Futures Now: Blog


  Monday, 14 Jul 2014 | 8:53 AM ET

The new big worry that's consuming Wall Street

Posted By: Alex Rosenberg

It's Wall Street's latest worry: The current state of the American consumer.

Despite a blockbuster June employment report, buffeted by positive auto sales and same-store retail sales numbers, many investors and strategists worry that American consumers just don't have the cash, or the willingness to spend it, that is required for the recovery to continue.

These concerns have recently come to the fore, as companies from Wal-Mart to Rent-A-Center have warned that slack consumer demand will weigh on results.

Read MoreUS job rebound not spurring spending, Wal-Mart's Simon says

In a filing released on Thursday, Rent-A-Center CEO Robert Davis said that "Macro-economic pressures continue to burden our financially constrained consumers contributing to softer than expected demand in our U.S. business segments. Consequently, revenue and earnings for the second quarter 2014 will not meet expectations." (In response, the stock dropped by more than 10 percent on Friday.)

Some on Wall Street are ringing the alarm bell as well.

Nicholas Colas, chief market strategist at ConvergEx Group, warned on Friday that there's a chance stocks will get rattled by "a shallow U.S. recession starting early next year," caused by "slack consumer spending and a slower labor market," due in part to the Federal Reserve reducing its stimulative measures.

"From a jobs perspective, things are slowly healing. But I do think that the desire to spend is still somewhat sketchy," he told CNBC.com. "We're still at low levels of confidence compared to other recoveries."

Read MoreThe end of QE will cause 15%-20% correction: Expert

Betting on the consumer has not been a great call this year. The S&P 500's consumer discretionary sector is up less than 1 percent in 2014, compared with a 6 percent rise for the index as a whole, making it the single worst-performing sector. (Of course, this comes after several years of outperformance.)

»Read more
  Thursday, 10 Jul 2014 | 2:14 PM ET

The end of QE will cause 15%-20% correction: Expert

Posted By: Alex Rosenberg

In the Federal Open Market Committee's June meeting, the Fed decided that it would likely look to end its asset purchasing program (known as quantitative easing, or QE) with a $15 billion reduction in monthly purchases in October, according to the meeting minutes released on Wednesday. The markets took the news in stride, and stocks actually closed higher on the day.

Read More Fed Minutes: QE likely to end with final $15B reduction in October

But Peter Boockvar, chief market analyst at The Lindsey Group, told CNBC's "Futures Now" that equity investors are making a huge mistake.

"I do not" think the market can handle the end of QE, Boockvar said on Thursday. "QE in its current form was a trillion-dollar annualized stimulus program that's going to zero. It magically turned 1.9 percent GDP growth last year and mid-single-digit earnings growth into a 30-percent-plus gain in the S&P. I think, this year so far, the market's been OK with it because they've been believing that the Fed can somehow make this seamless transition from the QE to a self-sustaining, escape-velocity-type economic recovery. And I think, from what we've seen so far in the first half of 2014, that's not really the case."

Read MoreMarc Faber: The asset bubble has begun to burst

For Boockvar, who has long been a critic of the Fed and a bearish voice on the markets, the awakening will not be pleasant.

"I think there's going to be sort of a bell ringing that, wow, this program is ending, the economy is still growing in fits and starts, and what has lifted asset prices to such an extraordinary extent is now going away. And I thought the market would have learned its lessons after QE1 and QE2 ended, when the markets fell 15 to 20 percent, and think, 'OK, well we don't want that to happen again, let's prepare.' But I'm afraid that we're going to rally right into the end, only to tip over again."

»Read more
  Wednesday, 9 Jul 2014 | 4:33 PM ET

Market will crash, just don't know catalyst: Faber

Posted By: Michelle Fox

The market is setting up for a big decline that could be as bad as the crash of 1987, according to Marc Faber, known as "Dr. Doom." He just isn't sure exactly what will set it off.

"The problem with crashes, you never know beforehand precisely what is the catalyst," the publisher of the Gloom, Boom & Doom report told CNBC's "Closing Bell."

It could come from the credit market, equities being perceived as too expensive or a geopolitical event, he added.

His comments came a day after he told "Futures Now" that the asset bubble has begun to burst.

Read MoreMarc Faber: The asset bubble has begun to burst

"I think it's a colossal bubble in all asset prices, and eventually it will burst, and maybe it has begun to burst already," Faber said Tuesday.

»Read more
  Wednesday, 9 Jul 2014 | 11:47 AM ET

Faber and Schiff may be just what this rally needs

Posted By: Alex Rosenberg

Will the masters of disaster ever be proven right?

On CNBC's "Futures Now," "Dr. Doom" Marc Faber presented a dire assessment of a broad range of investments, from the American stock market to bonds and real estate, proclaiming that "it's a colossal bubble in all asset prices, and eventually it will burst, and maybe it has begun to burst already."

The publisher of the Gloom, Boom & Doom report, who is now calling for a 30 percent crash in the S&P 500, put it even more succinctly at the very end of the interview Tuesday: "We're all doomed! We're all doomed!"

