The Nasdaq 100 fell and broke a historic win streak, here's what one technical analyst says could follow. » Read More
Why the second half could get ugly for this area of the market. » Read More
Commodities king Dennis Gartman says the crude crush is far from over. » Read More
One strategist explains why the market will remain untouched by events out of Washington. » Read More
"Speak softly and carry a big stick."
"When it comes to rate hikes, the Fed has no stick. All they can do is speak loudly," explained the CEO of Euro Pacific Capital on Tuesday on CNBC's "Futures Now" when discussing the Fed's strategy in 2016. "The Fed has been bluffing. They're finished tightening."
Furthermore, Schiff believes that the Fed already has the wheels in motion to enact another round of quantitative easing, but wants to represent the possibility of another rate hike to the market. Schiff maintained that if the Fed chooses to raise rates, the whole U.S. economy could implode.
"Instead, they keep positioning that they're about to raise rates, but then they keep coming up with one excuse after another," claimed Schiff, who stuck to the bearish view that the U.S. economy is on the doorstep of another recession.
"I think what they're going to do to ease monetary policy going forward is to adjust their rhetoric," explained Schiff, who noted that the Fed lacks mobility, with only a quarter of a point to maneuver within if it chooses to lower rates. "They'll start talking about not raising rates soon, then they may admit that they no longer have a bias to tightening, then they can say they have a bias to easing."
Schiff was also quick to dismiss Fed policy as the key driver behind this year's rally. Rather, he believes the market's ability to absorb Brexit aftershocks is what has helped stocks climb to record levels in 2016.
"When Brexit happened, central banks starting talking about more stimulus," noted Schiff. "I think it was Brexit that took the Fed out of the game. That's what caused the rally."
Since Britain's vote to the leave the EU, the Dow and S&P rallied 6 and 7 percent from the lows, respectively. With speculation that rates would be lowered around the world, Schiff believes the rally is "phony" and is based on the belief that there will be cheap money readily available for investors.
Schiff added that flawed central bank policies around the world have led to a "bond bubble" and warned investors about the draw of high-yielding treasuries.
"I don't own any bonds," he explained when pressed by "Futures Now" trader Scott Nations on why his bond fund is underperforming the market. "It's a bond fund that has no bonds, because I don't want to participate in a bond bubble. When the bond bubble bursts, my bond fund is going to be number one. All I have is very short-term debt in foreign currencies."
When confronted further by Nations about his call of no interest rates in 2015, Schiff was adamant that a quarter of a point is nothing to write home about.
"If you go back to late 2014, the consensus among most of the people that came on your show was that by the end of this year, the Fed will have raised interest rates between 6 and 8 times," argued Schiff. "I said they wouldn't raise them at all. Everybody was off by a mile! Nobody got closer than me!"
Of course, the Fed raised once in 2015, which led Schiff to maintain that he was far closer to being correct versus his colleagues on Wall Street.
"I knew that the Fed couldn't raise rates! The fact that they did one trivial quarter-point rate hike, and then back-tracked and took [other hikes] off the table proves that I was right," said Schiff. "They raised interest rates, the markets got crushed and the only reason the markets rallied back was because they stopped raising rates!"
The Fed will announce its July rate decision today with additional announcements scheduled for September, November and December. Schiff concluded that the Fed's next move will be a cut, not an increase in rates.
It's an indicator which may humble investors riding the record breaking S&P 500 Index's rally.
Jeroen Blokland, a widely followed money manager, finds stocks in the U.S. are too pricey based on a chart comparing the level of the market to the amount of sales generated by the companies within the S&P 500.
The higher the price-to-sales ratio rises, the more investors are paying per every dollar of revenue.
"What you see here is that the price-to-sales ratio has risen to the highest level in 15 years," Robeco Investment Solutions senior portfolio manager Blokland told CNBC's "Futures Now" recently.
"In order to justify these kind of valuations, you must anticipate that for now on that that sales will grow into the valuation," Blokland said. "So, sales growth has to pick up in order to justify this level. So far, we haven't seen that yet."
He acknowledges that growth has been decent in the U.S., but says that it doesn't nearly justify the recent record breaking levels.
So far this month, the S&P 500 has broken its intraday all-time high six times.
A catalyst? Foreign investors have been looking to the U.S. as a growth engine, as geopolitical issues cause uncertainty overseas.
Beyond valuations, Blokland believes the Federal Reserve could pose a problem for the rally.
The growing U.S. economy could push the Fed to raise interest rates this year and surprise a lot of investors, according to Blokland. Right now, the majority believes the Fed won't raise rates until 2017 — after the presidential election.
"If the economy keeps up, why not raise rates? They want to get off that very, very low level and normalize policy a bit," he said. "They have missed out on a couple of opportunities already."
As stocks and gold continue to climb in 2016, one of Wall Street's largest firms has a clear message for investors: There could be trouble brewing in this rally.
Prices on bullion and government debt, two of the safest of safe havens, have skyrocketed this year even as risk-sensitive assets have powered higheras well. According to some, that isn't a good thing.
