Wall Street fixture Art Cashin sees trouble for the rally. » Read More
Veteran market watcher Ed Yardeni looks at commodities to determine the stock market's next move. » Read More
By: Annie Pei
Crude's about to rally even higher, according to one technician who called the recent bounce in oil. » Read More
A Wall Street portfolio strategist who urged investors to believe the rally is now predicting the bull market's eventual demise. » Read More
After more than a year of back-to-back quarters of earnings declines, Jack Caffrey of JPMorgan Private Bank says the picture is "finally turning higher" and that has him ringing the register on stocks.
As of Thursday's close, 23 percent of S&P 500 firms reported, with 79 percent of companies coming in above estimates, according to Thomson Reuters. If all remaining companies were to report earnings in line with analyst predictions, EPS would be up 1.1 percent from the same time last year, a reversal from the 0.5 percent drop that was expected at the beginning of this month.
For Caffrey, the markets will soon reap the benefits of earnings momentum, especially given that many of the sectors that had previously struggled during earnings are finally starting to look up.
"[The sectors struggling during earnings had] been the energy sector, the industrials and the materials sectors," Caffrey said Thursday on CNBC's "Futures Now." "Those sectors are starting to find some strength, some support and [some] global growth environment."
But as much as Caffrey believes that earnings for the energy sector will be better this time around, some of the sector's biggest names aren't set to report earnings until next week with Chevron and ExxonMobil in the lineup. Plus, the sector's performance has Caffrey still encouraging investors to approach it with caution.
"[Energy is] one of the best performing sectors year to date. It's also had the worst earnings year to date," he said. "It speaks to a market willing to look through the next three, six, maybe even 12 months in terms of energy. The fact that it's rallied so much as both crude and stocks of late, I think speaks to some increased enthusiasm, but I wouldn't hang my entire market call on a 7 percent sector in the market."
Caffrey believes that the market could still move up another 3 to 4 percent.
"Gold reacts when Trump's chances of winning rise above 40 percent or below 20 percent in the mainstream media," RBC's Chris Louney explained Tuesday on CNBC's "Futures Now." "We've seen this peak-to-trough matching, but only on those limited bands when his chances really fluctuate."
Indeed, both of Trump's highest polling positions in the past five months coincided with highs for gold. In early August, when the precious metal was trading near $1,400, Trump's chances of victory were at 50 percent, according to FiveThirtyEight. And, in late September, when Trump's chances were at 46 percent, gold hit a high of $1,339.
On the flip side, Trump's recent decline in the polls also shadowed low points for gold: the candidate's fall below a 20 percent chance of winning came alongside a 7 percent drop for bullion.
Louney emphasized that, over the course of the past year, the yellow metal glittered through July thanks to monetary policy and Brexit-related uncertainty. However, he now feels that political risks will likely be the key catalyst for gold's movement in the coming month.
"We note that gold prices receded by approximately $10 per ounce following the first U.S. presidential debate and were flat following the second debate, in line with the respective mainstream media reviews of the two debates," Louney said in a recent note.
"This led us to evaluate how gold has performed versus the likelihood of a Trump presidency. A gold positive scenario occurs if Trump's chances rise above 40 percent in mainstream media given possible resultant changes in global risk appetite."
Trump's chances of winning have increased slightly this week as the Republican candidate goes head to head with rival Hillary Clinton on Wednesday night. The rise coinciding with a three-day winning streak for the precious metal.
Investors looking for a buy should still look to gold, even as the U.S. dollar rallies, according to commodities king Dennis Gartman.
While the greenback has strengthened in the past week, Gartman and other market watchers argue that bullion is still interesting to watch given its short term trends versus the dollar.
In a research note this week, Wells Fargo Investment Institute said the commodity appeared "oversold", and was ripe for a bounce back in price.
"I find it fascinating that gold has held reasonably well, even tries to rally as the dollar has gotten stronger over the course of the past six or seven days," said Gartman Tuesday on CNBC's "Futures Now."
The dynamic, he said, is "atypical, and I think it tells me something." However, the "better trade here," Gartman says, is to own gold in terms of the euro currency rather than the dollar.
Gartman is generally bullish on the dollar and should the currency go up, gold prices are at risk of dropping down. The euro, by comparison, has struggled against a basket of currencies including the dollar.
When it comes to a flat U.S. market that appears handcuffed by indecision, one of Wall Street's top market watchers says unclear monetary policies are to blame.
"The Fed has a problem," explained Peter Boockvar on CNBC's "Futures Now" on Thursday. "The unemployment rate is at 5 percent and inflation is now rising, so based on that, they should be raising interest rates."
However, The Lindsey Group's chief market analyst noted that, given the recent flow of poor data, the Fed would theoretically have a better case to revert to an even more dovish approach.
"Economic growth is falling to 1.5 percent. The Atlanta Fed, two months ago, was predicting 3.8 percent growth. Now, they're predicting 2.1 percent growth," warned Boockvar. "Under those scenarios, the Fed should actually be cutting interest rates. They're really stuck here."
