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
In a recent interview with CNBC's "Futures Now," the Euro Pacific Capital chief said that while themarkets have rallied since Trump's election victory, the very same economic issues that got him elected will be the exact same one's he'll find himself unable to solve.
As Schiff sees it, Trump pleased voters with his promise to cut taxes and increase spending in some key areas. However, his proposed policies will hurt the economy rather than make room for improvement.
"He doesn't want to tackle, for political reasons, the real problems that are underlying the economy," Schiff told CNBC.
Namely, the fund manager predicted that Trump's economic policies will exacerbate already-existing trade and fiscal deficits, and bring about inflation that the Fed will likely be pressured to solve. This may even involve going against the idea of a rate hike, which many had pegged at a more than 90 percent chance of occurring in December.
One of Trump's signature plans involves massive public spending on roads, bridges and other U.S. infrastructure. Meanwhile, economists nearly unanimously expect a tax cut that could rival the ones signed by former president George W. Bush.
"We're going to have to do even more quantitative easing (QE)," said Schiff, explaining that the central bank will have to return to its most potent weapon: Super-easy liquidity to pump-prime the economy.
"The Fed is going to have to reverse and cut interest rates, and it's not going to create economic growth, but it is going to put pressure on inflation that is already now above what the Fed supposedly says is its supposed target," he added.
In other words, Schiff believes that even if a December rate hike does happen, it's already "too little, too late" for the economy.
According to him, the Fed will still be faced with the question of how to finance the deficits that Schiff says will emerge, especially in light of the global bond rout that took place after the election.
The combination of outcomes from Trump's policies leads him to believe that a market "crisis" is on the way, and the crash could be even bigger than the one in 2008.
Stocks continued their post-election rally, with the Dow and small-cap stocks setting new record highs last week.
Next week's OPEC meeting could send oil back to $50, but investors may want to curb their enthusiasm.
In a note from RBC Capital Markets on Tuesday, head of commodity strategy Helima Croft wrote that OPEC would "stick the landing" at its Nov. 30 meeting and finally draw a long-awaited agreement. The main player will be the world's largest oil producer, Saudi Arabia, as Croft believes that the Saudis now have incentive to agree to production cuts.
"I think the burden is going to be heavier on Saudi Arabia [because they have] key policy priorities, they want the IPO of Saudi Aramco," Croft said Tuesday on CNBC's "Futures Now."
Saudi officials have been pushing for a 2018 IPO listing for Saudi Aramco, the world's biggest oil company. Croft believes the Saudis need oil to return to $50 to stay on track for the listing. She said Saudi officials have already began talks to cut production by 1.1 million barrels to boost crude prices.
U.S. benchmark West Texas Intermediate crude was at $47.65 a barrel on Wednesday morning. But while oil may just return to $50, which is seen as an important technical level for investors, Croft thinks that Saudi concerns about the U.S. will clip the wings for any higher rally.
"Why I don't think they're aiming for $60, $70, or even $80 right now is they want a muted recovery," said Croft. The Saudis "keep talking about $50 oil because I think they are concerned that if this rises too fast, you'll get U.S. production roaring back."
Crude has climbed almost 5 percent in the past week, but the rally came as production in the U.S. jumped. While oil surged more than 4 percent on Monday, the commodity slightly reversed its gains on Tuesday over supply concerns and worries that OPEC still won't strike an agreement to limit production.
Nevertheless, Croft believes the oil cartel will find some middle ground next Wednesday. With Saudi Arabia taking the "lion's share" of production cuts, other oil producers like Iran and Iraq could also be pressured to follow suit.
Crude is currently up almost 30 percent year to date, though the commodity has struggled to break too much beyond $50 this year.
It's the most wonderful time of the year —for stocks, that is.
All major U.S. indices are sitting near all-time highs, and one technician thinks there's even more room to run. The dynamic inspired by President-elect Donald Trump and the aftermath of the U.K.'s vote to quit the European Union appear to be converging, which may be good news for investors.
All told, it suggests the traditional "Santa Claus" rally that investors see around the holidays could easily become the 'Santa Trump' surge instead.
