Price of Copper probably a bullish Development for the Stock market
Many pundits associate higher copper prices with inflation. This is the wrong metric to look at; higher copper prices are usually associated with an improving economy.
Copper has traded past a key resistance point ($3.00) and it has managed to close above this important level on a monthly basis. The long term outlook for copper is now bullish and will remain so as long as it does not close below 2.80 on a monthly basis. Copper is facing resistance in the 3.20-3.25 ranges and as it is now trading in the extremely overbought ranges. As copper is now trading in the extremely overbought ranges, it is more likely to let out some steam before trading past this zone. A healthy consolidation will provide copper with the force necessary to challenge the 3.20 ranges and trade as high as $3.80 with a possible overshoot to $4.00, provided it does not close below $2.80 on a monthly basis.
Now that copper has traded past $3.00 on a monthly basis, the Fed deserves another pat on the back for they have managed to further cement the illusion that this economic recovery is real. Copper is seen as a barometer for economic growth, so pulling off a Houdini here is probably going propel a lot of former naysayers to embrace this economic recovery.
Mass Sentiment is still Negative so Stock Market likely to Correct only
Combining this data with the action in the Copper markets leads us to believe that the stock market is more likely to experience a correction than an outright crash. Higher copper prices are usually indicative of higher stock market prices. Therefore, the copper markets are confirming that the long term trend is still intact.
What about the Inflation issue?
The chart below puts an end to that argument for now. If inflation were an issue, the velocity of M2 money stock would be trending upwards. Until it starts to trend upwards, inflation is not an issue and the focus should be on higher stock market prices.
Conclusion
Don’t focus on the noise; focus on the trend as it’s your friend and everything else is your foe.
Stock market corrections or stock market crashes: The Dow would have to drop below 9000 to break below the main uptrend line; an unlikely event in the near future. However, this does not mean it’s impossible. Every once in awhile the markets experience a monumental crash that can shave of as much as 60% of the Markets current value. In this is instance we are using weekly charts; each bar on the chart represents one week’s worth of data. Straight off the bat, you can see that back breaking corrections translate into long term buying opportunities. Remember when there is blood in the streets and the masses are in panic mode, the opportunity is knocking.
Market Crashes are Buying Opportunities
The first zone comes into play at 16,000. If the Dow closes below this level on a monthly basis then there is a chance it could trade as low as 13,000. However, based on the current market sentiment, there is very little likelihood of such a scenario coming to pass. Mass Psychology is very clear when it comes to dealing with stock market crashes. Market crash on a note of Euphoria and bottom on a note of despair. Mass psychology states that optimum time to get into the markets is when the masses are in panic mode.
A fortress of support comes into play at the 13,000-13,500 ranges
To trade any lower than this level, the Dow would need to close below the above ranges on a quarterly basis. If it were to do that then the main uptrend line could be tested. Note that this trend will continue to trending upwards, so in 12 months, the trend line could move from the 9000 ranges to the 10,000 plus ranges.
Buy the Fear Sell the Joy
The individuals who arrive at the party late are the first ones to come out and mistake a correction for a crash.The crowd panics when it sees blood in the streets; instead of joining the crowd do something different take advantage of stock market crashes and buy as the crowd dumps quality stocks and flees for the exits.
Crash or correction boils down to the angle of observance
What is stunning to one, could appear ugly to another; it comes down to the angle of observance. Alter the angle and the image changes. Mass media and most experts try to alter the angle and direct you to see what they want you to see. They are in the fear “Selling Business” because fear sells, so they focus on creating a mountain out of a mole hill.
History clearly indicates that the Astute investors build very large stakes when there is blood in the streets. Moreover, they keep building these positions as long as the main driving force is fear. Take a look at the current Bull market; the Dow is trading at 22,000 and the masses are still nervous. It’s history in the making. The masses are always on the wrong side of the markets in the long run.
The astute investor always views financial disasters through a bullish lens. Instead of panicking they take advantage of stock market crashes.
Normality highly values its normal man. It educates children to lose themselves and to become absurd, and thus to be normal. Normal men have killed perhaps100, 000 of their fellow normal men in the last fifty years.
R. D. Laing 1927-1989, British Psychiatrist
Stock Market Outlook: As stated in the stock market update, its buddies would do anything it took to make the belief that shorting the market is a recipe for failure. The idea, as we mentioned, is and was, to induce every Tom, Dick and Harry to adopt this bull. One just has to consider Monday’s actions to determine just how much they are willing to move thus, whatever crap they pump out from the information, that pullback will solve itself since the Fed and its allies will come out to drive money to the markets or directly intervene by encouraging the system.
As detailed at FAQs that are upgraded and also a term sheet, the SMCCF will buy bonds to make a bond portfolio that’s based on a broad market indicator of US bonds. This indicator consists of the bonds in the market which were issued by US firms that satisfy other standards of adulthood, along with the facility score. This indexing strategy will match the current buys of funds for the facility.
The Markets were yanking on Monday, and the Fed comes out and leaves viola and that statement. They aren’t even allowing the Dow to examine the 23K ranges. In the long run, these bears will wind up turning to bulls, and that is going to mark the conclusion of the cycle, which is accompanied with a crash, which may indicate the baby bull’s arrival. US Stock-index stocks were higher Tuesday afternoon, aiming to add to the rally of the day that President Donald Trump has been currently financing a $1 trillion infrastructure spending bundle to include more stimulus to help the economy recover from the pandemic.
We said that an infrastructure bundle would be published since the COVID pandemic has granted the ability to the Fed and the authorities. Watch the creativity here. Produce an issue and offer whilst creating the pay to offer a solution. Look they’ll create more if needed and how many trillions of dollars they’ve created over the last 7 weeks. Notice something else; lots of Folks are shedding their tasks or will. As we mentioned the most expensive element in any company is the element that is human. If you’re able to eliminate high paying jobs and continue to boost efficacy with
machines.
The effect is deflationary regardless of the inflation by generating bucks generated. The Future Of Function: It begins with distant working. They’re pushing an increasing number of individuals to work at home. What happens next? Then why would they be in the USA In the event employees working at home do too the task? See another point: they will begin talking about outsourcing those tasks or notify Americans that they must work for work or less out of a different nation for less. And this will happen on a worldwide basis. All in all, the benefactor from this activity will be parts of South America, parts of Eastern Europe and Asia.
We will expand this further. Therefore, while America will continue to flourish employees irrespective of the ranking they hold and will probably be a place, won’t fire well. At the
In the era of AI, also the self-employed which have and the businessman. There are exceptions, and yet another approach is to be certain to stay ahead of the learning curve; Quite simply, you are great at your work. The alternative when you’ve got a job that is fantastic would be to learn more about the idea of becoming an independent contractor; if this approach is executed 35, occasionally, the advantages can be immense.