Read MoreMarc Faber: The asset bubble has begun to burst

That view was echoed by Peter Schiff, CEO of Euro Pacific Capital, though the gold bug is more concerned about a decline in the value of the U.S. dollar, which would help boost gold prices.

"I think we're saying the same thing, just with a different accent," Schiff quipped. "I would agree with you that it's a bubble, but if the Fed is determined to fill it with more air, don't you think they may succeed in slowing down the process and so the nominal decline in stocks may not be nearly as great as the decline in the value of the dollar."

Read More Schiff makes case for gold, but Gartman not buying it

But it's worth noting that these calls are not exactly new. Schiff has long been calling for a demise in the dollar that will spike gold, and knows well the power of the word "crash" – he has authored four books with that word in the title. And while the gold trade worked out for many years, those who have forsaken stocks and bought gold over the past two years have clearly made a terrible decision.

Faber has been calling for a major, 20-percent-or-more correction for years. As Bill McBride asks rhetorically on his Calculated Risk Blog, "Since the market is up 40% since his 2012 prediction, shouldn't he be expecting something like a 50%+ decline now?"

Still, Faber and Schiff continue to be popular market voices. Perhaps the American taste for hearing about market crashes is similar to the taste for disaster movies.

"Americans love a stock market crash for the same reason many of them go to Nascar races," said Scott Nations of NationsShares.

"We are addicted to 'big stories,'" added Jim Iuorio of TJM Institutional Services. "We don't want to hear that 'it's a cold winter,' we want to hear that 'it's the coldest winter on record.' The same thing holds true for predictions of the stock market. Fear sells."

Still, Iuorio says there might be something to all these ultra-bearish calls.

"I believe that we are increasing the potential for a dramatic correction in equity market. The fact that the global central bank 'put' has emboldened investors is not a good thing." Iuorio said. "The longer we put off a correction, the greater the potential for a violent move. But I think the bubble is in its early stage, as I don't see mom and pop borrowing money to buy stocks."

»Read more
  Tuesday, 8 Jul 2014 | 3:45 PM ET

Schiff makes case for gold, Gartman not buying it

Posted By: Alex Rosenberg

Peter Schiff, the CEO of Euro Pacific Capital, is one of gold's biggest proponents; Dennis Gartman, the editor of "The Gartman Letter" who is sometimes called "The Commodities King," refuses to buy the metal in U.S. dollar terms.

So who will be proven right?

On Tuesday's "Futures Now," the two gold experts debated the issue directly.

"Most people on Wall Street were very impressed by [the jobs numbers] yet the price of gold did not surrender any of the gains in the previous week," Schiff pointed out.

"So to me, we're consolidating those gains, we're putting in a very formidable bottom in gold. We still have all of the naysayers, the Goldman Sachs, Societe Generale, all these guys that were negative calling for $1,100, $1,000, they're digging in their heels, they're just as bearish as they were at the beginning of the year despite the fact that they've been wrong for six months. So you have a lot of negativity, but I think the technical picture is improving rapidly for gold."

Read More These 3 charts tell you to buy gold: Top technician

»Read more
  Tuesday, 8 Jul 2014 | 2:08 PM ET

Marc Faber: The asset bubble has begun to burst

Posted By: Alex Rosenberg

It's the question investors everywhere are wrestling with: Are asset prices in a bubble, or do they simply reflect the fact that the global economy is growing once again?

For Marc Faber, editor of the Gloom, Boom & Doom Report, the answer is clear. In fact, he says the bubble may already be bursting.

"I think it's a colossal bubble in all asset prices, and eventually it will burst, and maybe it has begun to burst already," Faber said Tuesday on CNBC's 'Futures Now' as the S&P 500 lost ground for the second-straight session.

Read More Welcome to the Everything Boom, or maybe the Everything Bubble

Of course, Faber has long been expecting a market decline. But for the precise reason that stocks have simply continued to rise, he's now become even more bearish.

"Obviously I've been wrong in the sense that I expected a correction to occur over the last two years, and it hasn't happened since October 2011, when the S&P was at 1,074. We've gone up in a straight line, without a larger correction than 11 percent, and I think we're not going to have a correction, but we're going to have a bear market," he said.

Marc Faber and Peter Schiff may be just what this rally needs

(Watch Marc Faber discuss his call Wednesday on "Closing Bell" at 3:10 pm ET)

»Read more
  Monday, 7 Jul 2014 | 11:56 AM ET

These 3 charts tell you to buy gold: Top pro

Posted By: Alex Rosenberg
Tom Grill | Age Fotostock | Getty Images

Gold has gone nowhere fast over the past two weeks, trading in a mere $30 range. But Carter Worth, chief market technician at Sterne Agee, predicts that the metal is about to heat up—beating a path to the upside that leads gold prices up to $1,500 per ounce, which would be the highest level since April 2013.

When it comes to gold, "We remain new buyers and would be new buyers right here, in anticipation of the current 'bearish-to-bullish' reversal continuing and gaining urgency as new participants are drawn in," Worth wrote in a Monday note.

Read More Gold suffers as speculation shifts to US rate hikes

So what, specifically, does this technician see that he likes?