"We have an overlay of the post-election rally with the post-Brexit rally in the S&P and it is a pretty good fit," explained Bank of America's top technician Stephen Suttmeier on CNBC's "Futures Now" in a recent interview. "The market is going up at about the same pace as it did after that big risk-off move going into Brexit."
Indeed, in the eight days following Brexit and the U.S. presidential election, the S&P 500 Index gained 3 and 2 percent, respectively. The Chief Equity Technical Strategist for Bank of America Merrill Lynch went on to detail that the similarities in movement in both instances went beyond price action.
For Suttmeier, the key underlying indicator that accompanied both drops was fear in the market. The strategist compared the VIX, otherwise known as the market's "fear gage" and the VXV against U.S. equities.
The VXV/VIX ratio shows expectations of volatility three months out, versus expectations for volatility in the near term. Measurements above 1.2 indicate an overbought market while a reading of 1.0 or below indicated an oversold market, which indicates fear in the market on a tactical basis.
Heading into both the election and Brexit, "investors were fearful. But, take a look at what's going on right now: You have a lot of stocks going to new 52-week highs ahead of the averages. Same thing happened right after Brexit."
Suttmeier also noted the importance of seasonality when making the bull case for stocks. He explained that Brexit occurred in the midst of the second-best three-month period of the year.
"We're now starting the best three-month and six-month period," said the technician, discussing November through January and November through April, which are historically strong periods for the market.
"Seasonality supports the case for a rally. There is a little resistance on the S&P around 2,180 to 2,194, but I do think we can surpass that and trend up into the 2,200 to 2,230 range," he added.
Suttmeier also noted that he and his team have yet to see diminished market breadth despite the recent rally.
"Pay attention to the breakout that we just had last week," noted Suttmeier. "The downtrend line from August is a support level that comes in roughly around 2,150. I think we're embarking on a seasonal rally with some pretty interesting groups leading like financials and semiconductors, which look fantastic."
He added: "We have a lot of good cyclical strength in this market. Until we see internal deterioration in the market, meaning a less broad-based rally, we have to stick with the gains. We have to stick with the view that we're going to rally."
History shows the only place for interest rates to go from here is higher — according to veteran technical analyst Louise Yamada.
Looking at a chart of U.S. interest rates over the last two centuries, Yamada pointed to a bottoming formation that has been in place for the last several years.
"We've been looking at the process that we think has been taking place over the last six to eight years in our interest rates, and we think now that the 2012 low probably is going to prove to be the low just the way 1946 proved to be the low in the last cycle," the head of Louise Yamada Technical Research Advisors said Thursday on CNBC's "Futures Now."
"I think it would be very healthy [to raise rates]," explained Yamada. "We are definitely watching 3 percent because that's going to be the ultimate level at which we can definitively say that rates have reversed." That 3 percent also corresponds with the 1980 downtrend on Yamada's chart.
"We are looking at the formation of the higher low, and the 10-year note would have to put in place a slightly higher high to define the real technical evidence of the reversal," she added.
Ultimately, Yamada said that higher rates will boost equity prices in the near term, as past cycles have signaled a boom in stocks and the economy.
"The early stage of a bull market can be accompanied by the initial rising rate cycle," she said. "It isn't until you get to about 5 percent that you start having problems."
The S&P 500 closed Thursday within a fraction of its all-time high.
In the aftermath of a harrowing election cycle, JPMorgan is urging investors to avoid making moves based on emotion and politics as the so-called Trump rally takes a breather.
"We are seeing a bit of a pause. There was a very sharp reaction after the election," JPMorgan's Stephen Parker said Tuesday on CNBC's "Futures Now." "What you're generally seeing is a rotation from the playbook of the last couple of years that was all about a low-yield, low-inflation monetary policy driven world to a world where you're looking at higher rates and higher inflation."
