On the Markets: Stay Skeptical
Harry Dent | February 21, 2020 | Our eyes these days are on the Fed's balance sheet, and they'll continue to be, as we march forward through this repo and coronavirus crisis. What we're seeing is a slight easing back and now flattening on repos, but the Fed's still buying Treasury bills. That all combines to a mild positive for stocks, but it hasn't been enough to show the likely next big surge quite yet. Keep an eye on this space, however, and on next week's Boom & Bust. We'll be tracking the balance sheet every Friday after the updates come late on Thursdays. Short-term, everything's politics, politics, politics. The Democratic primary continues on, with Bernie Sanders now looking like the clear frontrunner and the most likely nominee to face down Trump. That's … not good for the banks or stocks, and the latter could be in for a serious correction if it starts to look like Bernie could take the election in November. I'm not exactly sold on that – Trump remains awfully formidable – but there are swing states beyond Wisconsin, Pennsylvania, Ohio, and Michigan, and a few of those states that usually go to Republicans (like Florida!) might be up for grabs in ways they haven't been in recent elections. But as I said, Trump remains formidable, and my understanding is that he's planning a round of tax cuts for the middle class sometime around September. I'd do it earlier if I was him, but either way, more cuts would be good news for the markets and the economy: incentives for everyday households to invest. Of course, they're investing in a bubble, but not everybody understands that like we do. My advice: Keep with the markets but be skeptical. There's simply too much going on right now that can change the course of where things are going. This is the final straight-up phase. For traders and short-term investors, there's good potential to buy on a likely near-term correction. We'll have more next week. 
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Harry Dent This Week in Economy & Markets... |
 | | Rodney Johnson | Feb 20, 2020 The federal deficit reached just over $1 trillion last year, is expected to top $1.3 trillion this year, and will likely be at least $1 trillion every year for the rest of the decade. And that's if everything goes right. Throw in a recession or unforeseen circumstance (cough, coronavirus, cough), and things could get worse. Which makes me wonder... READ MORE » |
|  | | Harry Dent | Feb 19, 2020 have been talking recently about how this final blow-off rally since the sharp 20%+ crash into late December 2018 is tracking very close to the one that occurred from late October 1998 into late March 2000. That correlation suggests that this rally could last into late May or so, at the height of the normal annual seasonal cycle that... READ MORE » |
|  | | Rodney Johnson | Feb 18, 2020 I received a dreaded audit letter from the IRS in 2015, covering the 2013 tax year. I contacted my CPA, gathered my documents, and made the trek to their office at the appointed time. After 90 minutes, the auditor determined I underpaid on my 2013 taxes by $37. He was wrong, but any net change of $200 or less is... READ MORE » |
|  | | Harry Dent | Feb 17, 2020 As I have been following, the big event in the past 4.5 months has been the Fed moving back to aggressive stimulus since the repo crisis. The printing of money to buy repos and T-bills reached a peak of $424 billion in late December and has moved sideways since and was at $418 billion last Thursday... READ MORE » |
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