{"id":630102,"date":"2018-02-05T16:00:13","date_gmt":"2018-02-05T16:00:13","guid":{"rendered":"http:\/\/juniorminingnews.com\/?p=630102"},"modified":"2018-02-05T16:00:13","modified_gmt":"2018-02-05T16:00:13","slug":"what-the-hell-is-wrong-with-this-market-2","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=630102","title":{"rendered":"What the Hell Is Wrong With This Market?"},"content":{"rendered":"

By Alexander Green<\/a><\/span> Last week’s stock market put a dent in my weekend.<\/p>\n

Not because the S&P 500 suffered its largest weekly drop in two years. And not because on Friday, the Dow sank 665.75 points, the biggest one-day drop since June 2016.<\/p>\n

(That’s all trivia from a long-term perspective.)<\/p>\n

No, it’s because everywhere I went \u2013 from a dinner party to the golf course to a Super Bowl get-together \u2013 friends kept peppering me with the same question.<\/p>\n

\u201cWhat the hell is wrong with the market?\u201d<\/p>\n

\u201cToo much good news,\u201d I told them.<\/p>\n

How I wish I could provide photos here of the looks I got. But here \u2013 in a nutshell \u2013 is what happened last week\u2026<\/p>\n

We found out that January was the 88th consecutive month of job creation, the longest streak of continuous hiring on record.<\/p>\n

This tightening labor market helped lead to the biggest annual increase in wages in eight years. Nationwide, average hourly earnings for all private sector workers in January were up 2.9%. (And the pickup in wages does not yet reflect the recent wave of announcements from companies that offered bonuses as a result of the new tax cuts.)<\/p>\n

The news created fear that inflation may be stronger than expected. As a result, the yield on the 10-year Treasury note hit 2.85% on Friday. (It was near 2% in September.)<\/p>\n

This caused investors to worry that the economy is so strong that the Federal Reserve may increase rates more aggressively than anticipated.<\/p>\n

Dampening that expectation, however, is the fact that oil prices fell and the dollar rose last week. And there are good reasons to believe that neither move is temporary.<\/p>\n

International investors shop currencies for yield the way CD investors shop banks for yield. U.S. rates are considerably higher than they are in Europe and Japan \u2013 and are almost certainly headed higher still. This will attract foreign investment capital and boost the dollar.<\/p>\n

U.S. shale producers spent the last three years tightening costs and improving their efficiencies so they could make money at lower prices. Now they are set to flood the market with oil again.<\/p>\n

[iu-adbox]<\/p>\n

In fact, they already are. In November, the U.S. Energy Information Administration announced that U.S. oil production exceeded 10 million barrels a day for the first time in nearly 50 years.<\/p>\n

This will help push oil prices lower.<\/p>\n

In short, last week’s market action \u2013 and Friday’s tumble in particular \u2013 was based on three factors:<\/p>\n

\tThe threat of higher inflation
\n \tThe possibility of more Fed hikes
\n \tThe longtime absence of a normal and healthy market shakeout.<\/p>\n

As this morning’s market action clearly demonstrates, there will be more quakes and tumbles in the days ahead.<\/p>\n

But let’s put all this in perspective:<\/p>\n

Is the longest hiring streak on record good news or bad?<\/p>\n

Is the biggest jump in wages in eight years good news or bad?<\/p>\n

Is economic growth so strong the Fed may have to raise rates sooner than expected good news or bad?<\/p>\n

Are the higher rates you’ll now earn on cash and bonds \u2013 including the reinvestment of mutual fund dividends \u2013 good news or bad?<\/p>\n

And \u2026read more<\/a> <\/p>\n

Source:: Investment You<\/a><\/p>\n

The post What the Hell Is Wrong With This Market?<\/a><\/a> appeared first on Junior Mining Analyst<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Alexander Green Last week’s stock market put a dent in my weekend. Not because the S&P 500 suffered its largest weekly drop in two years. And not because on Friday, the Dow sank 665.75 points, the biggest one-day drop since June 2016. (That’s all trivia from a long-term perspective.) No, it’s because everywhere I […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/630102"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=630102"}],"version-history":[{"count":0,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/630102\/revisions"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=630102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=630102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=630102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}