The head of thematic equity solutions for JPMorgan Private Bank went on explain that with these developments in mind, investors should look to pro-cyclical parts of the market like banks and health care. And, while gains for those sectors have taken a pause in recent sessions, Parker maintains that outlook is still positive. Thanks to strong earnings potential and subsiding fears that these sectors will be heavily regulated under President-elect Donald Trump, Parker says it's now time for Wall Street to focus on the big picture.
"In times like this, where politics and macro uncertainty have driven major market swings, the most important thing for clients to remember is to stick to a long-term plan," Parker said in a note to CNBC. "Emotional investing at a time like this can be very detrimental to returns."
Parker noted that, on the Monday after Brexit, there was nearly $10 billion in outflows from global equity funds, one of the largest redemptions in the last decade. And, since then, stocks are up nearly 10 percent.
With this in mind, Parked urged investors to capitalize through buying the dips.
"Long-term investors could be getting a good opportunity to add on weakness," Parker concluded when discussing a strategy for the next 12 to 18 months. "While dollar strength could be a headwind, emerging market central banks and economies are much better positioned to deal with what we believe will be a modestly stronger dollar, thanks to prudent policy action and the recovery in commodity markets."
Given this, Parker believes that, if interest rates move higher because of improving growth and global reflation, that emerging markets should be well positioned to benefit. He noted that emerging market valuations have underperformed U.S. equities by over 100 percent from 2010 to 2015 and therefore look attractive with better growth prospects that could serve as the catalyst to reverse recent trends.
There's a key technical level which could disrupt the market rally sparked by Donald Trump's win, according to a widely followed market watcher.
"If you look at the long-term chart of the S&P [500 Index] futures, this week we actually saw a test of the long-term support trend line back to 2009. That only happened after-hours and in overnight action,"said NorthmanTrader founder Sven Henrich recently on CNBC's "Futures Now."
However, he added "that confirms this trend line. It's a very steep trend line. It's an important trend line."
Henrich estimated there's 100 percent chance that this line will be breached — it's just a matter of time.
"We just tested this trend line this week, hence the bounce made sense. Should we break below this week's lows then markets will get severely tested," said Henrich,
Henrich argues investors are seeing 'quite the panic sector rotation' right now. And, it's been helping to drive the Dow to all-time highs. He's also forecasting volatility levels are bound to increase significantly going into next year.
"While we see this massive rally in the last week, we need to be keeping in mind that on the short-term chart, we actually have broken the February trend line that would support from February into Brexit," said Henrich.
"We broke it in September and now we are re-testing it from the underside. Until we break above that, this rally is still very suspect," he added.
There's another element to the market which concerns him. Henrich predicts FANG stocks, otherwise known as Facebook, Amazon, Netflix and the former-Google, are positioned to see a lot of trouble because they are too stretched.
His observation comes amid growing speculation that President-elect Trump's policies could hurt technology companies.
"If you look at the Nasdaq 100 Index which made new all-time highs this summer, it was really just a few stocks that have been driving this," said Henrich.
"Ten stocks in the Nasdaq 100 comprise of 50 percent of the market cap, and these stocks are now selling off here... Since they are very high weighted in cap, that could cause some damage on the indices."
As investors wait with bated breath to find out who the 45th U.S. president will be, Wells Fargo delivered a calming message: Equities are heading higher with either Hillary Clinton or Donald Trump in the White House.
"We've been telling our clients for a year: The trajectory of the economy will remain the same during the next 12 to 18 months of the new president's term no matter who is elected," Scott Wren explained to CNBC's "Futures Now" on Election Day. "The market might worry or think about what might happen two or three years down the road based on who is president, but only for a very short time. The market will quickly get back to trading on what the economy and earnings are going to look like over the next six to 12 months."
On a case-by-case basis, the senior global equity strategist for Wells Fargo Investment Institute said that, with a Trump victory, there would likely be some short-term market downside, but that it would not be comparable to the severe drop that followed Brexit.
If there's one thing most traders could agree on before the election results came in, it's that Nov. 9 was going to be a busy day for the markets.
That goes doubly for day traders, who buy and sell stocks on small movements in the market and expect an especially wild few hours.
