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There's one chart that has Dennis Gartman worried about the markets right now. » Read More
One Wall Street firm predicts stocks are about to surge, but it could be over within the blink of an eye.
Investors are anticipating the outcome of the June meeting of the Federal Open Market Committee, at a time when Federal Reserve policymakers have hinted at raising borrowing costs. On Friday, Fed Chair Janet Yellen said that an interest rate hike in the coming months would be appropriate, given the economic data.
Some Wall Street watchers think a rate increase could come as early as next month, which could help boost markets as the uncertainty dissipates.
"We could see some kind of rally that could last until the FOMC meeting in a few weeks," Kristina Hooper, head of U.S. capital markets research and strategy at Allianz Global Investors, recently told CNBC's "Futures Now. "The market seems to be coming to terms a bit more with the possibility of a Fed rate hike in June."
As a result, Hooper sees the S&P 500 index surging 5 to 10 percent as anxiety over the June Fed meeting dissipates. However, once the Fed makes its decision on rates, she believes uncertainty could climb again in anticipation of the central bank's next move.
"For so many years now, the Fed really has dominated and in many ways dictated risk and reward profiles for asset classes," said Hooper. "That doesn't appear to be going away anytime soon."
Gold's losing streak continued on Tuesday as the precious metal tumbled to its lowest level in more than five weeks. However, one of Wall Street's most closely followed analysts says the dip presents a prime buying opportunity and that bears are reading the market incorrectly.
Ultimately, Boockvar believes that the 2011 highs of around $1,900 for gold are not only reachable, but surpassable, as reasoned that bull markets historically exceed the previous bull market peak at some point.
As Boockvar sees it, it's just a matter of when.
"In order to be bearish on gold, you have to believe that the Fed is going to embark on 100 to 200 basis points of hikes over the next couple of years, which I think is completely unrealistic," added Boockvar. "This is an ideal opportunity for those who have not gotten in."
Citing the relative-strength index, Boockvar said that gold is the most oversold it has been since mid-December. He also added that global interest rates have given trillions of dollars' worth of sovereign bonds negative yield. Coupled with rising Fed rates, this development would theoretically provide gold investors with positive carry on gold. The precious metal is in the midst of its longest losing streak since November 2015.
For additional context, Boockvar highlighted the mid-2000s, when the Fed raised the Federal funds rate from 1 percent to 5 percent. During that time, gold went from $400 to $700. The analyst also cited the start of 2016, when Bank of Japan Governor Haruhiko Kuroda adopted negative interest rates. However, the move failed to help the nation achieve stability in its currency.
Something strange is happening right now in the gold market, and it has commodities investor Dennis Gartman erring on the side of caution.
Gold ended Friday with its biggest weekly drop in two months, and its third straight week of losses. Conversely, the dollar saw its third straight week of gains following comments from New York Federal Reserve President William Dudley. The central banker indicated that markets were underestimating the likelihood of an interest rate increase in June or July.
The backdrop suggests investors may be positioning themselves for higher rates—a possibility not lost on Gartman, who has taken note of some interesting movements in the yellow metal.
"There has been an aggressive seller of spot gold at 1,270 to 1,285," Gartman told CNBC's "Futures Now" in an interview. "Whoever that person or institution is will likely continue to be there until after a rate increase," he added.
A closely followed market watcher has spotted a disturbing pattern that could bring the S&P 500 down to a level not seen since June 2013.
While Henrich doesn't manage any money, his chart work on NorthmanTrader has garnered a significant amount of attention in the online world. His latest take on stocks comes as nearly all of Monday's big market gains were wiped out Tuesday, when the index closed at 2,047.21.
The S&P 500 must stay above the 2,025 to 2,030 range in order to keep the S&P 500 from falling by nearly 500 points from current levels, Henrich said.
"If we break below this level by the end of May, then stocks may actually indeed retest lows or break lower because the technical targets on a break like that would be significantly lower from here," he said.
Henrich's bear case revolves around earnings declining by 7.1 percent in the first quarter, even as most central banks continue to pursue stimulative policies.
He points out that official GAAP earnings have been declining since 2015 — thus making stocks very expensive. He calls this a "technical red flag."
The S&P 500 is at a structurally high risk of repeating a major topping pattern consistent with the year 2000 and 2007, according to Henrich.
