Warning Signs 04 (Jul 23 - Dec 26)

[behappyalways]

Berkshire's Growing Cash Pile Has A Hidden Message On Stocks
https://www.zerohedge.com/markets/berks ... age-stocks

[winston]

US Credit Cards Delinquency

Over the last year, roughly 8.9% of credit card balances transitioned into delinquency, the New York Fed reported.

According to TransUnion’s research, “serious delinquencies,” or those 90 days or more past due, reached the highest level since 2010.

Source: CNBC

[behappyalways]

Is Buffett's Cash Hoard A Market Warning?
https://www.zerohedge.com/markets/buffe ... et-warning

[winston]

Struggling Dow transport stocks could be economic warning signal

By Lewis Krauskopf

The Dow Jones Transportation Average has fallen about 5% so far this year, a significant contrast with the 9% year-to-date rise for the benchmark S&P 500 and the 1% rise in the Dow Jones Industrial Average.

Other areas that have struggled include small cap stocks, which some analysts believe are more sensitive to economic growth than large caps, as well as real estate shares and some high-profile consumer stocks such as Nike, McDonald's and Starbucks.

Source: Reuters

https://theedgemalaysia.com/node/713900

[winston]

There are 8 warning signs of a stock market bubble and 6 of them have already flashed, UBS says

by Matthew Fox

Generative AI hype has driven stock prices to record highs, raising bubble fears.

Current conditions mirror 1997, not 1999, suggesting a bubble could soon form.

1. The end of a structural bull market - Flashed
2. When profits are under pressure - Flashed
3. Large loss of breadth - Flashed
4. Needs a 25-year gap from the prior bubble - Flashed
5. Has a 25-year gap from prior bubble - Flashed
6. Retail starts to participate aggressively - Flashed
7. Monetary policy being too loose - Hasn't flashed
8. Extended period of limited declines - Hasn't flashed

Source: Business Insider

https://finance.yahoo.com/news/8-warnin ... 47040.html

[winston]

Is the Stock Market Going to Crash? 153 Years of Valuation History Weighs In and Provides a Big Clue.

by Sean Williams

The S&P 500's Shiller P/E ratio is based on average inflation-adjusted earnings over the previous 10 years.

As of the closing bell on June 13, the S&P 500's Shiller P/E stood at 35.38. When back-tested to the start of 1871, this represents one of the highest-ever readings during a bull market rally.

It's also more than double the average reading over the last 153 years of 17.13.

The Shiller P/E ratio has surpassed 30 six times in 153 years, and the previous five instances were all associated with pullbacks in the S&P 500, Dow, or Nasdaq Composite ranging from 20% to as much as 89%.

Source: The Motley Fool

https://finance.yahoo.com/news/stock-ma ... 00830.html

[winston]

Near-Perfect Recession Indicator Just Flashed a Warning Sign

by Andrew McGuirk

Sahm Rule is one of the most reliable early indicators of a recession. It’s named after former Federal Reserve economist Claudia Sahm.

This recession signal triggers when the three-month moving average of the unemployment rate rises 0.5 percentage points or more from its lowest point within the past year.

When demand for workers is low, that’s a problem… one that tends to snowball out of control into a recession. But when unemployment rises due to a high supply of workers, that’s a different story entirely.

Many of the sectors that typically lead a recession – like manufacturing or construction – are still resilient parts of the jobs market right now…

The Sahm Rule may have a powerful track record. But this time, it likely isn’t telling us that a slowdown is right around the corner.

As always, it’s important to look deeper for the full story… And that story shows our economy is still strong today.

Source: Daily Wealth

https://dailytradealert.com/2024/09/04/ ... e_vignette

[behappyalways]

Credit Spreads Send A Warning For Stock Investors
https://www.zerohedge.com/markets/credi ... -investors

[winston]

Wall Street banks say markets are flashing signs of rising US recession risk

A model from JPMorgan Chase shows that the market-implied probability of an economic downturn has climbed to 31 per cent on Tuesday (Mar 4), from 17 per cent at the end of November.

Key indicators like five-year Treasuries and base metals are showing an even higher – toss-up – chance of a contraction.

While it’s far from the base case, a similar model from Goldman Sachs Group also suggests recession risk is edging up, at 23 per cent from 14 per cent in January.

Mohamed A El-Erian, the president of Queens’ College, Cambridge and a Bloomberg Opinion columnist, now sees a 25 to 30 per cent chance of a recession, up from 10 per cent at the beginning of the year.

Source: Bloomberg

https://www.businesstimes.com.sg/intern ... ssion-risk