bad to do with the pandemic is behind us is what optimistic investors believe.

That’s confirmation bias in action.

That’s why the market’s experienced a V-shaped recovery.

More importantly, they say better than expected earnings keeps confirming their biases.

It’s all good. Until it isn’t

If you thought the worst of the financial crisis was way behind us, you’re about to get a rude awakening.

Mortgage Massacre 2.0 is right around the corner.

Here’s how “forbearance” and “rent strikes” are already impacting the mortgage market and how what’s barreling down on us is going to make 2020 look like 2008 all over again…

According to the Investment Company institute (ICI), year-to-date, investors have taken some $291 billion out of mutual funds and exchange traded funds.

But that’s not the whole story.

The ICI’s numbers represent net flows, meaning there were inflows, but they were dwarfed by outflows.

The story isn’t about net outflows, it’s about where the money went that flowed into the market.

Here’s where most of the money went and why you should follow it…

I’m going to let Janis Joplin tell you what to expect and what to do with equity markets this week and this month.

“Get it while you can.”

That title lyric was on Janis’ 1971 posthumous album Pearl, and it’s what investors need to remind themselves to do.

Because the dramatic bounce off the March lows has maybe a little more to go, at least for some stocks, before markets give up the ghost of depressions past and head back down to earth, maybe below, meaning towards the fiery place way under our feet.

But not all is lost, yet. Before the storm last week, which came Thursday and Friday, stocks were riding news that big tech earnings were hardly indicative of a depression on the horizon…

Shah here.

Keith started the story last week: he exposed the oil crisis and what was driving it, but the story has developed and as your new editor of Total Wealth, I am thrilled to continue the story.

To those who have been following Keith at Total Wealth for any amount of time: I promise I won’t let you down. I have worked very closely with him for twenty years, and our mottos are very similar. At the end of the day, we know there’s a way to make money – at all times – and we are dedicated to bringing those opportunities to you.

To those of you who have been following me for any amount of time: Thank you for your continued support! I look forward to continuing our journey together, bringing down the Wall Street fat cats and ringing out the stock market for every penny we can.

Starting with the oil crisis…

Despite the economy heading down a rabbit hole, stock markets are looking up, not down.

It doesn’t matter that it seems crazy, and it yet may be just that, but investors are betting the worst’s behind us, at least for markets, and the other side of all the panic and shutting down is here.

After all, countries are reopening. Businesses are reopening. And people just want to go out…

The novel coronavirus isn’t new anymore, it’s everywhere and disrupting how we live, work, and invest.

Major paradigm shifts are already underway. Here’s how life as we know it is changing.

Major paradigm shifts are already underway. Here’s how life as we know it is changing…