On the other hand, if this scenario doesn't play out, he believes a bull case could emerge.
"If GAAP earnings can reverse the trend and reverse higher, then markets can break to sustained new highs with technical targets of 2,334 and 2,458," Henrich told CNBC.
One of Wall Street's most closely followed strategists has a message for investors: Stop worrying!
"We're going to break through and head up to new highs," said Jim Paulsen on CNBC's "Futures Now" on Thursday when discussing why the S&P 500 will hit 2,200. Paulsen noted that the constant fears over the economic slowdown in China, the oversupply of oil and even concerns over who the next president will be are clouding the marketplace and creating unnecessary jitters on Wall Street. "Climbing a wall of worry is back and is likely to push us up into new highs and generate a little optimistic excitement again." Paulsen's 2,200 price target on the S&P 500 represents a more than 6 percent rise from where the large-cap index is currently trading around 2,064.
The chief investment strategist for Wells Capital Management said that strong employment and wage growth, the ending of a grim earnings season and reduced deflationary fears worldwide thanks to rising oil prices make him adamant that the best is yet to come for stocks. However, he did say the Fed's dovish approach could be the one thing that could potentially derail growth in 2016.
"They're keeping us as the start line of their tightening cycle," Paulsen said when discussing the Fed's delay since raising rates for the first time in seven years back in December of 2015. "It's like pulling a Band-Aid off a little bit at a time, rather than just ripping it off and letting the markets adjust."
Paulsen concluded that the Fed can always reference a global issue as reasoning for not raising rates, but that the central bank needs to avoid keeping the U.S. economy in limbo.
"I'm amazed they've stayed as long as they have with this policy," said Paulsen. "They continue to come up with reasons not to raise rates. A 'Brexit' being the most recent one."
Nonetheless, Paulsen is confident that stocks will continue to rise and break out of the tight range we've been in for the last year.
Gold prices are surging this year, and that has one of Wall Street's largest banks flocking to the yellow metal.
"We're recommending our clients to position for a new and very long bull market for gold," JPMorgan Private Bank's Solita Marcelli said Tuesday on CNBC's "Futures Now." After seeing three back-to-back years of losses, the precious metal has rallied 20 percent in 2016. And that's just the start of the next leg higher, according to Marcelli. "$1,400 is very much in the cards this year."
Read MoreFutures Now: Gold Shines
The firm's global head of fixed income, currencies and commodities reasoned that, with so many negative interest rate policies around the world, gold will continue to be bought as an alternative currency. And, with expectations that investors will seek to hedge against the resulting volatility, Marcelli believes that gold will remain attractive in a world where bonds and U.S. rates may cease to be the main risk-off asset.
"Central Banks may consider diversifying their reserves [as they anticipate] negative rates on existing holdings," said Marcelli, when discussing the commodity as safe-haven trade. "Gold is a great portfolio hedge in an environment where the world government bonds are yielding at historically low levels."
While Marcelli admits the move will come slowly, she remains convinced that the commodity will continue to grind higher — with that key $1,400 level being the first line in the sand.
"Gold is looking more and more attractive every single day," concluded Marcelli. "As a nonyielding asset, it has a minimal storage cost, so when you compare it to negative-yielding assets, it actually has a positive carry."
Oil's chart just formed a key technical pattern that's sure to have the bulls running wild, but one trader warns investors shouldn't get too carried away.
"People are going to get really excited about the fact that we are seeing what some call a 'golden cross,'" Scott Nations told CNBC's "Futures Now" on Tuesday. A golden cross refers to when a short-term moving average crosses above a long-term moving average — technicians often view this occurrence as a bullish reversal in trend. In the case of oil, its 50-day moving average touched the 200-day moving average Tuesday.
According to Nations, in crude's specific case, where its 50-day moving average crossed its 200-day moving average on Tuesday, it's merely a temporary bounce. "[The 'golden cross'] means almost nothing when the 200-day moving average is falling as it is right now," explained the chief investment officer and president of NationsShares.
Furthermore, Nations noted that oil is butting up against resistance around the $45 level. That doesn't discount the fact that we could see slightly higher crude prices in the near future, as Nations pointed out that the outages due to the wildfires in Canada will continue to support prices in the near term.
