Warning Signs 03 (Jun 19 - Jun 23)

[winston]

Behold the ‘scariest chart’ for the stock market

By Sue Chang

In terms of median price to sales ratio, the S&P 500 is twice as expensive as it was in 2000.

Source: Markey Watch

https://www.marketwatch.com/story/behol ... yptr=yahoo

[winston]

Two warning signs are flashing on this fund manager’s bear-market checklist

By Shawn Langlois

Einhorn: “The unambiguous message delivered by the checklist is that the bull market will likely grind to higher highs for a while longer".

So, essentially, the Fed raising rates and fears the economy is in the late stages of expansion are two areas of “concern” on the list, but at this point, according to both Einhorn and Rzepczynski, that’s not enough to feed the bears.

Source: Market Watch

https://www.marketwatch.com/story/if-a- ... yptr=yahoo

[winston]

The stock market’s latest sell signal has happened only 5 other times since 1895

By Mark Hulbert

Sound Advice Risk Indicator suggests stocks are overvalued relative to real estate

The “Sound Advice Risk Indicator” is derived from the ratio of the S&P 500 SPX to the median price of a new U.S. house.

For the first time since the late 1990s, and for only the sixth time since 1895, this indicator has risen above the 2.0 level that represents a major sell signal for equities.

The investment rationale underlying this indicator is that it “measures the struggle for capital” between the two major asset classes that compete for capital at the riskier end of the spectrum — stocks and real estate.

When the indicator rises above 2.0, he argues, it means that the stock market has absorbed “a larger proportion of available investment capital than economic conditions can justify” and, therefore, it is in “imminent danger of falling.”

Source: Market Watch

https://www.marketwatch.com/story/the-s ... 2018-08-21

[winston]

A stock-market bear signal is at a more-than-4-decade high, says Goldman

by Mark DeCambre

Source: Market Watch

https://www.marketwatch.com/story/a-sto ... yptr=yahoo

[winston]

Beware Buffet’s Words: These 3 Critical Stock Market Indicators Signal Huge Losses Ahead

by TYLER DURDEN

1. According to Goldman Sachs – a bear market is nearing very soon. Historically, this indicator’s done an excellent job signaling the beginning of a bear market (although not perfectly). And at 75%, the indicator’s at levels that has always preceded a bear market.

2. Tobin Ratio – otherwise known as the ‘Q-Ratio’. . .

This ratio is different than Buffet’s favorite metric (combined market caps-to-GDP). And it’s also one of Mark Spitznagel’s favorite ways to look at equity valuations. . .

The formula is to take the combined market cap value of all firms (how the markets valuing them) and divide it by the replacement costs of all its companies (how much it would cost to rebuild the business).

Q-ratio = equity market value / equity book value

All three – Buffet’s favorite metric, the Goldman Sachs’ Bull/Bear Risk Indicator, and the Tobin Ratio – are all signaling huge downside ahead for equities.

Source: TTR

http://www.thetradingreport.com/2018/09 ... b-91746477

[winston]

Wealthy Americans may be warning of the stock market collapse to come: analyst

By Barbara Kollmeyer

U.S. Census Bureau data shows that 10 years after the crisis, median U.S. household income is finally back at 2007 levels—at $61,372.

That’s in contrast to U.S. household net, which recently crossed the $100 trillion mark for the first time, nearly 50% higher than at the cyclical high of a decade ago.

The pace of household net worth vs. incomes isn’t sustainable.

Higher borrowings, and higher exposure of households to financial markets for their wealth, means the impact of any interest rate hikes and drop in securities’ valuations could be magnified.

Source: Market Watch

https://www.marketwatch.com/story/wealt ... yptr=yahoo

[winston]

Stocks Will Crash When This Happens

by Dr. Steve Sjuggerud

Leading Economic Index (LEI) from an independent research group called The Conference Board.

The Conference Board’s LEI for the U.S. looks at 10 different economic indicators… everything from employment, to housing, to interest rates.

Importantly, this indicator has an incredible track record of predicting recessions.

Right now, this index is showing the economy is healthy. We’re nowhere near zero today… let alone going negative, like the index tends to do before a recession.

Source: DailyWealth.com

http://dailytradealert.com/2018/09/26/s ... s-happens/

[winston]

The Economy Is Flashing Warning Signs To Investors

By Mark Kolakowski

Oppenheimer: "Global growth has peaked, and the deceleration in economic activity, while not severe, is broad-based.

Our leading indicators suggest the United States is entering a slowdown regime, joining the deceleration experienced by Europe and emerging markets (EM)."

Source: Investopedia

https://www.investopedia.com/news/econo ... z5SOwVMOmu

[winston]

One of the greatest follies from the last crisis is back

by Simon Black
Hudson Yards is a gigantic real estate project on New York City’s western edge that will be the most expensive development in US history when it’s completed in 2025.

At $25 billion, the project costs more than the size of the entire economy of Iceland… which is saying a lot given that Hudson Yards is only 28 acres… literally one millionth the size of Iceland.

The Vessel is basically a giant woven staircase made from copper; it stands 15 stories, weighs 600 tons and has 2,500 climbable steps inside. And this stairway to nowhere cost more than $150 million.

The Hudson Yards developer says their project will cost $25 billion… meaning the real cost will probably be north of $40 billion…)

A full 14% of companies in the S&P 500 don’t even make enough money to cover the interest on their debt.

Source: Sovereign Man

https://www.sovereignman.com/trends/one ... ack-24180/

[winston]

Why Stock Market's 'Out of Whack' Leadership Signals Next Crash

By Mark Kolakowski

So-called defensive stocks have been leading the market lately, and that's a sign of big trouble ahead for the economy and the market alike.

Looking at data from 1948 to 2018, Paulsen finds that defensive stocks began to show strong relative performance prior to every recession in the U.S. during that time period.

"Perhaps it is time for investors to consider tilting the portfolio in a more defensive direction".

Four charts presented in another Business Insider story point to trouble ahead.

These include:
1. A double top in 2018 for the S&P 500 that looks much like charts for 2000 and 2007, before the start of bear markets in those years;
2. A global debt at all-time highs both in absolute terms and relative to GDP;
3. Annual scheduled repayments of U.S. corporate debt that will more than double by 2020;
4. And the prospect of an inverted yield curve

Source: Investopedia

Why Stock Market's 'Out of Whack' Leadership Signals Next Crash | Investopedia https://www.investopedia.com/news/why-s ... z5SxmbfyGc