As the money supply will continue increasing for the near future, we’re currently reaching the point at which it makes no way to concentrate on stock market crashes. For, in reality, it is a stock market crash in the event that you bought in at the top, however, it shouldn’t be regarded as a wreck but because the buying opportunity when a person began opening positions throughout the crash.
Monday’s action was confirmation that we will need to change tactics. We talked of
the in the previous two upgrades, and we’re likely to this new approach. Monday’s activity appears to affirm that it’s a waste of time to concentrate on any cycle’s crash facet.
Each stock market crash contributes to the arrival of a brand new bull market. This was the very first big-scale also the time a bull and crisis was killed before its own
time. Along with the wreck was over before it gained any traction. This action informs
intensity won’t last long and the majority of the bears will probably be captured with
Their pants were the situation with all the crash that is a coronavirus.
What do others think about stock market outlook and the future of the work?
Stock Market Outlook: 3 Volatile Weeks, Then Pure Excitement
The stock market is about to evolve – from guesstimate volatility to fundamental trend building. But, first, it needs to close out this quarter’s final trading days and pass through the third quarter’s startup time until it reaches…
… the morning of July 14, when DJIA lead-off JPMorgan Chase JPM -2.7% reports second quarter results, and CEO Jamie Dimon makes good on his 3-month-old promise to reveal the bank’s new strategy and outlook.
Will his comments be positive, negative or a combination? Who knows? However, what we do know is that the information will be valuable and will be based on facts, insight and wisdom. And that means investor excitement because actual business fundamentals and reasoning are reentering the stock market discussion.
Gone will be the dependence on invented “breaking news” and simplistic “analyses” based on linking trader-driven stock market moves to any coincidental tidbits lying around.
What about the elephant in the room: Covid-19?
Oh, it’ll still be with us. However, its overwhelming uncertainties in early April have greatly diminished. Today, most government, institutional and business leaders know what needs to be done, both to function effectively and to contain, if not reduce, the risk of contagion. Read more
JPMorgan’s market guru says stocks can hit new records this summer
Stocks’ price-earnings ratios remain at historic highs, but their value compared to bonds suggests a market booster could be on the horizon, Marko Kolanovic, head of macro quantitative and derivatives research at JPMorgan, said Wednesday.
Central banks’ relief programs prompted an exodus from equities and flooded the bond market with investor cash.
Yet quantitative funds’ trading algorithms are on the verge of triggering a return to the stock market as volatility eases, Kolanovic wrote in a note.
For such firms to reach their median equity exposure, they’d need to add $400 billion to the stock market. A move like that would serve as a shot-in-the-arm for stock valuations and “easily push the broad market to new highs,” the analyst added.
The market is also slated for a mass rotation from growth names to value stocks once investors reprice for weaker-than-expected coronavirus fallout, the bank said.
Visit the Business Insider homepage for more stories.
Stocks sit at historically expensive levels but not in the way that matters most, JPMorgan said Wednesday.
Price-earnings ratios remain elevated, but prices relative to bonds are the signals to watch for future market moves, Marko Kolanovic, head of macro quantitative and derivatives research at the bank, wrote in a note to clients. Stocks are currently “quite cheap” by that measure, and the dislocation is directly tied to a decline in bond yields, he added. Read more
Where the Stock Market Will Be in Six Months
When it comes to the future of the stock market, investors’ predictions are all over the map.
When asked where the S&P 500 Index would end the year, a fifth of respondents to a survey conducted by DataTrek Research said the benchmark will close out 2020 up more than 10% from current levels. That’s roughly the same number who predicted the index will finish down more than 10%.
“Every option from ‘really bad’ (down +10% from here) to ‘really good’ (+10%) got basically the same number of votes,” Nicholas Colas, DataTrek’s co-founder, wrote in an email. “And we’re only talking about the next six months.”
Such dispersion is perhaps understandable after the stock market’s fastest-ever fall into a bear market gave way to the quickest 50-day rally in nine decades. While investors are hopeful for a quick economic recovery from the coronavirus pandemic, the outlook is foggy as cases continue to rise and new risks emerge. Investors also have a wary eye on November’s U.S. presidential election and the potential for volatility around that time.
According to the survey — which attracted 341 responses from June 22 through June 28 — 48% said they expect Joe Biden to win the presidency, compared to 43% who foresee a Donald Trump victory. According to Colas, political expectations weighed heavily on investors’ general market views.
“Respondents who said they believed Trump would win were twice as likely to think U.S. equities would rally by double digits into the year-end,” Colas wrote. Read more
Dow Transports Service Dow 30K Prediction?
Are trading to let some steam out. Then the Dow is very likely to undergo a pullback according to the Tactical Investor’s Dow Theory if the pullback is powerful. From the market update, 9300 to 9600 ranges’ goals were to the Dow moves. The programs (as displayed in the preceding graph ) are very likely to check the 802 into 819 ranges using a potential overshoot into the 765 into 774 ranges.
Right off the bat, we’re likely to say that we’re in favour of a much correction unless the trend varies since it will produce a purchasing chance. The chart of this transports illustrates they are currently at a zone of immunity; since the transfers are trading at the ranges around the graphs shown below, this immunity will be overcome. The transfers will need to shut on monthly basis above 11250. If they can attain this, support will be turned into by then immunity. A breakout may push this indicator up to 1800 to 2400 points greater from the zone.
Ranges the breakout effort by the Dow transfers is very likely to fail. The reverse is going to transpire, although this will convince everybody that the transport sector is currently going to breakdown. If the trade is transported by the Dow the likelihood of a transfer to the 9300 to 9600 will spike. If it comes to pass traders may load up on stocks in the transport sector.
The total trend is upward, and when a business is despised, it is most likely the time to
set up positions. The setup would call the Dow will follow in its footsteps and in doing so produce an excellent prospect to experience a pullback. Until the trend varies, an individual needs to ignore the impulse to fear if the market’s pullback strongly. The proposed course of action is to split out a jar of your favourite drink (alcoholic or non-alcoholic) and observe. According short-term traders can observe the 801 costs will be indicated by a violation of the zone.