"I believe we are seeing signs of froth in perceived safe assets," advised Stephen Parker, Head of Thematic Solutions for J.P. Morgan Private bank on CNBC's "Futures Now" last week.
Initially, Parker said, the optimism was warranted as fundamentals justified the risk rally. In particular, stronger-than-expected earnings, bolstered by top line revenue growth, have surprised to the upside, That "...is something we haven't seen in recent quarters," he said. Through Friday, 65 percent of earnings reports have come in above estimates led by beats from General Electric and Whirlpool, which has encouraged investors.
"You're seeing better signs of stabilizing economic growth," said Parker. "Economic surprises in the U.S. have reached their best levels since the beginning of 2015."
If you missed the boat on the recent gold and silver rally, fear not. Dennis Gartman says there's a different commodity that could give your portfolio a major boost in the coming weeks.
"Take a look at what's happening to cotton," the editor and publisher of "The Gartman Letter" said on Tuesday on CNBC's "Futures Now." "It's a market that nobody has been paying attention to and has been totally left off of everybody's radar."
Cotton futures are up nearly 19 percent in the last three months and are trading at levels not seen since June 2014. Those gains over the last few months are double what we have seen in gold and oil, which are both up roughly 7 percent in the same period. Year to date, cotton is up nearly 12 percent.
Gartman, whose first job out of graduate school was serving as an economist for Cotton Inc., says that the commodity has wrongfully received a somnolent reception in today's market. He added that in the past two weeks, the planted acreage for cotton was 10 million acres, which is far above the usual amount. From here, Gartman believes that news should have set up for a "very bearish report, and yet the market took that very well," as the data has been largely discounted by the market.
They say that good things come to those who wait — and that couldn't be truer for the bulls on Wall Street, according to one technical analyst.
Bank of America Merrill Lynch's Stephen Suttmeier said Tuesday the market recently experienced a "very rare signal" that could lead the S&P 500 as high as 2,400.
There were 414 calendar days between the May 2015 high and the recent one, Suttmeier said on CNBC's "Futures Now." The S&P 500 has been churning sideways for much of the last 24 months , without a meaningful breakout. But it's that lack momentum that has Suttmeier convinced we could be on the brink of the next leg higher.
He explained that since 1929 there have been 24 instances where the market went 300 calendar days or more without making a new 52-week high, and in those times the forward return was much stronger than average.
"The bottom line is when I look at these numbers and if we do follow this signal, 250 days out the average return is about 15.6 percent, the median return is about 14.8 percent and the market is up 91 percent of the time," he said.
Furthermore, Suttmeier cited improving market breadth, which measures the number of companies in the market advancing versus declining, and the number of companies hitting new 52-week highs as confirmation that this recent move past new highs could foreshadow the next great bull run.
"If you look at the price pattern here, it does support the case to get up to about 2,300 or even 2,400, and that dovetails with those targets from that signal," Suttmeier said. That's a respective 7 and 11 percent from where the S&P 500 is currently trading.
A massive global stockpile of oil could mean trouble ahead for the global crude market, according to Barclays.
Crude oil prices dropped to a two month low on Thursday, after the Energy Information Administration reported a smaller-than-expected decrease in oil stockpiles. That may be a canary in the coalmine, a top energy market watcher explained.
"For the last 6 quarters there's been this discrepancy between global supply and global demand," Michael Cohen, head of energy commodities research at Barclays, said last week on CNBC's "Futures Now."
Cohen said Barclays is bearish on oil for the next six to eight months, because the current stockpile could increase in an economic downturn, likely to drive prices lower. In the summer months, increased travel often increases the demand for gasoline, and drags up crude oil by default. Yet once that season ends, inventory levels may continue to rise.
Looking at a chart of the expected crude oil supply compared with the current amount, Cohen said the disconnect is staggering. The chart accounts for oil supply from the 38 countries in the Organization for Economic Cooperation and Development (OECD), which includes the U.S., U.K., France, Germany and Canada, among others.
Gold just posted its longest weekly winning streak since July 2011, but if investors missed out on the recent rally, fear not. One trader says the commodity has "unlimited upside," and investors have the Federal Reserve to thank for it.
On CNBC's "Futures Now" this week, Tom Colvin said that gold will remain in a bull market that will only come to an end "when central banks take their hands out of the cookie jar." The Federal Reserve is unlikely to hike rates in the foreseeable future, despite a blockbuster June employment report on Friday.
"The year-to-date rally in gold has been nothing short of spectacular, benefiting from what we have seen as a 'confused Fed' or a Fed lacking action," the senior vice president of global institutional sales at Ambrosino Brothers explained.
Gold prices have rallied 28 percent in 2016, hitting a two year high earlier this week. Even as the yellow metal has pulled back from those highs in the last two sessions, Colvin expects these dips to arise as buying opportunities for investors.