First of all, gold is up about 5 percent in a month, and this rise has been technically significant.

"The strength of the past few weeks represents a tentative break about the down trendline that's been in effect since mid-2012," he wrote, and illustrated with the below two-year chart of gold.

»Read more
  Sunday, 6 Jul 2014 | 3:51 PM ET

After big jobs number, bulls proclaim ‘off we go!’

Posted By: Alex Rosenberg

Bears have long complained that while Wall Street is partying, Main Street is struggling—proof, they said, that stocks are overvalued.

Thursday's jobs report provided just the latest evidence that that's really no longer true.

288,000 jobs were created in June, and the unemployment rate fell from 6.3 percent to 6.1 percent, according to the latest data from the Bureau of Labor Statistics. Average hourly earning ticked up to $24.45. And while some have fretted about the 523,000 decline in full-time workers (on a seasonally adjusted basis) registered in the noisey houshold survey, the average weekly hours of all private nonfarm employees held steady at 34.5.

The report, which shows plus-200,000 job growth for the fifth straight month, is seen as a relief after the first quarter GDP growth number was revised to show shrinkage of 2.9 percent.

Just like that bowl of Goldilocks' porridge, US payrolls just right

"The economy's improving, and we're at in a good cyclical place," said Mark Dow, a money manger who writes at the Behavioral Macro blog. "A lot of people who are tempted to look at things glass-half-empty kind of got sucked in by the negative 2.9 GDP number, but this drives a stake thorugh the heart of people who are hoping that the economy " is really bad.

"The economy went from anemic to slugglish, and maybe if we're lucky it will go from sluggish to modest," he added.

Stocks certainly responded positively to the news. The S&P 500 and Dow Jones Industrial Average both promptly rose to all-time highs, with the latter breaking the much-watched 17,000 mark.

Dow 17,000: Who led & lagged the last 1,000 points

"As far as stocks go, I don't really see any need to get out of longs yet," said Jim Iuorio of TJM Institutional Services. "Right now, it seems like we're in the perfect situation, where the numbers are good, the Fed is in no hurry to get away, and I think that probably should continue for a while."

Michael Block, chief strategist at New York-based broker-dealer Rhino Trading Partners, echoed that sentiment.

"Off we go," he said. "It's a good-looking number. And meanwhile, let's face it, the Fed is not focused on any kind of economic thresholds."

»Read more
  Wednesday, 2 Jul 2014 | 1:46 PM ET

Here’s how incredibly quiet stocks are right now

Posted By: Alex Rosenberg
Justin Horrocks | iStock | Getty Images

It is no secret that markets have been almost eerily quiet for some time. But there's quiet—and then there's dead.

On Wednesday, the S&P 500 is trading in a mere 0.2 percent range. If that sounds small, it is. In fact, according to technician Jonathan Krinsky of MKM Partners, this range ties Dec. 30, 2013, for the title of narrowest S&P 500 range going back to 1992.

Wednesday's S&P range is also tied for fourth with Dec. 30, 2013, on the list of four narrowest ranges dating back to 1982.

The calendar certainly has something to do with it. The equity markets close at 1 p.m. on Thursday, ahead of the July Fourth holiday. The other recent day with similarly mild trading came a day before New Year's Eve.

That said, the tight range comports with a broader and much-discussed trend in 2014: declining volatility.

"It's a very frustrating situation from a traders' perspective, and not just because of less opportunities to make money," said Chicago-based trader Jim Iuorio. "Traders know that markets need to occasionally release built-up pressure in the form of a correction. When this does not happen, particularly for inorganic reasons, the pressure continues to build."

»Read more
  Tuesday, 1 Jul 2014 | 3:37 PM ET

Gold will be the second half's big winner: Trader

Posted By: Alex Rosenberg

In the first half of 2014, coffee was the best-performing commodity, rising about 50 percent. So what will be the big winner in the second half?

Jeff Kilburg of KKM Financial is eyeing gold, saying that it reminds him of the coffee trade.

"Just a month ago, on June 3, we had that $1,240 low in gold. Coffee got thrown to the curb just like gold," he said on Tuesday's "Futures Now."

Read MoreThe doctor is in: Copper rises to 16-week high

So why will gold take off now, after rising about 8 percent in the first six months of the year?

"Now all of the sudden there's an inflation play potentially, there's geopolitical risk, and the third head of this monster which no one has talked about and hasn't been deserving of talking about for quite some time is the safe haven trade," Kilburg said. "It sounds like I'm crazy, it sounds like maybe I've got a little too much coffee in me here, as we have all-time highs in the S&P 500, but gold is going to go higher. Technically I like it as well."

Read More Payrolls to test gold's resilience after gains

»Read more

Contact Futures Now: Blog

  • Showtimes

    Watch Futures Now Tuesdays & Thursdays 1p ET exclusively on cnbc.com!

Follow Futures Now: Blog

Sponsor Links

  • CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.

  • Take your trading to the next level with a platform that lets you trade stocks, options, futures and forex all in one place with no platform or data with no trade minimums. Open an account with TD Ameritrade and get up to $600 cash.