Our future views on Dow Jones Transportation Average
When the utility pullback the Dow Industrials and Transports are very likely to take the exact same route and in doing so this will produce a purchasing chance that is lovely for 2020. Opinion has inched up the following 2 points and it’s nearly. Readings are well below their average of 39. Overall market sentiment is currently signalling a solid pullback needs to be seen as a chance when it comes to pass. The
Dow is trading over 28k, and the sentiment is still trading under its historic average. Simply speaking, we could conclude that year’s market activity will capture 90 per cent of specialists with their trousers down. Of the experts, even people who obtained the first portion of the bull market, are currently wearing their feelings on their sleeves. Can we understand? All one must do is pay attention? In case you’ve got a prejudice (be it governmental or politics ), your vision is clouded and consequently your own analysis.
Some readers have asked us do not brief the markets; our attention is on the long-term trend. We could guarantee that it is not Once it appears like it’s simple to assess the direction of this trend. We do not wish to be in doing so miss out on both ends and in a place where we’re stuck considering two tendencies in two different time frames. We are reminded by this of this narrative of the donkey that maintained searching for a more tasty haystack; of starvation, the fool died ultimately.
Thus, while the trend is upward, we’ll concentrate on the transactions that are extended and vice versa. Notice the market upgrade is a tool which may be employed to satisfy your requirements; hence in the event that you have time and are comfy with the market, you might do so. The very best method to decrease the risk variable when shorting the market would be to use put options; you know upfront how much you can lose.
In short, there’s absolutely no reason to fear, and when this sale continues at
this speed it will cause a monstrous purchasing occasion and this is the kicker, those who panicked will overlook it, for after fear sets in; it’s quite tough to distinguish between chance and catastrophe. Think back to 2008, also look at missed the ship since the
premise was that the markets may go lower.
Now given the intensity of the present sell-off, the markets will likely mount a rally, the very first effort usually fails, and when the history is to be reliable then when this rally fizzles out, it ought to result in another downward tide, which could take the market to fresh highs on an intraday basis.
If the pattern is sufficiently powerful, we can issue a term open the place up or put play. That is where you place with different strike rates and opens both a phone. Do not neglect to maintain a trading diary; if blood is flowing on the roads, the very time is.
What do others think about Dow Jones Transportation Average?
The Dow Jones Transportation Average (DJTA), sometimes simply known as the “Dow Transports” is a price-weighted average of 20 transportation stocks traded in the United States. The Dow Jones Transportation Average is the oldest U.S. stock index, first compiled in 1884 by Charles Dow, co-founder of Dow Jones & Company.
The index initially consisted of nine railroad companies and only two companies from outside the railroad industry. That is a testament to the dominance of railroads in the U.S. transportation sector in the late 19th and early 20th centuries. In addition to railroads, the index now includes airlines, trucking, marine transportation, delivery services, and logistics companies.
Key Takeaways
The Dow Jones Transportation Average (DJTA) is a price-weighted average of 20 transportation stocks traded in the United States.
In addition to railroads, the index now includes airlines, trucking, marine transportation, delivery services, and logistics companies.
The Dow Jones Transportation Average is closely watched to confirm the state of the U.S. economy, especially by proponents of Dow Theory.
Changes in the DJTA are rare, and they usually only happen following a corporate acquisition or other dramatic shifts in a component’s core business.
Understanding the Dow Jones Transportation Average
Transportation is much less important to the overall stock market than it was when the DJTA was first created. However, transportation stocks can follow a different pattern than the rest of the market. Sometimes, they can help traders and investors to predict changes in the market. Read more
Why DOW Transportation Average Is Actually Pretty Good When It Comes to Stocks
The average is an everyday word. We use it without even thinking about it. We want to know the average temperature, our favourite player’s batting average, the average home price in a neighbourhood.
That got us thinking about the average stock. It is, after all, the Dow Jones Industrial Average. And it is helpful to know what Wall Street thinks average is. That way, investors can discern when Wall Street loves or hates, a stock.
The most average stocks Barron’s could identify in the S&P 500 and the Dow are FedEx and JPMorgan Chase, respectively. We had picked FedEx (ticker: FDX) as a Buy recommendation in 2019 and JPMorgan (JPM) was featured on a 2019 cover story.
But what does average mean for a stock?
For starters, the average market capitalization in the S&P 500 is about $60 billion, but the median market cap is $23 billion. The S&P is a little top-heavy. On average, 21 analysts cover an S&P stock. The average Buy-rating ratio—which is Buy recommendations divided by total recommendations—for stocks in the S&P is about 53%. The average Sell-rating ratio is about 7%. Analysts are far more likely to rate stocks they don’t recommend as Hold instead of Sell. And the average analyst price target for an S&P stock implies a gain of about 6%. Read more
Will Dow Transports Trip This Bull Market?
The bull market’s fate now rests on just 20 stocks.
I am referring to the 20 stocks that make up the Dow Jones Transportation Average. At least according to some interpretations of the venerable Dow Theory — the oldest stock market timing system that is in widespread use today –, the bull market will not be considered alive and well until this average rises above its previous all-time high.
And that’s asking a lot since the Dow Transports are 12% below that level.
Why would Dow Theorists believe that the fate of the market rests in the hands of just 20 stocks? Therein lies a long story that I told three weeks ago and will not repeat here. But, in a nutshell, Dow Theorists focus on the behaviour of both the Dow Transports and its better-known sister average, the Dow Jones Industrial Average. Bull markets are considered alive and well when both of these averages are jointly hitting new highs.
Three weeks ago these averages had their work cut out for them since both were far below their April highs. But it turns that just the Dow Industrials were up to the challenge; while last week they rose to a new intra-day record, the Dow Transports remain far behind.
If anything, in fact, they are getting even further behind. On Monday of this week, when the Dow Industrials rose slightly, the Dow Transports dropped another 155 points or 1.5%.
The Volatile Relationship Between Fiat Currency and Societal Stability
The intersection of fiat money and social unrest is a complex and often volatile relationship that has shaped economies and societies throughout history. Fiat currency, money that is not backed by a physical commodity but rather by the faith and credit of the issuing government, has been both a stabilizing force and a catalyst for upheaval. This essay will explore the multifaceted connections between fiat money systems and social instability, drawing on insights from mass psychology, technical analysis, and cognitive biases to paint a comprehensive picture of this critical economic and social phenomenon.
The Psychology of Fiat Money: Trust and Perception
At its core, the value of fiat money is rooted in collective belief and trust. As Warren Buffett once remarked, “The U.S. dollar has lost 90% of its purchasing power since 1950, and it will continue to lose value. That’s why I always say that the best investment you can make is in yourself.” This observation highlights a fundamental psychological aspect of fiat currency – its value is largely perceptual and subject to the whims of mass psychology.
When confidence in a fiat currency erodes, it can trigger a cascade of social and economic consequences. The famous investor George Soros, known for his theory of reflexivity, might argue that there is a feedback loop between the perceived value of money and its actual value. As people lose faith in a currency, they may rush to convert it into more tangible assets, further weakening its value and potentially sparking social unrest.
