Our Contrarian Market -- In Two Headlines

Both of these articles are on Marketwatch this afternoon. Something seems a little askew and contrary between markets and reality. 

Stocks Soar On Nothing But Hope

These two stories were the major ones today. Just the hope of a cure for the COVID-19 coronavirus sent the Dow to a close up more than 700 points, despite that the manufacturer of the hoped-for cure, Gilead, indicated that data is not yet sufficient to expect a cure.

Meanwhile, the market ignored economic bad news today that is the worst since World War II:

Interestingly, Mark Hulbert Agrees

Hulbert expects the bottom in August of this year, and he summarizes in his article this way:
"When the bear market does finally hit its low, you are unlikely to even be asking whether the bear has breathed his last. You’re more likely at that point to have given up on equities altogether, throwing in the towel and cautioning anyone who would listen that any rally attempt is nothing but a bear-market trap to lure gullible bulls."

Top-Notch Investor Says Worst Is Yet to Come for Covid-19

In an article today on Marketwatch, investor Mark Spitznagel tells us that things are going to get much worse for stocks due to the coronavirus. He should know, since he recently achieved a 4,144% return in the month of March. He clearly stated also that the stock market is in a bubble, and that if the Covid-19 pandemic doesn't pop the bubble, something else WILL.
Look out beloooow!

It's Going to Get Worse As Unemployment Explodes Higher

Marketwatch has an excellent article this morning that explains what is likely coming soon. "BofA sees between 16 and 20 million job losses, which could send the unemployment rate, which stands at 3.5% as of February’s report, surging within a few months to 15.6%, which would by far outstrip the unemployment rate during the 2007-09 recession." 
Surprisingly, stocks are higher for the day, but showing signs of trending lower as I write this. Look out belooooow!

Fed Desperation Is Here

Corn Rebounds

Corn Crashes Despite New Trade Agreement With China

As details of the new trade agreement are released, markets are showing disappointment. Hence, grain prices are crashing!

If This Isn't a Bubble, What Is?

One of the attributes of a financial bubble is that they are never recognized as such until AFTER they pop!
So when will this one pop? Predicting the future is for prophets (with a "ph"), not profits (with an "f"). The important thing is to have an exit strategy, not to predict a "when will it happen" future.

Dollar Devastation

I suspect that this is the reason:
"Following the report that Trump and Powell discussed negative rates, among other things, the dollar has slumped to session lows, with the Bloomberg dollar index dipping below 1,200." Zero Hedge

Corn Explodes

Stocks Stumble on Bad Economic News

Between the weak manufacturing data and the potential for political chaos in Washington, stocks are down 535 points as I type this!

Stocks RISE On Perfect Track Record of Recession

If this doesn't spell B-U-B-B-L-E, what does? The last time it happened, the bubble popped then, too!

David Robsenberg at Bloomberg said this today:

"We now have had three months of a 3-mo/10-yr yield curve inversion. The track record this has had in predicting recessions: 100%."

Is An Economic Crisis Imminent?

The answer I would reply for the above question is that I don't know. I hope not! The stock market of the past few days suggests not! But based upon this article by Michael Snyder, perhaps so. He makes a good case on his website .here
Of the items Mr. Synder elucidated, here are a few that startled me:
According to the Federal Reserve Bank of New York, the probability that a recession will happen within the next 12 months is now the highest that it has been since the last financial crisis. 
Major U.S. retailers continue to shut down more stores, and we have continued to stay on a pace that would break the all-time record for sThe total number of bankruptcy filings in the United States has been steadily shooting uptore closings in a single year.

For the complete list, I recommend Mr. Synder's entire article. 

Treasury Yield Inversion Signals Recession

is this why the Dow is down 600+ points this morning? That's about 100 points more than the rise is stocks at their peak yesterday. Look out, because trouble is coming!
This treasury yield curve inversion is one of the most accurate recession signals in history! It hasn't been wrong once in the past half century! This is a huge red flag!

Update: Corn Goes Limit Down on Crop Report Results

I have learned that the price of corn plunged this morning when the US Department of Agriculture released the latest crop planting report, indicating that the corn crop is significantly higher this year than originally forecast. The price of corn futures today is limit down, dropping 25 cents today! 

Corn Price Decimated

The price of corn today was hit hard due to China canceling all purchases for this season. This is devastating for farmers, who have been struggling to make a profit.
This quote from CNBC today:
"U.S. farmers lost their fourth largest export market this week after China officially cancelled all purchases of U.S. agricultural products, a retaliatory move following President Donald Trump’s pledge to slap 10% tariffs on $300 billion of Chinese imports."

Crude Gets Clobbered

Could a collapse in demand for crude oil be imminent? If the global economy weakens, then demand for crude oil would weaken. Perhaps this is what we're seeing here now, since a sharp increase in crude oil supply surprised the markets today, sending crude oil down almost $3 per barrel!

30-Year Yield Drops Below Fed Funds Rate

As if a collapsing stock market wasn't enough of a sign of trouble ahead, today, the Fed Funds rate on the 30-year dropped. This is an ominous new sign of further trouble ahead.

A Bubble Defined!

If this headline doesn't describe a bubble, I don't know what does! This is the very definition and description of a bubble. It's just a question of time when it pops!