Hello traders everywhere! Adam Hewison here, President of INO.com and Co-creator of MarketClub, with your mid-day market update for Friday, the 5th of April.
Confidence Is a Fragile Entity
Confidence in sports, business and almost everything else in life is a very important element. The same can be said for confidence in the markets and in the economy. Today with the release of the non-farm payroll, confidence was badly shaken. The question becomes, with everyone who has a 401K program and who has made money in the last few years, will there be a rush to get out of the market with their profits?
After seeing the disappointing results of the non-farm payrolls report this morning, is Chairman Bernanke and the Fed going to keep their uncharted risky policy of pumping money into the system? With all of these uncertainties floating around in investors' heads today, I believe confidence is on the wane for any sustainable economic recovery that Washington was hoping for.
Non-Farm Payroll Shocker
See what I said on CNBC Asia last night.
Unemployment Benefits Jump To a Four Month High
If the economy is so good, why do we see unemployment benefits going up? I believe that the economy is weaker than the government wants to admit. Unemployment over 7%, in my opinion, is the new norm as we move into an informational/IT/robotics economy where fewer workers are needed to run businesses, factories, warehouses and general operations.
Watch Today's Video Update Here
Japan Just Gave Us a License To Print Money
Thanks to the Bank of Japan (BoJ) and new governor, Haruhiko Kuroda, his policy to re-inflate the economy gave us the road map on how to print money for the next year or two. The new BoJ governor, Haruhiko Kuroda, said he will do whatever it takes to achieve the new inflation target in two years. That means Japan and their central bank are going to push down the value of the Yen so their exports will become more attractive in the world markets.
Most Markets Are Ending The Week On a Sour Note, Here's One That Didn't
Yesterday evening on CNBC Asia, I talked about the USD/JPY cross. This is one market that is closing out the week on strong note, in favor of the US dollar. We continue to remain bullish on this currency pair. We will be looking at this currency pair today using our Trade Triangle technology.
No Government In Italy Yet
Like a lot of people in this world I love pasta, however it would appear as though Italy would rather eat pasta than form a government. After holding their general elections six weeks ago, Italy is still without a government. Why is that important you may ask? Well, Italy just happens to be the third most indebted country in the world and a central player in the Euro, where it represents the third largest economy in the Eurozone. I cannot imagine Italy embracing and accepting the austerity measures that are going to be placed on it in the future. I further expect we will see the Eurozone adopt the American and now Japanese model of quantitative easing (printing money) to get their economy out of the doldrums. I believe that this will be a dangerous path for the Eurozone to follow.
3 Markets On The Move:
DS UNIPHASE (JDSU)
CISCO SYSTEMS (CSCO)
US DOLLAR/JAPANESE YEN (USDJPY)
North Korea, a Festering Sore On The World
North Korea and Kim Jong Un, their 29 year old leader, did not say anything overnight. That's the good news, the bad news is it did not change the festering sore that they have infected on the world.
Watch Today's Video Update Here
Potential Chaos Ahead
May 19th – Debt ceiling suspension expire
Europe - slow evaporation - economic risk
North Korea - unknown risk evaluation
The FED - finally throws in the towel
Have a great trading day,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Adam appears frequently on the following financial news channels as a guest expert. Click on any cable logo to watch Adam's latest appearance.
Dear Everyone,
There's a stock market crash occurring. I'm in Bonds. I hope I can jump at the right time. Well--Iran, Iraq and North Korea (not necessarily in that order) had to go. Or, will go soon. Where have I heard that before? We're in the middle of WW III (yep, another ten years to go), and there is only one down, and two to go. The market is going down. This is the follow up recession that we have to have. This one will have some house cleaning with it, and some people will go to jail. Here's my simple plan. Stay with Bonds till I find a bottom, then shift to cash for 2-3 weeks while the stock market finds a bottom. Then, go all in to the blue chips as they shoot back up. Just like last time. Don't forget that 2-3 week lag.
Something to think about, Cherubim
We used to have so much going for us. Now we are doing everything wrong and expecting the same result. Our products are too expensive because of unions running up the price of production. It is very difficult to mine anything anymore because of the environmentalists. We as a people vote only for what a candidate can do for us rather than what he can do for the country. Our politicians are selling us short term goals by spending us into oblivion. Our educated classes are comiting self-genocide while the lower classes are producing kids like rabbits. And all we worry about are petty issues like gay marriage which does not change the way anyone acts anyway.
Adam... you were maaavelous on the Interview with CNBC Asia. You stressed the conservative look! RE: The world stock market... I guess I don't hold the fear (yet) that you do. It's my experience that moderate worry is good... moderate worry meaning that good earning stats and economic fundamental stats are still pretty good (growing) and it's the 'this can't last forever because of..." that's causing the worry. If the market truly "tells us", then it's still looks higher (begrudgingly, yes, in the last few trading days). Climbing the 'wall of worry' is still the course of action for me. Keep up the good work, Adam!
Norman
Anyone who thinks there is a TRUE economic recovery underway needs an emergency brain scan. There are trillions of gallons of FED-pumped sewage sloshing around the Economy and the Financial System from sector to sector, distorting everything that used to be true. If The FED were to shut down the pumps today, the Economy, the Financial System and The Great Wall Street Casino would collapse within a week.
So you mean the economy is on life support!I agree! The best MD's are getting the lifeblood of it.Stay put and follow the trail of the MD's if you want to survive.