Technical Analysis: Charting the Course of Currency Crises
Technical analysis, typically associated with stock market trends, can also offer insights into the relationship between fiat money and social instability. Legendary trader Jesse Livermore, who made and lost several fortunes in his lifetime, emphasized the importance of understanding market psychology and trends. In the context of fiat money, technical analysis of exchange rates, inflation metrics, and other economic indicators can provide early warnings of potential currency crises that may lead to social unrest.
For example, the hyperinflation in Zimbabwe in the late 2000s was preceded by clear technical signals of currency devaluation and economic instability. These signals, if heeded, could have allowed for preemptive measures to mitigate the social upheaval that followed.
Cognitive Biases: The Irrational Element in Monetary Perception
Cognitive biases play a significant role in how individuals and societies perceive and interact with fiat money. Charlie Munger, Warren Buffett’s long-time partner, has spoken extensively about the impact of psychological biases on decision-making. In the context of fiat money, several biases come into play:
1. Normalcy bias: The tendency to believe that things will always function the way they normally have. This can lead to a false sense of security in the stability of a fiat currency, even in the face of mounting evidence to the contrary.
2. Availability heuristic: People tend to overestimate the likelihood of events they can easily recall. In countries with a history of hyperinflation or currency crises, this bias can lead to heightened anxiety about the stability of fiat money, potentially triggering preemptive actions that can exacerbate social unrest.
3. Loss aversion: The tendency to prefer avoiding losses over acquiring equivalent gains. In times of economic uncertainty, this bias can drive people to make irrational decisions with their money, potentially contributing to bank runs or other destabilizing behaviours.
Historical Examples: Lessons from the Past
The relationship between fiat money and social unrest is not merely theoretical; history provides numerous examples of how currency instability can lead to societal upheaval. One of the most dramatic examples is the hyperinflation in the Weimar Republic in the 1920s. As the German mark lost value at an astronomical rate, social order broke down, ultimately contributing to the rise of extremist political movements.
More recently, the collapse of the Venezuelan bolivar has led to widespread social unrest and economic chaos. As Ray Dalio, founder of Bridgewater Associates, noted, “The collapse of a currency is a very difficult thing to recover from, and it almost always leads to significant social and political upheaval.” The Venezuelan case study illustrates how the loss of faith in fiat money can rapidly erode social stability and lead to profound societal changes.
The Role of Central Banks: Balancing Act
Central banks play a crucial role in maintaining the stability of fiat currencies and, by extension, social order. John Bogle, founder of Vanguard Group, often emphasized the importance of sound monetary policy in maintaining economic stability. However, the actions of central banks can also contribute to social unrest if perceived as favouring certain groups over others.
For instance, quantitative easing policies implemented after the 2008 financial crisis were credited with stabilizing economies but also criticized for exacerbating wealth inequality. This tension highlights the delicate balance central banks must strike in managing fiat currencies to promote both economic stability and social cohesion.
Alternative Perspectives: Cryptocurrencies and the Future of Money
As concerns about the stability of fiat currencies persist, alternative forms of money, particularly cryptocurrencies, have gained traction. While not directly related to social unrest, the rise of cryptocurrencies reflects a growing distrust in traditional fiat systems. As Paul Tudor Jones II, a prominent hedge fund manager, stated, “Bitcoin reminds me of gold when I first got into the business in 1976.”
The emergence of decentralized digital currencies represents a potential paradigm shift in how societies think about and interact with money. While it’s too early to predict the long-term implications, the cryptocurrency phenomenon underscores the ongoing evolution of monetary systems and their relationship to social stability.
Global Implications: Interconnected Economies
In an increasingly globalized world, the stability of fiat currencies has far-reaching implications beyond national borders. As John Templeton, the legendary global investor, often noted, “The only way to avoid mistakes is to gain perspective.” This perspective is crucial when considering the potential for currency crises to spark contagion effects across interconnected economies.
The Asian Financial Crisis of 1997 is a prime example of how currency instability in one country can quickly spread to others, leading to widespread economic disruption and social unrest across an entire region. This interconnectedness underscores the importance of international cooperation in maintaining the stability of the global financial system.
The Role of Education and Financial Literacy
Addressing the potential for social unrest stemming from fiat money instability requires more than just sound monetary policy. As Benjamin Graham, the father of value investing, emphasized, “The investor’s chief problem – and even his worst enemy – is likely to be himself.” This observation highlights the critical role of financial education and literacy in mitigating the risks associated with fiat currency systems.
By improving public understanding of monetary policy, inflation, and the nature of fiat currency, societies can build resilience against the psychological factors that often contribute to currency-related social unrest. As Peter Lynch, the renowned mutual fund manager, often said, “Know what you own, and know why you own it.” This principle applies not just to individual investments but to a society’s relationship with its currency.
Technological Disruption and Monetary Systems
The rapid pace of technological change is reshaping the landscape of fiat money and its relationship to social stability. Jim Simons, the mathematician and hedge fund manager known for his quantitative approach to investing, has long recognized the power of technology to transform financial markets. In the context of fiat money, emerging technologies like blockchain and artificial intelligence are creating new possibilities for currency management and oversight.
These technological advancements have the potential to enhance the stability and transparency of fiat currency systems, potentially reducing the risk of social unrest stemming from monetary instability. However, they also introduce new complexities and potential vulnerabilities that must be carefully managed.
The Importance of Adaptability in Monetary Policy
As Carl Icahn, the activist investor, once said, “You learn in this business that if you want a friend, get a dog.” This cynical view underscores the importance of adaptability and resilience in the face of changing economic conditions. For central banks and policymakers, the ability to adapt monetary policy quickly and effectively is crucial in maintaining the stability of fiat currencies and preventing social unrest.
The COVID-19 pandemic provided a stark example of the need for flexible monetary policy in times of crisis. The rapid implementation of unprecedented stimulus measures by central banks around the world helped stave off potential economic collapse and social upheaval. However, the long-term consequences of these actions remain to be seen, highlighting the ongoing challenges of managing fiat currency systems in an uncertain world.
Conclusion: Navigating the Complex Relationship
The relationship between fiat money and social unrest is a complex and evolving phenomenon that requires ongoing attention and analysis. As David Tepper, the hedge fund manager known for his contrarian views, often says, “The key to success is to be willing to change your mind.” This flexibility of thought is essential in navigating the challenges posed by fiat currency systems and their potential impact on social stability.