Amid the conflicting data, Boockvar has been further discouraged by the Fed's rhetoric following September's meeting.
"The minutes told us nothing," complained Boockvar. "We came out of the last meeting and, in the press conference, Yellen said the case for a rate hike had strengthened. Nothing seems to have changed that based on a lot of the speeches. We know it was a close call based on three dissenters, and the minutes basically confirmed that."
Indeed, Boston Fed President Eric Rosengren, Cleveland's Loretta Mester and Esther George of Kansas City all went against the Federal Open Market Committee's decision to keep rates unchanged.
Now, despite this hawkish resistance, Boockvar anticipates that the Fed will continue to kick the can into 2017. This is mainly based on Philly Fed president Patrick Harker, who recently cited "market instability" before the election.
"We have a Fed president, albeit nonvoting, who is saying essentially, 'Let's wait to see who the next president will be before we hike, because they may have certain economic policies initiated that we may need to respond to or maybe not, but let's wait anyway,'" concluded Boockvar in a recent note.
Hillary Clinton has the presidential election in the bag, but it won't stop a recession from coming, says Reagan administration aide David Stockman.
The former director of the Office of Management and Budget and author of "Trumped! A Nation on the Brink of Ruin" believes that the economy is already in trouble, especially given current macroeconomic trends.
"Growth over the last four quarters has averaged 1.3 percent, that's barely stall speed [and] we have inventories building up," Stockman said Tuesday on CNBC's "Futures Now." "If you look at concurrent indicators of the economy such as freight shipments and so forth, they're weak and negative. Capital spending is down double digits and exports are down and so forth."
According to Stockman, this time the economy can expect "no rescue" to come from Washington should it sink and the election will be the main reason. While many analysts believe the market will pop given a Clinton victory, Stockman believes the economy is in trouble regardless of the result.
This is because Stockman predicts Congress will be "totally dysfunctional" once Clinton is in office, as lawmakers may not be able to come together and work out solutions leading to economic growth given how many divisions the election has caused.
What could make it even worse, according to Stockman, is political action taken against Clinton within the first few months of her presidency.
"I think it's going to be so contentious in the House because [Paul] Ryan has moved to protect his House majority, that it's very likely that investigations will begin immediately," he said. "And within any kind of excuse, they will try to impeach Hillary Clinton barely after she gets in office."
In other words, political gridlock and a Clinton impeachment could be on the way, and the market will be a victim.
"When the stock market stumbles and the economy begins to actually register negative growth, which I think is coming if not next quarter certainly in the first half of next year, there's going to be nothing below and the market is going to go through a massive contraction," said Stockman.
"I think it's going to be a very nasty time in the year ahead," he added.
An average of national polls tracked by Real Clear Politics has Clinton ahead of Republican nominee Donald Trump by an average of 6.5 percentage points as of Tuesday. The NBC News/WSJ and Atlantic polls have the Democratic candidate ahead by double digits.
If investors are looking for the next U.S. president to create stability in the markets, it's not going to happen—says former U.S. Representative Ron Paul.
Along with jitters about the Federal Reserve's next move on interest rates, investors are weighing whether Democratic contender Hillary Clinton or Republican nominee Donald Trump will be better for investors. The libertarian icon and former Texas Congressman suggested market players may not want to hold their breath.
"Politically speaking, there is going to be a lot more uncertainty and that may go into the markets," Paul told CNBC's "Futures Now" in a recent interview. "If people are depending on political stability to get the market going I don't think it's going to work out."
"I think [the election] is up for grabs. It will depend on how many people stay at home," he explained. "People are so disgusted with the two candidates that it's pretty hard to predict" which will prevail, he said.
For Paul, it doesn't matter what the outcome is in November, as he doesn't see much of a difference between the two parties.
"Nothing ever really changes regardless of which party wins. Governments keep growing, the deficits keep growing and the Fed keeps borrowing and printing more money," he said. "I don't expect a lot to change."
The fate of the market lies in the hands of the next president of the United States, says one JPMorgan strategist.
"If Hillary Clinton wins, which is what polls are pointing to, the market will probably react favorably," Nadia Lovell said Thursday on CNBC's "Futures Now." "But if Trump were to win, I think that would be a surprise to the market and the market continues not to like uncertainty."
In other words, the market could fall after a Donald Trump victory due to such an event being the more unexpected outcome, whereas a Clinton win is currently seen as the more likely event based on poll numbers. Recent polls show that Clinton continues to have a narrow lead over Trump ahead of Sunday's second presidential debate.
"We saw the same thing happen in Brexit where [there was] a momentary pullback in markets, and then markets rebounded off of that after uncertainty," added Lovell. "So we look for markets to be somewhat range bound through the election and then if we do see a Hillary Clinton win, we would expect a pop on the market."
Leading up to the election, Lovell believes that health care is a sector for investors to look into, as many health-care companies offer attractive yields. While health care has dropped more than 5 percent since hitting a year-to-date high in August, Lovell does see an opportunity to buy the pullback.