Gold started the year in a rally "and it hasn't looked back," Colvin said. "While the first six weeks of 2016 were slow to develop, the Fed's inability to secure more rate hikes, or even convince the market they were coming , fueled the rally we are seeing," he added.
This week, Bank of America-Merrill Lynch forecast that gold was building up a full head of steam that could take it to $1,500 per ounce. Colvin also has bullish expectations for bullion. His near-term target for the precious metal is $1,400, roughly $50 above where it's currently trading. Gold has not been above that level in three years.
"The market can take good news and bad news," Colvin told CNBC. However, "a confused Fed, saying one thing but doing another over and over invites buyers of gold to jump into the pool with both feet and they have."
Furthermore, Colvin says a "top heavy" equity market—the S&P 500 is within a hair of its all-time high—should continue to invite investors to buy gold as a hedge.
Stocks may have erased their post-Brexit losses, but one market watcher says there's more for investors to be worried about.
"The world just has too much debt, it's got aging demographics and it's got a lot of technology that aims to replace workers," warned Ed Yardeni on CNBC's "Futures Now" on Thursday. "Put it all together and you don't have much inflation and you don't have much growth."
From here, Yardeni envisions a global market where individuals may struggle to find safe havens for their money.
"Plenty of people are working and are hard-pressed to find a place to invest," said Yardeni. "They're all getting stretch marks from stretching for yield."
Indeed, the hunt for global yield remains fairly dire. Japan's entire yield curve is negative with the exception of the 30-year, which stands at about 0.045 percent. In Germany, the 10-year bund hit a new record low of -0.204 percent on Wednesday.
Amid the negativity, Yardeni is concerned that the Fed will continually be impacted by the weakness of global markets.
"In the past, the Fed rarely paid much attention to what was going on around the world," explained Yardeni. "They can't do that anymore."
Yardeni said that, prior to Brexit, Yellen's approach has been dovishly flawed and he expressed frustration over the notion that she can now reference the U.K. referendum when delaying a change in Fed policy. Currently, Fed futures indicate that the odds of a December rate hike are just above 16 percent.
One of the most crowded trades on Wall Street is about to implode, says one market watcher.
"We're in an epic bubble of colossal proportions," Peter Boockvar, managing director and chief market analyst at The Lindsey Group, said Tuesday on CNBC's "Futures Now" in reference to the fixed income market.
Global yields have been tumbling to record lows, with many dipping into negative territory. The U.S. 10-year hit its lowest level ever this week as traders continue to seek safety in the bond market. Yields move inversely to prices.
However, Boockvar believes that this activity is a ticking time bomb for the global economy. He reasoned that U.S. Treasury yields are being dragged down by negative-yielding debt out of Germany, Japan and Switzerland and misplaced monetary policy, and is therefore skeptical as to how much longer the rally can continue.
"It could be central banks that end this," said Boockvar in regard to upward momentum for bonds. In his recent coverage, he reacted to the newly released FOMC minutes and further questioned the Fed's ability to act effectively.
"They'll call it being 'patient.' Their forecasts are now irrelevant, their communication is now meaningless and their tools to handle whatever might come our way are toothless," noted Boockvar when describing the Fed's ability to address a flattening yield curve.
In Europe, concern for Italy's economy continues to rise as that nation struggles to maintain negative interest rates while simultaneously raising capital for its banking system, which is straddled with mounting debt.
"Maybe Italian banks are telling us that central bankers and their negative interest rate policies are actually destroying the Japanese and European banking system?" asked Boockvar in the CNBC interview.
He reasoned that Bank of Japan Governor Haruhiko Kuroda and European Central Bank President Mario Draghi could take a look at what's happening in Italy and decide that their respective monetary policies are the wrong course of action. Ultimately, Boockvar warned of the fallout that could occur if multiple nations opt to end what he referred to as a "negative deposit rate regime."
"Even if they put it back to zero, imagine the carnage, at least in the short-term bond markets," concluded Boockvar.
One of Wall Street's biggest bulls says stocks could skyrocket as much as 20 percent over the coming months due to an unusual event, one that has only been seen twice in the last 65 years until now.
Here's what happened: On June 28 and June 29, 90 percent of the New York Stock Exchange (NYSE) volume was positive. Canaccord Genuity chief investment strategist Tony Dwyer said the combination of historical precedent and fundamental backdrop suggests a 15 to 20 percent upside over the next 6-12 months.
It may sound technical, but according to Dwyer, the conviction on the part of market participants can often indicate future rallies. Certainly, the market appears headed in that direction already: Last week, stocks all but fully recovered from their Brexit knee-jerk selling, with the broad S&P 500 Index logging its biggest weekly gain since October 2014.
"If you go back to look at 1950 on just occurrences, when you had two upside 90 percent days you have never been negative three, six and twelve months later. As a matter of fact, your median gains are 12 percent, 18 and a half percent, and 29.2 percent," Dwyer recently told CNBC's "Futures Now."
He crunched the numbers with help from data gathered by SentimentTrader.com's Jason Goepfertat.
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