Transcript January 2016- Review of the Economy and Markets

Economics/Market Review
The Emerging Bear Market
Daryl Montgomery
January 26, 2016
Copyright 2016, All Rights Reserved
The contents of this presentation
are not intended as a
recommendation to buy or sell
any security and are for
educational purposes only
The New York Investing meetup is not affiliated
with the New York Life Insurance Co.
Stock Investors Panic
Central Bankers React to Selloff
US Roundup
• FED is in tightening mode.
• Fed prediction Q4 US GDP is 0.7%, Q3 was 2.0%
• US Jobs 292K in Dec; “Not in Labor Force” 94.1
million now v 79.3 million in Dec 2007
• US Retail Sales: DOWN 0.1% in Dec; flat since
Aug. Consumer spending is 70% of GDP.
• Manufacturing PMI Oct was 48.2 (50 break even)
• Industrial Production DOWN 0.4% (-0.6% in Nov)
• 2015 CPI up 0.7%, PPI down 1.0% on the year
Economic Summary
Fiscal State of U.S.- Mostly Unchanged
• National Debt: $18.9 trillion
State & Local Debt: $3.1 trillion
GDP: $18.2* trillion [calculation changed]
Debt/GDP Ratio: 104%* (121%* Fed+State)
• Unfunded Liabilities: $100* trillion
Total National Assets: $116 trillion
• Debt doesn’t include Federal Reserve, Fannie Mae +
Freddie Mac and FHA obligations
• Total US Debt: $ 64.3 trillion
• Student Loans: $1.3 trillion (600,000 defaults 2011/12)
• Federal Budget Deficit
-2015 $0.468/$0.483 trillion
• 2014 Trade Deficit $737 billion.
• Historically average interest rates would bankrupt U.S.
Presidential Election Summary
• Caucus in Iowa, Primaries in New Hampshire/South
Carolina before Feb meeting.
• Polls are somewhat unreliable.
• Dems: Bernie in Iowa/NH, Hillary in SC
• Reps: Iowa too close to call between Cruz/Trump;
NH results dependent on Iowa. Trump/Cruz in SC.
• Any candidate that wins all 3, is likely to get party
nomination; any candidate that loses all 3 is likely to
lose party nomination.
• SuperDuper Tuesday on March 1st should settle it.
Stocks, Commodities,
Currencies, Bonds
Market Summary
• US Stock market: moving averages aligning for bear
(65/40/10-week or 325/200/50-day).1st double-death
• Trouble started in China, just like last summer.
• Nasdaq still waiting for double-death cross.
• Oil took out 2008 low, futures as low as $26.55.
• Dollar and Yen trying to break out. Aussie closing
in on 2008 lows. Ruble hit all-time low.
• Junk bond debacle, could reach 2008 lows in months
• Commodities in long bottoming pattern.
• Cash is king.
Dow Industrials: 3 Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Dow Transportation: 3 Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
S&P500: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
Nasdaq: 3 Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Russell 2000: 3 Years Weekly
10,40,65-Week lyMoving Averages, RSI, DMI, MACD
US Dollar DXY: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
German DAX: 3 Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
Euro FXE: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
Swiss Franc FXF: 3 Years Weekly
10, 40, 65-Week Moving Averages, RSI, DMI, MACD
UK FTSE: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
Japan Nikkei: 3 Years Weekly
10, 40, 65-WeeklyMoving Averages, RSI, DMI, MACD
Japanese Yen: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
China Shanghai Composite: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
India SENSEX: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
Russia RSX: 10 Years Weekly
10, 40, 65-Week lyMoving Averages, RSI, DMI, MACD
Brazil BOVESPA: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
Natural Gas: 3 Years Weekly
10, 40, 65 Weekly Moving-Averages, RSI, DMI, MACD
Oil WTI: 3 Years Weekly
10, 40, 65 Weekly Moving Averages, RSI, DMI, MACD
Coffee JO: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
Australian Dollar FXA: 10 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
Gold ETF GLD: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
Silver ETF SLV: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
Copper JJC: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
High Yield (Junk) Bonds: 10 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
30-Year Treasury Yield: 10 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
10-Year Treasury Yield: 3 Years Weekly
10, 40, 65-Weekly Moving Averages, RSI, DMI, MACD
The End