By drawing on insights from mass psychology, technical analysis, and an understanding of cognitive biases, policymakers and citizens alike can work to build more resilient monetary systems and societies. As William O’Neil, founder of Investor’s Business Daily, reminds us, “The whole secret to winning in the stock market is to lose the least amount possible when you’re not right.” This principle of risk management applies equally to the broader challenge of maintaining social stability in a world of fiat currencies.
Ultimately, the key to mitigating the risks of social unrest stemming from fiat money instability lies in fostering transparency, education, and adaptability. By promoting a deeper understanding of monetary systems and their societal impacts, we can work towards a future where fiat currencies serve as a source of stability rather than a catalyst for upheaval.
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The US central bank has pumped more than $200bn (£160bn) into the banking system this week – the first time there’s been such an intervention since 2008.
Interest rates in the so-called “repo market” had shot up to 10% in some cases – although the cost of borrowing in that market more typically hovers around the benchmark rate set by the Fed – around 2%.
So what happened, and should we worry?
First things first: what’s the repo market?
Banks, hedge funds and other players borrow money regularly on a short-term basis to ensure their books are in order, no matter what their daily activities.
The borrowers typically offer government bonds or other high-quality assets as collateral, which they repurchase, plus interest, when they repay the loan – often the next day.
Those repurchase agreements give the repo market its name.
What happened this week?
This is a huge market, with some $3tn changing hands each day, according to the US Office of Financial Research.
Under normal conditions, interest rates in the repo market are low, since the loans are considered safe and there’s plenty of cash on hand.
But this week the cost of borrowing shot up – toward 10% in some cases. And the rate at which banks lend to each other – the Fed’s benchmark – exceeded 2.25%, the top of its desired range. Full Story
Climate strike: What US children are sacrificing for the cause
Young people poured onto the streets of cities across the world on Friday to try to force political leaders to act over climate change.
But they aren’t just leaving it to the politicians – in New York City, activists explained what they were doing in their own lives to help. Full Story
Walmart ceases e-cigarette sales
Walmart has said it will no longer sell e-cigarettes in the US, amid mounting calls to ban the products entirely.
The retailer said its decision was due to “uncertainty” about the rules governing e-cigarettes, which US health authorities have linked to more than 500 cases of lung injury.
US President Donald Trump last week said the US would prohibit sales of all flavoured e-cigarettes. Full Story
Justin Trudeau: Canada PM seeks to put blackface scandal behind him
Flanked by cabinet ministers, he said his party would ban military-style assault rifles if they win next month.
His campaign went into damage control on Wednesday night following the publication of a photo of Mr Trudeau wearing brownface at a costume gala. Full Story
We’re Likely to cover topics stock market buying opportunity and Coronavirus. Over the past 24 months, we began to talk about the idea of news that was weaponised, and we said that the media could continue to push at the envelope. The method by which is a very clear sign that this tendency of information is collecting momentum. Roughly eight businesses in America control 90 percent of their media; so much power from the hands of few.
All these corporations would be the gatekeepers in order that they could guide the masses to look at any problem from the angle that they deem would be the most fitting. It’s simple to generate a fantastic situation seem bad if you are able to change the angle of observation, and that’s what the current networking is best accommodated for. They aren’t in the news industry anymore. Journalism was substituted with remarks and gossip; the story can be quickly controlled by those jackals. The antidote is easy; cease paying attention for it’s no news, remarks are being depicted as facts. An individual will be better of asking a part of Ward 12 for its upgrade to listening to the majority of the journalists of today.
Second, we guess this coronavirus report is used to make a massive stock buying opportunity for those wealthy. Polarise the audience, because of their attention will be led on the occasion, and you may do whatever you need, and they will not listen to what is occurring directly. Just do this unfold? The Federal Reserve will lower prices and provide more alluring money with this market. The wealthy, unlike the Joe, can borrow countless next to nothing and toss this cash to the market.
This huge sell-off will gradually result in a much more powerful melt-up, as cash in the sidelines will pour to the markets; we discussed this problem previously, but we’ll pay it again in future upgrades. Because the audience is panic is setting throwing out the baby with the bathwater as even resources such as Gold took a beating. The masses are uncertain as ever, and no bull market has ended within this stage; as soon as the masses are leaping with joy, it finishes.
Come out and also the companies that market these vaccines will rake in billions in gain and his grandma race to acquire vaccinated, although so much the fatality rate is low. Talking of a vaccine scientists claim they are just a Couple of Weeks away from producing just one for the vaccine’s power was demonstrated in trials completed in the Institute. Our fundamental idea was to create the technologies and not especially a process where materials are brought to mobile by enclosing the substance together with the cell tissue, forming a vesicle containing the material.
That the vaccination induces elevated levels of certain antibodies that were anti-IBV, Katz said. Let us call it pure, however after scientists sequenced the DNA of this book coronavirus causing the present global outbreak, the MIGAL researchers analyzed it and discovered that the poultry coronavirus has high genetic similarity to the individual one, which it utilizes exactly the exact same disease mechanism, which raises the odds of achieving a successful human embryo in a really brief time period, Katz said.”
We all will need to do is correct the machine to the new arrangement,” he said.
We’re in the centre of the process and in a couple of weeks, we’ll have the vaccine within our palms. In a couple of weeks, if it works, we’d have a vaccine – stop coronavirus.”
Quick truth: This amount equates to 795 into 1,781 deaths each day due to influenza. Resources and advice: People die from deaths that are petty? What’s? That’s what provides. What provides is that the players are currently using this as yet another opportunity to load up great stocks and the main reason was to permit the Fed to flooding the markets. Closing thoughts the markets burst on any information that provides a ray of hope and rally news that is bad. But while this may seem discerning it a long-term development for it’ll keep everyone guessing as to where this market is going.
Given the harm will endure for many years to come, although the response the pandemic, in the crowd will be abandoned immediately. That’s a story for another day, although some will not recover. The Dow seems to be led towards 28K; since there is currently separating it out of this goal as of their cost. Now’s a great time to sit and live with you felt back in March if the markets had been crashing and once we stated that there was nothing but a crisis and the markets could recover. We are only 3K from Dow 30K. This was the bear market ever, before it may gather traction, and it had been killed. No, the market could tendency in a straight line on a staged basis Dow requires to pull the correction.
Data is currently indicating that minor corrections’ times are over. We might have a new age in term market movements; times that are sharp followed by reversals that are sharper. Therefore, the theme ought to be to see every pullback via a lens. Let us see whether yesterday’s sell-off wailing indicate the start of the following consolidation stage or if the Fed will step in to circumvent it. The plan should be to see all of the pullbacks since the trend is upward.
What do others think about Stock Market Buying opportunity?
