One strategist lays out the fundamental reasons that will take the market even higher. » Read More
One top RBC strategist says OPEC will have to dig deeper to solve crude oil's oversupply problems. » Read More
One strategist says the markets will grind higher this year, but only if the biggest "enemy" to the market doesn't materialize. » Read More
Ralph Acampora, also known as the godfather of technical analysis, says a pause in the rally is coming. » Read More
As investors hope for a Santa Claus rally, one technician says jolly old St. Nick won't be able to save stocks from a correction in 2016.
"Our conviction lies that if you do get some seasonal year-end strength here, you want to sell into it," Oppenheimer's Ari Wald said on CNBC's "Futures Now" on Tuesday. "For the S&P 500 we are expecting a correction in the first quarter — that's where our conviction lies."
According to Wald, a correction could be attributable to three main points:
"So for the S&P we expect a correction to 1,900 support, in the coming months," Wald said. "This would mark the lower end of the index's channel connecting the 2014 and 2015 lows."
While Wald does view this as a secular bull market with below-average recession risk, he says a bull market correction would provide a few buying opportunities — especially large-cap tech.
"Large-cap growth in particular is a theme that's worked, it's a theme that continues to work. We think this premium gets placed on growth companies in a low growth world," said Wald. "We think large-cap tech is the sector with the best exposure to that theme. And when you look at the tech sector's relative trend to that of the S&P 500, we see a sector that is still retracing very stark under-performance suffered between 2000 and 2002."
The S&P 500's tech sector has rallied more than 7 percent in the last three months.
"We think that ultimately tech is the area of the market you want exposure to," Wald said.
Since the launch of the CNBC program "Futures Now" in October of 2012, one of its most frequent guests has been Peter Schiff, who runs both investment advisory Euro Pacific Capital and precious metals dealer SchiffGold.
In these appearances, he has made a series of brash (often bearish) predictions, which tend to generate a great deal of attention and provoke strong emotions.
Following yet another set of bombastic statements on last week's episode, CNBC felt it may be high time to use the benefit of hindsight to assess the wisdom of some of his more eyebrow-raising prognostications. Some of those predictions were made when he appeared on the program toward the end of its first month — on October 25, 2012.
Schiff's call: Gold will rise to $5,000 within a few years
Like most prominent gold bugs, Schiff is a sharp critic of lax U.S. monetary and fiscal policies, which he maintains will eventually weaken the dollar and lead investors to snap up bullion as a safe haven.
"Gold's got only one direction to go, and that's higher," Schiff said in October 2012. "People are going to be shocked at how inexpensive gold was" when it was trading at $1,700.
In that interview, Schiff called for gold to rise to $5,000 in a "few years"; when asked about the time horizon for this target, he replied: "I think you're going to see a big move sometime in the next couple of years."
Made when gold was trading about $1,700, this prediction may count among the least prescient ever made on CNBC.
Following a dramatic crash in April 2013, gold was trading at $1,316 a year later; a year after that, gold was trading at $1,230.
When asked about his prediction in October 2014, Schiff granted that "obviously it's going to take a little bit longer than what I believed at the time," but went on to predict that "it'll go through $2,000 very quickly, and people will be upset that they didn't buy gold at $1,700."
That prediction, too, has turned out to be flat-out wrong. Rather than quickly moving higher, gold has continued its slow move lower, and ended trading on Friday around $1,060.
In a long series of emails with CNBC, Schiff maintained that his $5,000 gold call has not yet been proven incorrect.
"I never specified that gold would hit 5000 in two years," Schiff wrote. "You can say that Schiff thought gold would make a big more [sic] in two years . He was right, but the move was in the opposite direction."
The investor also hedged on the original time frame he gave.
"A few could be 3, but it could also be 4 or maybe 5," Schiff wrote. "The marines are looking for 'a few good men.' They are certainly looking for more than two. I used that word specifically to be non descriptive as I did not know exactly how long it would take for gold to hit 5000."
He further points out that he's been bullish on gold for more than a decade, which has also entailed making bullish calls at lower prices.
Schiff's call: The dollar will crash
In the same interview, Schiff laid out what had been his primary bullish case for gold — that Federal Reserve policies would cause a rapid decrease in the dollar as compared to other currencies.
"I think ultimately, the dollar index will be cut in half, at a minimum," he said.