However, he said the likelihood of a rip-roaring rally is still slim. "I think we are going to have to see something really fundamental change before we can see a lot more upside."
Oil was up more than 2 percent Tuesday, trading at just under $44.50 per barrel.
Last week, Trump joined CNBC's "Squawk Box" to discuss a wide range of topics including U.S. debt, interest rates and replacing Fed Chair Janet Yellen. It was Trump's comments about potentially renegotiating the more than $19 trillion in U.S. debt and the sensitivity surrounding higher interest rates that raised eyebrows.
While some observers argued that Trump's approach could be tantamount to a debt default, Schiff told CNBC the GOP nominee was fundamentally correct in his observation.
"Trump just admitted on CNBC that America has too much debt to afford a rate hike, and that he wants our creditors to accept less than 100 cents on their Treasuries," the Euro Pacific Capital CEO explained on CNBC's "Futures Now" last week. "In other words, Trump knows a U.S. government default is inevitable."
Last year, the widespread belief that the Federal Reserve would tighten monetary policy unsettled markets. Recently, soft economic data and turmoil around the globe have softened expectations of a rate hike. Still, Schiff said an eventual rate hike could leave the world's largest economy exposed to a growing risk.
"If rates go up, refinancing [debt] doesn't help. The only thing that helps is restructuring," said Schiff, who compared the situation to the crisis in Puerto Rico.
The commonwealth "can't pay because they are broke, well math applies on the main land just like it applies in Puerto Rico, we can't pay either," he said. "And if interest rates go up Donald Trump is right, we have no choice than to tell our creditors they are taking a big haircut," he added.
A longstanding earnings trend is finally flipping around, and that could be very positive for stocks, according to Bespoke Investment Group founder Paul Hickey.
"Heading into this earnings season, everyone was expecting earnings just to be horrible. But what we've seen throughout the reports is that ... more and more companies exceeded expectations," Hickey said Thursday on CNBC's "Futures Now."
Over the past four weeks, more companies in the S&P 1500 have experienced positive revisions than downward revisions to earnings expectations. That's been rare in the past couple of years, and could drive stocks higher, he said.
"Seven out of 10 sectors have more analysts raising forecasts than they're lowering forecasts," Hickey said. "Granted the bar was set low, but they are more apt to raise guidance this earning season than we've seen in any other earnings season really in the last five years. That's positive from a long-term perspective."
Corporate guidance is also showing a similar trend, Hickey said.
"In their reports, we're seeing more companies raise guidance than lower guidance and we haven't seen that really happen in an earnings season in five years," he said.
Despite the stronger trend, one key group of investors is hesitant to put money to work in stocks.
"Individual investors are still very negative," said Hickey. "Overall, the tone of investor sentiment is very reticent to take on risk here. And, even in the past two weeks we've seen the market slightly decline from its highs and sentiment has come in very fast."
In this month's survey of sentiment from the American Association of Individual Investors, bullish views among individual investors dropped by 5 percent to the lowest levels since the February lows.
The notion of a stronger jobs report rattling investors has been perceived as a downside risk. There's been concern that robust results could pressure the Federal Reserve to lift interest rates sooner than anticipated and bring stock prices down. But it's not a factor that should worry investors, Hickey said.
"I think we're in this stretch where good news for the economy is going to be good news for the market because we have the Fed being so dovish," he said. "Until we see a new shift in stance from [Fed Chairman] Janet Yellen, I think good news will be good news."
The Federal Reserve surprised few last week when it keep interest rates unchanged, noting that it "continues to closely monitor inflation indicators and global economic and financial developments." However, one market watcher has a blunt message for Fed chair Janet Yellen: You're placing your hope in a fairy tale.
On a recent CNBC's "Futures Now," Lindsey Group chief market analyst Peter Boockvar made the case that the Fed will never get the "perfect" conditions they seek before increasing short-term rates once again.
The Fed's mandate "isn't to have a perfect world. That only exists in fairy tales, dreams and in your econometric models," Boockvar said in a recent note to clients. He believes that the Fed's monetary has been far too accommodative under Yellen as well as under Ben Bernanke.
Boockvar argued that the Fed has been taking cues from shaky international banks, and that doing so will always offer a reason to keep interest rates low.
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