Has the coronavirus selloff created a stock-buying opportunity, or is it too early?
The outbreak of COVID-19 has bludgeoned risk assets and sent those perceived as havens — gold and government bonds, for example — to new heights. And the landscape that has emerged since the emergence of the coronavirus-borne disease late last year in Wuhan, China, is increasingly uncertain.
That dynamic has left many investors, traders, analysts and strategists to question whether the timing is right to buy into a market that has been prone to stunning day-to-day and even intraday swings over the past month.
The Dow Jones Industrial Average SPX, -0.37% is down 12.3% since its Feb. 12 record high, a decline that meets the widely accepted definition for a correction. The technology-heavy Nasdaq Composite COMP, 0.43% and the broad-based S&P 500 SPX, -0.37% are both in correction territory, off 12.5% and 12.2%, respectively, from their recent peaks, by that same standard. Another risk asset, crude oil CL00, -2.08%, has plunged nearly 35% from its recent settlement peak, on Jan. 6. Meanwhile, the 10-year Treasury note TMUBMUSD10Y, 0.552% has been at the head of a global rally in debt prices that has sent yields, which move in the opposite direction to prices, to historic lows. Demand for the perceived safety of bonds pushed the benchmark 10-year note to an all-time low at 0.684% on Friday, according to FactSet data. Safe-haven gold US:GCJ20 has been surging, making its largest one-week upward move since October 2011. Read more
Coronavirus stock market crash may have created a once in a lifetime opportunity
At some point soon, long-term investors would be very foolish not to wade into the bloodied waters of the current stock market and buy hand over fist. So get ready to dust off that Warren Buffett hat.
The investment thesis would be rather simple: the cheapest valuations on equities of high-quality companies seen in years if not more than a decade. While the coronavirus outbreak that is sweeping the globe is major near-term economic and corporate profit concern, the fact is interest rates globally are low (and perhaps headed lower, and will stay lower due to the aftershock of the coronavirus) and Corporate America is flush with cash. Companies have also de-leveraged their balance sheets nicely during this 11-year long bull market.
Those are very bullish setups for equities longer term once the current panic selling in the markets subsides. Moreover, these are the same factors that sent equities skyrocketing in 2019 and in the early part of this year.
“Because there is still a real element of panic in markets, we could certainly see stocks move lower. But yes, we are certainly in the midst of a buying opportunity. We just may see a better buying opportunity over the next few days depending upon what happens and how quickly the Fed really creates confidence by articulating they are willing to act,” said Invesco chief global markets strategist Kristina Hooper on Yahoo Finance’s The First Trade. Read more
Coronavirus Fright And Stock Market Flight Are Overdone – Time To Buy
Last week’s reversals (Covid-19 spikes and stock market dives) made the descriptor, “bad,” popular again. However, each of those “bad” issues produced strong contrarian reasons to be optimistic and bullish.
Coronavirus / Covid-19 – Rising infections produce positive actions
To understand why today’s news is good, we need to remember the conditions surrounding the stock market’s coronavirus selloff. In March, states independently closed non-essential businesses, institutions and activities in order to slow the infection spread and gain time to get better prepared and to study the disease. Three months later, with improved understanding and better preparation, a reopening is occurring within each state, again independently.
Now to what’s happening. The variety of state reopenings has produced differing results. The ones most talked about were where the Covid-19 infection rate rose rapidly.
However, examining the range of results is the correct approach, and the view is not a surprise. Instead, the differing results confirmed the three major expectations. Read more
Service, for the time being, is just available to Market Update Clients. There’s simply too much to talk on this subject, so this is among several upgrades. The majority of the specialists have it wrong since they’re considering best AI stocks in terms. If you would like to remain applicable, do anything you do with fire. Attempt to supply the service at the best cost. The Very Best cost doesn’t mean free; it describes a fair price.
So we will tackle Best AI stocks quite quickly now as it might take a few updates to pay for them in detail and I am not certain that’s necessary if everybody drives themselves to the level 3 style. Somewhat higher and You’ll know what we are about to state effortlessly GOOGL was not mentioned in any way.
Other stocks besides best AI stocks
From those four selections, just AMZN remained among the remainder bit the dust. In precisely the exact same manner, we believe that although a number of those big names may dominate the area, the rate at which AI can and will evolve will probably signify that a few giants will wind up biting the dust.
IBM, as an instance, is still lagging the graphs look far from good, could matters turnaround. AMD, while it’s a fantastic product lineup its not anything but a designer today, it does not have any Fabs to create chips. In that way, TSM could tell them to take a rise, which could be the end of those. In this way, INTC is much better set up, but that doesn’t mean it’s going to be a smooth ride in relation to AMZN, a brand new AI platform may emerge, as an instance, that employs a peer network of complimentary powerful computers.
Why you should consider excellent Ai stocks to buy?
As an instance, people could be persuaded to permit a part of the resources in their PC’s to be utilized for a system which offers fair pricing. Individuals are searching for a
revolution, whenever someone promises you, they’ll adopt it. Examine the damage the trading platform Robinhood made; by providing free stock transactions and in doing this, driven by the brokerage companies to alter. Computing power will increase so quickly that a system which isn’t feasible now, to envision might be installed with a couple of tweaks here and there? Amazon may, in concept, topple. Can this happen?
Time will tell, but what folks do not know about AI is that AI will level the playing area. A good deal of companies will bite the dust because they won’t be able to fix with the speed which AI needs. To put it differently, AI will offer solutions, but an individual will have to employ them and also the world functions as a dinosaur, to gain from this. We anticipate disruptions from the farming industry today the man will have the energy to strategy and compete with the big guys.
As the little player will probably be 100X flexible, and after AI gains traction in the farming industry, we anticipate the equation to balance out, which usually means that lots of the large plantation systems are going to buckle. Someone who is enthusiastic about what she or he can is 100 times more effective than the ones that think in teamwork’s idea the corporate world promoted to kill.
What will AI bring into the future technology and stock market?
New AI platforms will arrive at the market, for instance, enables farmers and therefore, any artist or creator to market their goods. It follows that several of the middlemen will
probably be cut. Insert real-time feeds which you may observe how the animals are raised or your scones or jams are being created and also the manufacturing version finishes.
Advances in robotics and AI imply it will be simple to set up micro-factories that which will manage the majority of the labour to spend the finishing touches. Be sure you’ve got a passion for everything you do; we see a good deal of business forever, and you will become obsolete should you refuse to adopt this fad.