Actually, dollar strength has turned out to be one of the biggest market themes of the past few years. The dollar index, which compares the U.S. dollar to a basket of other currencies, was trading at 80 that day, and hasn't fallen lower than 78.90 since. On Friday, that index closed near 99.
Meanwhile, inflation has hardly run rampant. Instead, several different metrics show that inflation has remained below the Federal Reserve's 2 percent target, even as the central bank stopped its bond purchasing program, and even more recently has raised its interest rate target.
On this front, Schiff is once again doubling down. He told CNBC Friday that "the dollar will crash, just from a higher level, and the collapse will be that much greater now as a result of the huge sucker's rally we've had."
Gold prices plunged more than 2 percent Thursday on the heels of the first Federal Reserve interest rate hike in nearly a decade. The commodity is now sitting near its lowest level since 2010, and with 8 ½ trading sessions left in 2015, the commodity is on track for its third straight year of losses — which would be the longest losing streak since 1998. But despite the horrid returns, one noted gold bug is sticking to his claims that the commodity could soon surge.
On CNBC's "Futures Now" Thursday, Peter Schiff stood behind his previous call that gold will reach $5,000. "It's still going to go there," said Schiff when he was asked about his uber-bullish prediction. "I don't think there's that much downside [in gold] because I think most of this is already built into the price," he added.
The highly anticipated week of the Federal Reserve's policy decision is finally upon the market. As Wall Street braces for what could be the first interest rate hike in nearly a decade, one top economist warns it's time to buy insurance against whipsaw price action.
On CNBC's "Futures Now" last week, Gluskin Sheff's David Rosenberg said that historically, when interest rates increase, so does volatility. "The VIX [CBOE Volatility Index] is going to rise in the next year. Typically when the Fed starts to raise rates in that first year, it doesn't mean you have a bear market but you do have heightened volatility," he said.
The VIX surged above 20 for this first time in a month on Friday to its highest level since early October. This as a sharp sell-off in U.S. and global equities had investors running for cover. Rosenberg expects the market to stay flat over the next year.
"It could go as high as 28," Rosenberg said of the VIX. Super spikes in it tend to correlate with selling in the S&P 500.
If Donald Trump wins the presidential nomination, it will be terrible for the Republican Party, says Ron Paul, the former GOP presidential hopeful whose son is running for the White House.
Further, said the libertarian former congressman from Texas said, "he wouldn't win, and it would be devastating to the markets, because then you'd have Hillary [Clinton]," whose tax policies would hurt the economy.
Trump leads the GOP field, enjoying the support of 35 percent of Republican primary voters, according to a new CBS News/New York Times poll. That's a substantial rise from 22 percent in October. The new poll, conducted from Friday to Tuesday, found that support for Paul's son, Sen. Rand Paul of Kentucky, is flat at 4 percent.
On the Democratic side, Clinton's support is rock-solid at 52 percent.
The elder Paul said the Republicans could actually force the nomination away from Trump — but at a hefty cost.
"In a way, Republicans can decide who their candidate is. They can write the rules any way they want. But if they deny [the nomination] to Trump, Trump would run as an independent."
Read MoreTrump's comments cost him cash
If "they can't push him out, then somebody else would enter," Paul said. In that way, either a Trump win or a situation in which the nomination is forced away from Trump could result in a split Republican ticket.
"But I think it's more likely that Trump would run as an independent than the mainstream having an independent candidate," Paul said. Trump had said he would consider such an option but later promised not to do so.
How low can it go? That's what all of Wall Street wants to know about oil right now, which has fallen more than 65 percent from its June 2014 high. But according to one expert, the decline could be coming to an end, and that could create a terrific buying opportunity for some beaten equities.
"I do think the trend is lower," Darren Wolfberg told CNBC's "Futures Now" on Tuesday. But "I don't think $20 oil is in the cards," he added, referring to the grisly forecast Goldman Sachs gave the oil market in 2016.
The commodity plunged to a seven-year low on Tuesday, falling below $37 a barrel for the first time since 2009 before staging a stunning rebound, at one point rising as much as 2.5 percent at its high. Oil closed the choppy session at $37.51.
For Wolfberg, there are three key levels for oil, which he said will be critical heading into next year. "I'm watching that $37.50 and $37.75 level. That was the lows from August and if we are able to hold those lows I think that could put in place a double bottom," said BNP Paribas' head of U.S. cash trading. "If we close below these levels, the bottom of the near-term trend is $35 and $34.50."