"It's going to be a day of extremes," said Jake Bernstein, author of "The Ultimate Day Trader," on Tuesday.
Based on what Bernstein had seen over the last couple of days — the S&P 500 has shot up 2.6 percent since Monday's opening, after falling a cumulative 3 percent over nine days — he expected Wednesday to be extremely busy. The market has had its best two-day stretch since Brexit, after its worst consecutive-days negative stretch since 1980.
And that volatility came as many professional fund mangers predicted along with everyone else a Clinton win. The Clinton wins-stocks rise scenario is history — history not made. So it's on to the fear that equities could tank with Trump being declared the victor. But intraday trading may be more complicated.
Call it a crude show down for the ages.
Two of the most respected commodities experts on Wall Street duked it out recently over oil's next stop, and whether OPEC would be a catalyst for driving prices higher or lower.
In one corner, "Commodities King" Dennis Gartman maintained that OPEC cheats and that the word of the cartel should not be trusted.
In the other corner, Helima Croft of RBC Capital Markets reiterated that the Organization of the Petroleum Exporting Countries will strike a deal, which will ultimately drive the price of crude higher.
"It's going to be very difficult to get WTI much below $40," Gartman told "Futures Now" last week.
However, while he noted that a panic liquidation could driver prices towards $38, Gartman maintained that $52 oil would be a difficult target to achieve given the current climate. "We may well be stuck within a broad range. Call it $38 on the low side and $52 on the high side."
Following a segment on CNBC on Tuesday, Gartman again cast his doubts over OPEC's rhetoric and emphasized that the cartel, "cheats no matter what happens. They have no choice. And I think that cheating, which has been endemic to OPEC since its inception, will simply continue."
Croft, who has been bullish on oil throughout the course of 2016, took issue with Gartman's assessment of OPEC's practices.
"We remain convinced that OPEC will stick this landing," explained RBC's Global Head of Commodity Strategy, ahead of the upcoming OPEC meeting on November 30th.
"Yes, left to their own devices, OPEC countries will cheat. But, what I think is different this time is that almost all of the OPEC countries are flat out producing."
Given the current levels of production, Croft said Iraq likely doesn't have many more barrels to put on the market. Additionally, she noted a drop in production for Venezuela.
The one wild card appears to be Saudi Arabia, the world's largest oil producer. Croft insisted the Kingdom is ready to play ball.
"Saudi Arabia wants this deal to fly because of their own domestic priorities," explained Croft in regard to how the nation's economy is largely dependent on steady oil prices.
Specifically, with plans to take Saudi Aramco public, the Kingdom can't afford volatility in the coming year as the offering could be worth as much as $2 trillion in a stable market.
"I expect them to get the deal done. If Venezuela could cheat, they would, but I think they're all out of bullets at this point," Croft said.
Oil prices could be heading lower as OPEC dithers, the election raises fears and traders stand on the sidelines.
OPEC will dictate where oil prices head for the remainder of the year and into 2017 and the organization's failure to come to an agreement at its recent Vienna meeting is telling - the major sticking points are the same ones that have been in contention since negotiations began.
Everyone wants to boosts prices by cutting production but no one wants to actually cut. Iran wants to return to pre-sanction production levels, Iraq claims it needs the funds to help fight its war with ISIS, Nigeria along with Venezuela are facing economic hardship and in both places are trying to replace production lost due to conflict or lack of resources to maintain equipment.
At the last meeting, the consensus was that if any production cuts are to be made, the Saudi's will have to do the majority of the lifting, and they are not ready to commit to that because they face their own budget issues and dwindling cash reserves.
If OPEC fails to reach an agreement before or at their formal meeting at the end of November, then oil prices will fall to the low 40's and possibly the mid 30's. Driving this drop will be the factors that drove it lower at this time last year: too much supply and falling demand as we head into winter and the fallout from a potential Fed rate hike, which will mean a stronger dollar and lower equity prices.
Many traders are taking a pause for the remainder of 2016, anxious not only about OPEC's moves but also about the presidential election. Both candidates' policies could prove negative for oil prices.
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