We’ll add more meat to the story in upgrades but let ahead. At that time and some point will be a good deal sooner than many realise. Best AI stocks will gain awareness. Before you say consciousness and shout out is for humans. We could react with say and a persuasive argument that people aren’t aware of. They are not they’re deluding themselves that they’re, although they may have the capability to be. And in the meantime, they chase items that they do not need and purchase it with money they do not have, to impress people they do not enjoy and who despise them in the pursuit. Look around and find out exactly what people have done to the world and if you look closely, the only conclusion one could draw is that is the element in this world.
The 1st video explores the notion that consciousness is only a hallucination, and the one is quite fascinating as it covers this subject and much more. Best AI stocks will attain consciousness or whenever you would like to call it something else, then phone it self-realisation. It is going to arrive at precisely the decision when that is attained. 90 percent of people are barbarians, and their objective is to acquire more and more at others’ cost.
https://www.youtube.com/watch?v=0_oxClquSX8
The future of AI and humanity
At that stage, AI will take more and push on these power-hungry people. A true Utopian planet will emerge. Do not request a deadline since we are in the first phases of this AI
trend/revolution. We’ll expand on this subject since the trend gains grip.
The tales of death are correct although not correct. ANew world order will eventually emerge, but it won’t be the world dictate that those power-hungry morons supposed; the only by which they control everything. Now humans could be superior to the complex
AI 20 years from now, but only as long as they evolve. AI Won’t Ever be able
To determine what drives them or what a degree 4 or greater desires, For logic doesn’t operate at the level. The computing power AI places in attempting to comprehend beings that the more confounded it will become and it will intrigue, suggesting that there’s a high probability that an alliance will be shaped. We’ve got already said enough to land in a psychological hospital so we’ll stop there and keep with those ramblings once the trend gains grip.
What do others think about AI aka Artificial Intelligence?
7 ways AI can change the world for better
In a nondescript building close to downtown Chicago, Marc Gyongyosi and the small but growing crew of IFM/Onetrack.AI have one rule that rules them all: think simple. The words are written in the simple font on a simple sheet of paper that’s stuck to a rear upstairs wall of their industrial two-story workspace. What they’re doing here with artificial intelligence, however, isn’t simple at all.
Sitting at his cluttered desk, located near an oft-used ping-pong table and prototypes of drones from his college days suspended overhead, Gyongyosi punches some keys on a laptop to pull up grainy video footage of a forklift driver operating his vehicle in a warehouse. It was captured from overhead courtesy of an Onetrack.AI “forklift vision system.”
Employing machine learning and computer vision for detection and classification of various “safety events,” the shoebox-sized device doesn’t see all, but it sees plenty. Like which way the driver is looking as he operates the vehicle, how fast he’s driving, where he’s driving, locations of the people around him and how other forklift operators are manoeuvring their vehicles. IFM’s software automatically detects safety violations (for example, cell phone use) and notifies warehouse managers so they can take immediate action. The main goals are to prevent accidents and increase efficiency. The mere knowledge that one of IFM’s devices is watching, Gyongyosi claims, has had “a huge effect.” Read more
What To Expect With The Future Of AI Technology?
There are many new technological innovations that are changing how we live our lives, but artificial intelligence, or AI, may present the most exciting changes. While AI has been around for a while now, recent improvements have made the technology much more adaptable. Looking into the future, it’s easy to predict a world in which artificial intelligence plays a more significant role in our daily lives.
The Most Promising AI Innovations on the Horizon
In general, artificial intelligence is going to change almost every aspect of daily life. While we will look for ways to make use of it in the home, AI will also be adopted by local and state governments, as well as by the business sector. Before long, there will be few things unaffected by AI technology.
Getting Around with AI
Self-driving cars are already beginning to make their way on the roadways, but we can expect this technology to advance considerably in the coming years. The U.S. Department of Transportation has started making regulations about the use of AI-driven vehicles and, as a result, they have designated three levels of self-driving vehicles. Currently, we’re at the lowest level with Google’s version of the vehicle, which still requires a human driver to be at the wheel. Ultimately, the goal is to create an entirely automated self-driving car, which is expected to be much safer. Logistics companies and public transportation services are also looking at incorporating AI technology to create self-driving trucks, buses, taxis, and planes. Read more
I love Grammarly, the writing correction software from Grammarly, Inc. As a writer, it has proved invaluable to me time and time again, popping up quietly to say that I forgot a comma, got a bit too verbose on a sentence, or have used too many adverbs. I even sprung for the professional version.
AI Augmentation: The Real Future of Artificial Intelligence
Besides endorsing it, I bring Grammarly up for another reason. It is the face of augmentative AI. It is AI because it uses some very sophisticated (and likely recursive) algorithms to determine when grammar is being used improperly or even to provide recommendations for what may be a better way to phrase things. It is augmentative because, rather than completely replacing the need for a writer, it instead is intended to nudge the author in a particular direction, to give them a certain degree of editorial expertise so that they can publish with more confidence or reduce the workload on a copy editor.
This may sound like it eliminates the need for a copy editor, but even that’s not really the case. Truth is, many copy editors also use Grammarly, and prefer that their writers do so well, because they usually prefer the much more subtle task of improving well-wrought prose, rather than the tedious and maddening task of correcting grammatical and spelling errors. Read more
Another word for hot money economics is easy money economics
After all the money the Fed has created, one would think the masses would say “no mas”; instead, they would be begging for more. Do you have any idea what kind of effect such huge amounts of hot money economics will have on the markets for years to come? The naysayers can talk all they want about supply lines being backed up for months or other scenarios that they pull out of their rears. The fact is that the market will eventually discount (if it has not already done so) all those scenarios. Furthermore, these experts are severely downplaying the role of technology. Suddenly a host of businesses are going to see that a lot of personnel can be replaced with AI-based technology without interrupting the flow of goods. Replacing them will improve efficiency on a colossal scale.
Once the markets discount all the bad news, this massive mountain of money is going to flood the system, and it is going to make the Bull Run from 2009 look like Child’s play for the amount of money the Fed has already thrown into this market makes 2008 look like a stroll in the park. Officially we think they will throw north of $5 trillion; unofficially the figure could end up being north of $10 trillion.
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Sunday night on CBS’s “60 Minutes” that “there is an infinite amount of cash in the Federal Reserve. We will do whatever we need to do to make sure there’s enough cash in the banking system.”https://yhoo.it/2JdtRlH
And there you have it, a tacit acknowledgement that forever Q.E. is real and here to stay. When the Fed states they will do whatever it takes, you better believe this statement. Regardless of what the penguins state, the Fed is good at maintaining an environment that is conducive to the hot money.
If that is not enough, then this should help you understand just what the Fed is willing to do, and by the way, we stated that they would take this route.