"The space is trading at a 10 percent dividend discount to the overall S&P, that's well below its historical premium of 13 percent," said Lovell. "A lot of that pullback has to do with the election noise around the sector, particularly around drug pricing."
In the long-term, Lovell expects the S&P 500 to rise 6 to 7 percent in a year's time.
Gold's shining rally has taken a beating, but prominent gold booster Peter Schiff believes that the precious metal's time isn't over, thanks to his expectation of Federal Reserve hesitation.
Gold was pacing for its worst day since December 2013 on Tuesday, plummeting almost 3 percent as the U.S. dollar gained due to increasing expectations that the Fed is set to raise rates in December.
Rising rates tend to be bad for gold because they make nonyielding gold look worse in comparison. Rising rates also tend to increase the value of the dollar, which also hurts gold because each more-valuable dollar can buy more gold.
Schiff sees gold's rough Tuesday as a result of investors selling the metal in anticipation of a rate hike. But Schiff believes investors have it all wrong. The Fed's main condition for interest rate hikes is that economic data, particularly employment and inflation data, have shown an improving economy.
"I'm certain that all this talk about a recovery is wrong," Schiff said Tuesday on CNBC's "Futures Now." "The recovery is an illusion, it's just another gigantic bubble."
Schiff believes that economic data has "actually gotten a lot worse since [the Fed] didn't raise rates in September." Add on the uncertainty surrounding November's presidential election, and Schiff is doubtful that the Fed will even risk raising interest rates this year.
"Everybody wants to go to heaven, but nobody wants to die, and that is the problem," said Schiff. "We're never going to have a real recovery until we kill this phony recovery, but for political reasons, that's not going to happen."
Schiff, who has runs a gold selling business, has long been a critic of the Fed's policies, and is perennially bullish on gold. He has long been predicting collapses in the U.S. economy and the stock market that have not materialized.
The fed funds futures market currently pins the chance of the Fed raising rates by December at 63 percent, according to CME Group's FedWatch tool.
More market highs are on the way, according to a Wells Fargo strategist, who added there are a multitude of reasons why investors should still buy stocks.
Scott Wren, senior equity strategist at Wells Fargo Investment Institute, sees the market rallying all the way through 2017. Just how high could markets go?
Wren believes the S&P 500 Index could touch 2,290, and possibly even a little higher by the middle of next year.
"You're talking an excess of 8 percent, and that's why we still like stocks," he said last week on CNBC's "Futures Now."
This is even in light of the uncertainty surrounding November's presidential election.
While investors may be wary of market chaos following the election, Wren actually believes that the anxiety is misplaced based on what he's seen in the past during election time.
"Whatever the result is, the market's going to trade off of that for [two to four] weeks maybe," he said. "But then the market's going to get back to [focusing on] earnings and the economy over the next 6 to 12 months."
He added: "Whoever is president is going to have virtually nothing to do with that, so I think this election effect is going to be very short-lived."
In fact, Wren predicts that the only thing that may stop a market rally in its tracks is a series of rate hikes by the Federal Reserve over the next year.
While Wren sees the Fed raising rates twice between now and the end of 2017, he does believe that the market can weather the event as it has already priced in a December rate hike. But more than two over the next year could give the market an unpleasant surprise.
The S&P 500 traded slightly higher on Friday, paring losses from Thursday when the financial sector brought U.S. markets down fairly significantly.
The commodities' strategist who called the rally in crude this week says more gains are to come, as Saudi Arabia appears ready to play ball and scale back production—a move likely to boost oil prices.
"This speaks to the economic realities of lower oil prices that are really biting Saudi Arabia," said top RBC commodities analyst Helima Croft on CNBC's "Futures Now" this week. The world's largest oil producer, along with other major oil producers, has struggled economically with crude languishing below $50 per barrel.
"Saudi Arabia really had to give considerable ground to accommodate the Iranian demands to get the deal done," Croft told CNBC. "This is more than just a freeze. It's actually cutting from current levels."
A deal of this nature represents the first reduction since 2008. Once announced, the deal sent crude prices soaring over 5 percent on Wednesday before closing the week above $48. Now Croft, who has been calling for $50 oil for since the 2016 lows, explained that her firm remains bullish through the end of 2016, with the notion that a floor is now in place.
"It can continue to be choppy based on weekly stats, rig count numbers and broader macro trends," she added. "But we think we are done with sub-$40, barring a major macro meltdown panic, and firms the case for 50's by year end and trending into the 60's next year."
Croft told CNBC that her firm expects the pact to hold with a belief that the Saudis are willing to bear the lion's share of the reductions needed to get down to 32.5 million barrels of oil produced each day globally by OPEC members.
The agreement, slated to go into effect in November, would require Saudi energy minister Khalid al-Falih to oversee major production cuts in order to help reduce nearly 1 million barrels from the market on a daily basis.
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