Browsed by
Category: Market

Why And How You Need To Think Hard About The Next Bear Market Now

Why And How You Need To Think Hard About The Next Bear Market Now

Most investors worry about the next market downturn and try to figure out when it will occur. But they don’t develop specific action plans. That’s a major oversight.

You need to plan now for the next downturn.

Back in March when the markets and economy plunged, many people didn’t have plans. Of course, few were expecting a bear market. That downturn was caused by the Covid-19 pandemic, not by changes in monetary or fiscal policy. Some reacted to all the scary headlines about the markets and the pandemic by selling stocks. Others spent a lot of time reviewing as much information as they could and agonized over what to do.

Fortunately for those who didn’t do anything, the markets rebounded quickly after the Federal Reserve opened the money spigots and Congress provided fiscal stimulus. Unfortunately for those who sold in the panic, the markets rebounded quickly.

It’s important to make a plan now for the next downturn. In particular, make plans for what you will do and won’t do under different circumstances. Emotions of the moment will influence your actions less if you develop a plan now. You’ll be less influenced by the talking heads, market noise, and doomsayers. Plus, you have the time to consider all the angles relatively dispassionately. The fact is, most market downturns catch investors by surprise. You need to think hard about a market decline when one doesn’t seem likely. The closer you are to retirement, the more important it is to develop a plan now.

Some people will decide they’re able to ride out any fall in their portfolios. They’ll rebalance their portfolios as stocks decline but not take other actions. Others will decide to reduce their stock exposure but only if markets decline by a certain amount or key economic or market

Read the rest
5 things to know before the stock market opens Wednesday

5 things to know before the stock market opens Wednesday

1. Futures higher after Wall Street ends four-session winning streak



a person standing in front of a building: People walk by the New York Stock Exchange (NYSE) in lower Manhattan on October 5, 2020 in New York City.


© Provided by CNBC
People walk by the New York Stock Exchange (NYSE) in lower Manhattan on October 5, 2020 in New York City.

U.S. stock futures pointed to a higher open Wednesday, one day after the first down session in the past five for the Dow Jones Industrial Average, S&P 500 and Nasdaq, as investors digest more bank earnings and keep watch for any coronavirus stimulus developments out of Washington. Gains on Wednesday would avoid back-to-back losses for the major stock benchmarks, something that has not happened in more than three weeks. Despite Tuesday’s slide, the October gains for the Dow, S&P 500 and Nasdaq are still larger than the losses they experienced in September.

Loading...

Load Error

2. Goldman beats on earnings while BofA and Wells Fargo disappoint

Dow-30 stock Goldman Sachs rose in Wednesday’s premarket trading after the Wall Street firm posted third-quarter earnings and revenue that best estimates. Per-share profit of $9.68 far exceeded analyst expectations of $5.57. Quarterly revenue came in at $10.78 billion.

Bank of America shares fell in the premarket after the lender posted third-quarter results that missed on revenue. The firm said it generated $20.45 billion in total revenue. Profit in the quarter slumped 16% to $4.9 billion, or 51 cents a share, edging out the 49 cent estimate.

Shares of Wells Fargo dropped in the premarket after the bank also reported disappointing earnings for the third quarter as low rates put pressure on net interest income. Wells Fargo earned 42 cents per share on better-than-expected Q3 revenue of $18.86 billion.

3. Walmart spreading out Black Friday sales



a person standing in front of a store: A shopper is seen wearing a mask while shopping at a Walmart store in Bradford, Pennsylvania, July 20, 2020.


© Provided by CNBC
A shopper is seen wearing a mask while shopping at a Walmart store in Bradford, Pennsylvania, July 20, 2020.

Walmart, a

Read the rest
Oil Dips Near $40 With IEA Warning of Fragile Market Outlook

Oil Dips Near $40 With IEA Warning of Fragile Market Outlook

(Bloomberg) — Oil slipped near $40 a barrel in New York as the IEA cautioned on a fragile outlook and Russia indicated OPEC+ may stick with its current plans to lift output.

The group’s plans to boost production in January will leave the market in a precarious balance, and potentially unable to handle higher supply from elsewhere or a drop in demand, the International Energy Agency said. Russia’s energy minister said his nation expects to be able to gradually raise production without harming the market.