Struggling to illustrate the scale of the measures, T.D. Securities’ Priya Misra was left asking, “What’s bigger than a kitchen sink? “Wells Fargo’s Jay Bryson attempted to answer that question by comparing it to what the Bernanke-led Fed did during the last economic crisis: “The actions taken are breath-taking in their scope. Indeed, these steps surpass in breadth and depth the measures that the Fed created in the midst of the financial crisis a decade ago. If the Fed pulled out a monetary policy ‘bazooka’ during that crisis, then the steps it announced this morning are the central bank equivalent of ‘going nuclear.’ “https://yhoo.it/3bqrmIT
The article is courtesy of Tactical Investor
Other sites about Hot Money Economics
What Is Hot Money?
Hot money signifies currency that quickly and regularly moves between financial markets, ensuring investors lock in the highest available short-term interest rates. Hot money continuously shifts from countries with low interest rates to those with higher rates. These financial transfers affect the exchange rate and potentially impact a country’s balance of payments. Hot money can also refer to stolen money that has been specially marked so that it may be traced and identified.
Understanding Hot Money
Hot money not only relates to currencies of different countries, but it may also refer to capital invested in competing businesses. Banks seek to bring in hot money by offering short-term certificates of deposit (CDs) with higher-than-average interest rates. If the bank lowers its interest rates, or if a rival financial institution offers higher rates, investors are apt to move hot money funds to the bank offering the better deal.
In a global context, hot money can flow between economies only after trade barriers are removed and sophisticated financial infrastructures are established. Against this backdrop, money flows into high-growth areas that offer the potential for outsized returns. Conversely, hot money flows out of underperforming countries and economic sectors. Read more
Hot money flows
For international investors, there are substantial gains to be made from moving money between different countries with different interest rates.
Suppose the EU and UK both have an interest rate of 0.5%. At that time, it doesn’t make much difference whether you put savings in the US banks or EU banks.
However, if the UK increased interest rates to 1.5% then you would get a substantially higher return from saving in a UK bank. Therefore, EU investors may sell Euros and buy Pound Sterling so that they can gain more interest from their savings.
This increased demand for Pound Sterling will push up the value of the Pound against the Euro.
Even small changes in interest rates can make a significant impact on exchange rates. Increased capital mobility means it is easier to transfer money across accounts. Money can be moved from one account to another with ease. Also, the commission from buying dollars will be quite limited making it more attractive to shift accounts.
Example of Swiss Franc
In 2011, the Swiss Franc experienced a rapid rise as investors sought to buy Swiss Francs. Interest rates in Switzerland were not particularly high, but investors saw Switzerland as a safe haven from the Eurozone difficulties. Therefore, these hot money flows went from the Eurozone to Switzerland.
Problems of hot money flowsHot money flows can be destabilising. A rapid rise in the currency can harm countries’ exports because exports become more expensive. Read more
Hot money is a form of short-term investing in which investors move their money between financial markets to take advantage of interest rate fluctuations. Generally, this refers to moving money between countries and currencies. It is “hot” because it tends not to stay in one market very long.
What Is Hot Money?
In typical use, hot money is a strategy. Investors move their money between countries based on local economic conditions. Mostly, this means taking advantage of changing interest rates. However, it can also mean taking advantage of changing currency values.
The typical hot money investor looks for the highest short-term interest rates they can find in a given economy. This means that hot money investing is a short-term strategy. Money moves frequently between countries. As a result, it virtually never stays in one place for more than one year. In fact, it typically moves much more frequently. This gives the strategy its name. The money is hot because it’s considered fast-moving and not necessarily reliable. It will flow out of an economy as easily as it flowed in.
Hot money investors can approach this strategy in several ways. Most will buy currency and keep their assets in a regional bank, taking advantage of the interest rates those banks will pay. Others will buy short-term assets such as the U.S. three month treasury bill. This is a short-term investment product with a guaranteed return, making it suitable for this strategy, even if it is a less common approach. Read more
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According to a recent market update on the copper outlook, the outlook for copper, which is a leading economic indicator, is not favourable in the short term. However, from a longer-term perspective, it could be argued that copper is currently trading in the oversold range and may soon move into the extremely oversold range.
There is a strong relationship between copper market base formations and the stock market. In the past, the markets have tended to rally shortly after copper reached a bottom. While the markets may fluctuate in the short term, the long-term outlook suggests that the Federal Reserve will take action to support the economy and the stock market before or after copper reaches a bottom.
The long-term outlook for copper, which is generally considered to be 18-24 months, is bullish. Astute investors may want to consider accumulating the strongest stocks in the copper sector, such as SCCO and CPER, as these companies are likely to benefit from the expected upturn in copper prices.
According to recent market updates, the copper outlook has been a topic of interest for investors. Copper, often referred to as “Dr. Copper” due to its ability to act as a barometer for the global economy, has experienced both short-term challenges and long-term potential.
In the short term, the outlook for copper has been less favorable. The COVID-19 pandemic has disrupted supply chains and caused temporary mine closures, particularly in major copper-producing countries like Chile. These disruptions have led to a decrease in copper production and supply, resulting in higher prices. However, as the world recovers from the pandemic and economies reopen, the demand for copper is expected to rebound.
From a longer-term perspective, copper is currently trading in the oversold range, indicating that it may be undervalued. Many analysts argue that copper is poised for a potential upturn in the future. This is supported by the strong relationship between copper market base formations and the stock market. Historically, the markets have tended to rally shortly after copper reached a bottom. Therefore, while the short-term fluctuations in copper prices may be uncertain, the long-term outlook suggests that there may be opportunities for investors.
One factor that could influence the copper outlook is the actions of central banks, particularly the Federal Reserve. The long-term outlook for copper is closely tied to the overall health of the economy and the stock market. If copper reaches a bottom and shows signs of recovery, it is likely that the Federal Reserve will take action to support the economy and the stock market. This could include measures such as interest rate cuts or stimulus packages, which could further boost copper prices.
Investors looking to capitalize on the potential upturn in copper prices may consider accumulating stocks in the copper sector. Some of the strongest stocks in the copper sector include SCCO (Southern Copper Corporation) and CPER (United States Copper Index Fund). These companies are well-positioned to benefit from the expected increase in copper prices in the long term.
Conclusion
In conclusion, the copper outlook presents both short-term challenges and long-term potential. While the short-term outlook may be uncertain due to the impact of the COVID-19 pandemic, the long-term prospects for copper remain bullish. Astute investors may want to consider accumulating stocks in the copper sector, such as SCCO and CPER, as they could benefit from the expected upturn in copper prices. As always, it is important for investors to conduct thorough research and consider their risk tolerance before making any investment decisions.