Crude oil's slide continued on Monday morning, as oil futures broke below $39 per barrel. And with oil producers unwilling to publicly make moves to reduce the supply of oil, traders don't appear to see crude rising back above $50 per barrel any time soon.
On Monday, the first futures contract that shows oil above $50 expires in the second half of 2017. Crude oil for December 2017 delivery (which is more liquid than other far-in-the-future contracts) is trading at just $50.50 per barrel.
Futures contracts don't reflect pure expectations of where that commodity will trade; they also reflect things like the costs of storing that commodity, the extra price that users will pay to have access to the commodity for convenience reasons, and prevailing interest rates.
Yet the crude oil futures curve clearly reflects expectations that the commodity's plunge below $50 is not a short-term phenomenon.
"The futures curve is telling you that the market is totally oversupplied, and will remain so for a long time," commented Andy Hecht, a commodities trader and the author of How to Make Money with Commodities.
The latest bad news for crude came on Friday, when the Organization of Petroleum Exporting Countries decided to take a "wait and watch" approach to production levels, rather than taking action as oil prices continue to plummet. That spelled bad news for oil bulls who may have been hoping the oil cartel might signal a policy shift.
"In a nutshell, it tells me that it will take a long time to work through the surplus and traders feel prices won't rise significantly for a while," agreed Anthony Grisanti, a New York-based trader with GRZ Energy.
The European Central Bank shocked the world and caused a global sell-off when it announced a smaller-than-expected stimulus package this week. The message from ECB President Mario Draghi sent the euro surging more than 3 percent against the dollar, seeing its best one-day gain in more than five years, a feat that left veteran trader and commodities king Dennis Gartman stunned.
"This is something more than a bounce," Gartman told CNBC's "Futures Now" on Thursday. "I've been trading for 40 years, and anytime you see a four euro move, you have to stand back in absolute awe and in the majesty of that move. It is stunning."
Gartman noted that magnitude of the move was caused by Draghi's hawkish tone. "The ECB caught everyone off guard" by not enhancing the amount of its monthly purchase, he said.
For those wondering what it will take for the market to reach new highs, BlackRock's Russ Koesterich channeled a 1990's Clinton campaign mantra by saying "It's the economy, stupid."
Using the theme of James Carville's famous 1992 campaign quote, Koesterich told CNBC's "Futures Now" on Tuesday that the S&P 500 will continue to trade in this sideways and choppy pattern that we've seen this year until there's "significant evidence of growth" in both the economy and earnings picture.
"The key thing for the U.S. market is that we are already at the top of its valuation range. The S&P 500 is already trading at 19 times forward earnings and there's only so much further that multiple expansion can take us," BlackRock's global chief investment strategist said.
The Federal Reserve now looks set to raise rates in December, partially based on expectation that inflation is set to finally rise to its 2 percent target. There's only one potential problem.
There's actually a way that markets can see where investors think inflation will go. And they do not exactly see eye to eye with America's central bank.
Over the next five years, annual inflation is expected to run at less than 1.3 percent. Even over the next ten, investors are looking for no more than 1.6 percent per year.
The Fed is well aware of this thinking among investors. In fact, the minutes to the Fed's October meeting record that "a couple of members expressed concern about the continued decline in market-based measures of inflation compensation."
To be sure, the comparison here is not apples-to-apples.
The popular market-based measures of inflation referenced above are simply found by comparing the yield on a Treasury bond and a Treasury Inflation-Protected Security (or TIPS) of the same maturity.
Since a TIPS bond pays an investor an amount that varies with the Consumer Price Index (CPI), and a Treasury bond is not adjusted for inflation, the Treasury yield minus the TIPS yield should theoretically produce the market's expectations of inflation. That number is known as a "breakeven rate" (since it is the inflation amount that will make the TIPS investor and the Treasury investor break even with each other).
While the breakeven rate reflects expectations about the more popular CPI inflation rate, the Fed targets the alternative personal consumption expenditures (PCE) metric.
Still, it is the trend in the breakeven rate that the Fed has its eye on, rather than the absolute percentage. And while the PCE and CPI readings may differ from month to month, the measures are almost perfectly correlated over time.
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