Though prices edged lower, there were bright spots. A Chinese mega-refiner is snapping up barrels of Middle Eastern crude to feed trial runs of its expanded plant. At the same time India’s refiners have cranked up processing to meet higher demand during a festive period.



graphical user interface: WTI close to 50-, 100- and 200-day moving averages


© Bloomberg
WTI close to 50-, 100- and 200-day moving averages

A lot of traders’ attention is turning to plans by OPEC+ to raise supply next year in line with its agreement earlier this year. While some producers inside the group are said to be having doubts, the United Arab Emirates and now Russia have said that, for the time being, the group will proceed as scheduled. Saudi Arabian Crown Prince Mohammed Bin Salman and Russian President Vladimir Putin on Tuesday urged the alliance to comply with agreed cuts as virus infections rise again.

Loading...

Load Error

“OPEC+ could provide a silver bullet by not tapering cuts at the start of next year as planned,” said PVM Oil Associates analyst Stephen Brennock. “But such a proposition will be hard to swallow by some of the group’s members.”

Prices
West Texas Intermediate for November delivery fell 0.4% to $40.05 a barrel at 12:10 p.m. London timeBrent for December settlement lost 0.2%, to $42.38

Despite its cautionary outlook, the IEA said that the

Read the rest
Worried About a Stock Market Crash? Buy These Recession-Proof Tech Stocks

Worried About a Stock Market Crash? Buy These Recession-Proof Tech Stocks

Sure, the stock market is booming now, but remember that it was also booming in January of this year — right before the quickest market crash of all time. Meanwhile, Congress is at an impasse on a new stimulus deal, even though leading Federal Reserve officials are pleading for more fiscal help.

A sudden market turnaround isn’t out of the realm of possibility. You can prepare for it and reduce your risk by investing in recession-resistant businesses. Investing in recession-proof stocks lets you sleep well at night and hold for the long-term, no matter what craziness is going on in the real economy. While no stock is 100% immune to the real economy, some companies have better business models for dealing with downturns, even in the high-flying technology sector.

Some recession-resistant companies offer needed goods or services that must be bought in good times and bad. Others cater to a mass-market audience, providing a good or service at lower costs than competitors. That second type of stock may actually benefit during recessions by scooping up market share.

That’s why the following four recession-resistant tech stocks look like fine buys today, even if the stimulus lags and the economy double-dips.

A person leans back in a desk chair with their hands folded behind their head, staring out the window at a city skyline.

Image source: Getty Images.

Amazon

It’s Prime Day! That means deals, deals, deals on a wide variety of goods and services from Amazon (NASDAQ: AMZN), the dominant player in U.S. e-commerce. Amazon was the first mover in e-commerce. Today, its massive scale and distribution network allow it to offer unbeatable selection, prices, and one-day delivery, which the company rolled out last year.

Even in tough times, it’s really hard to give up your Amazon Prime membership, which counted more than 150 million members worldwide as of last year. Given the importance of Amazon’s services amid the pandemic, that number is

Read the rest
Lagarde Says ECB Needs to Question Market Neutrality on Climate

Lagarde Says ECB Needs to Question Market Neutrality on Climate

(Bloomberg) — The European Central Bank must question whether mirroring the composition of the bond market in its asset purchases is appropriate in light of climate risks, according to President Christine Lagarde.



a man riding a bicycle on the side of a road: A cyclist wearing a protective face mask passes the European Central Bank (ECB) headquarters in Frankfurt, Germany, on Wednesday, April 29, 2020. The ECB’s response to the coronavirus has calmed markets while setting it on a path that could test its commitment to the mission to keep prices stable.


© Bloomberg
A cyclist wearing a protective face mask passes the European Central Bank (ECB) headquarters in Frankfurt, Germany, on Wednesday, April 29, 2020. The ECB’s response to the coronavirus has calmed markets while setting it on a path that could test its commitment to the mission to keep prices stable.

Her argument centers on whether investors are correctly pricing bonds issued by polluting companies. With the European Union pushing an aggressive agenda to make the continent climate-neutral by the middle of the century, those assets might drop in value, posing a risk to the central-bank balance sheet.

Loading...

Load Error

The ECB is currently assessing how it conducts policy, looking at issues from inflation measurement to climate change. For years, it’s faced criticism that its stimulus is tilted toward supporting brown industries — because those companies have a strong record of issuing corporate bonds, and the ECB has insisted that its purchase programs must reflect what the market offers, without discriminating against certain industries.

Under the leadership of Lagarde, who took over last November, officials have been increasingly focused on the question of how monetary policy can be “greener.”

“In the face of what I call the market failures” we have to ask “whether market neutrality should be the actual principle that drives our monetary-policy portfolio management,” she said in an online speech on Wednesday. “I’m not passing judgment on the fact that it should no longer be so, but it warrants the question and this is something we are going to do as part of our strategy review.”

Lagarde also said that central bankers “will have to

Read the rest