UPDATE: S&P 500 Hits a New 2022 Low and the DJIA Falls 458 Points!

By Staff Reporters

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  • Major US indexes plunged after staging a relief rally in the prior session. 
  • UK prime minister Liz Truss stood by proposed tax cuts, despite a chorus of vocal critics.
  • US Treasury yields hit multi-year highs this week as markets react to growing recession fears. 

Stocks recovered from their steepest losses of the day, with the Dow Jones Industrial Average down over 600 points and the NASDAQ lower by nearly 4% at one point in the afternoon. Major indexes still ended deep in the red, though, with the S&P 500 hitting a new closing low for the year. 

UK prime minister Liz Truss said that she stood by the government’s plan to cut taxes, which earlier in the week rocked markets and sent the pound falling last week to 37-year lows. Top economists including Paul Krugman, Mohamed El-Erian, and Nouriel Roubini have ripped into the new fiscal policy, warning that it could set UK inflation surging even higher and require more aggressive moves by the central bank, upping the risk of recession. 

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What is a BEAR MARKET Relief Rally?

Are We Experiencing a Bear Market Relief Rally?

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Maybe yesterday – Not today!

By Staff Reporters

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A bear market relief rally describes a period inside of a bear market in which prices of stocks temporarily increase during, sometimes quite sharply, before returning to new lows. This rise in prices is typically a short-lived increase, sometimes lasting anywhere from days to months, amidst an overall long-term downward trend in the market.

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FINANCE: https://www.amazon.com/Comprehensive-Financial-Planning-Strategies-Advisors/dp/1482240289/ref=sr_1_1?ie=UTF8&qid=1418580820&sr=8-1&keywords=david+marcinko

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UPDATE: The Domestic Stock Markets and [Un]Social Media

By Staff Reporters

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The stock markets fell after new data showing U.S. manufacturing activity stalled and the service sector’s pandemic recovery has gone into reverse as a result of high inflation and mounting interest rate hikes, feeding concerns that the Federal Reserve’s efforts to cool decades-high price increases may force the economy into a recession. The Dow Jones Industrial Average fell 138 points, or 0.4%, to close at 31,899, while the S&P 500 fell 0.9% and the tech-heavy NASDAQ 1.9%; for the week, the indexes ended up 2%, 2.5% and 3%, respectively.

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US social-media companies also saw more than $130 billion wiped off their stock-market values after disappointing revenue from Snap Inc. and a lackluster report from Twitter Inc. raised new concerns about the outlook for online advertising. The Snapchat parent plummeted 39%, sinking to its lowest level since March 2020. Meanwhile, Facebook parent Meta Platforms Inc. fell 7.6%, Pinterest Inc dropped more than 13%, and Google owner Alphabet Inc. declined 5.6% in its biggest one-day drop since March 2020. Twitter also reported quarterly results on Friday, though Wall Street remains focused on the company’s legal battle with Tesla CEO Elon Musk, who is attempting to withdraw from a deal to buy the company. The stock rose 0.8% on the day.

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UPDATE: President Biden, Domestic Markets, IRS Tax Filing Service, Polio and Paul Krugman’s “Sorry”

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By Staff Reporters

President Biden tested positive for the coronavirus, raising health concerns for the 79-year-old president and underscoring how the virus remains a persistent, if muted, threat in a country trying to put the pandemic in the past.

U.S. IndicesChangeClose
Dow Jones+162.0632036.90
NASDAQ+161.9612059.61
S&P500+39.053998.95
SCHWAB1000+129.5013230.70

Senator Elizabeth Warren along with 22 more Democratic lawmakers are pushing the IRS to create its own free tax filing service. The bill also aims to allow eligible taxpayers to choose a “return-free option,” providing a pre-populated filing. “The average American spends 13 hours and $240 every year to file their taxes — that’s too much time and too much money,” Warren said in a press release. But some tax professionals say it’s not a realistic plan for the overburdened agency.

A case of polio has been identified in an un-vaccinated adult in Rockland County, according to a news release from the New York State Department of Health. The agency confirmed that the infection was transmitted from someone who received the oral polio vaccine, which has not been administered in the United States since 2000. Officials believe the virus may have originated outside the United States, where the oral vaccine is still administered.

he New York Times opinion columnist Paul Krugman published a mea culpa in column form flat out admitting he was wrong for thinking inflation wouldn’t be that bad. In his piece, titled, “I Was Wrong About Inflation,” the economics professor noted that he was on “Team Relaxed” when it came to fears of inflation and acknowledged that was a “very bad call.” Krugman began by recounting the “intense debate among economists about the likely consequences of the American Rescue Plan, the $1.9 trillion package enacted by a new Democratic president and a (barely) Democratic Congress.” He mentioned how he originally didn’t see the massive government spending bill as that dangerous for the economy. “Some warned that the package would be dangerously inflationary; others were fairly relaxed. I was Team Relaxed. As it turned out, of course, that was a very bad call,” he confessed.

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UPDATE: Dollar-Euro Parity, Crude Oil and the Markets

By Staff Reporters

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The Euro lost 10% versus the dollar this year and at $1.0238 EUR=EBS is close to the psychologically crucial parity point it last saw in mid-2002. It also hit new seven-year lows versus the Swiss franc and dropped against the sterling and the yen, but few observers are willing to call a bottom yet. Nomura’s analysts cut their euro/dollar target to $0.95 and said parity could be breached as soon as August. Citibank says a move to parity is “inevitable.” However, Nomura said that $0.95 was not that important historically, noting that the euro fell from $1.17 after its creation to $0.82 in October 2002. Extrapolating backwards using its legacy currencies, the euro traded as weak as $0.6444 in February 1985.

On the New York Mercantile Exchange, benchmark U.S. crude oil for August delivery fell $8.93 to $99.50 a barrel, its first dip below $100 since May 11th. Brent crude for September delivery fell $10.73 to $102.70 a barrel.

Finally, the Dow dropped 129.44 points, or 0.4%, to finish at 30,967.82; it had been down more than 700 points at its lows earlier in the session. The S&P 500 gained 6.06 points, or 0.2%, closing at 3,831.39. And, the NASDAQ Composite advanced 194.39 points, or 1.8%, to finish at 11,322.24.

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UPDATE: The Markets, Ruja Ignatova, and the Grayscale ETF Bitcoin SEC Challenge

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By Staff Reporters

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Markets: The S&P’s drop of more than 21% was its biggest H1 plunge since 1970. Its second quarter was the worst since Q1 of 2020. And while the S&P is floundering in the bear market, the NASDAQ, which is loaded with tech stocks, has taken an even bigger licking: It’s plunged more than 30% since its peak last November. For example:

Netflix: down 71% YTD (the worst performer in the S&P)

Coinbase: down 81%

Even megacaps like Meta (-52%), Amazon (-38%), and Apple (-25%) haven’t been spared.

Ruja Ignatova promised her cryptocurrency, OneCoin, would become the next Bitcoin. The only problem: It didn’t exist. The FBI today added the Bulgarian-born Ignatova—accused of defrauding investors out of approximately $4.1 billion in a fake cryptocurrency scheme—to its most-wanted list. The 41-year-old has been on outstanding since October 2017, just days after a warrant was issued for her arrest in the U.S. In a press release, the FBI called OneCoin a “massive fraud scheme” and offered up to $100,000 for information leading to Ignatova’s arrest.

The U.S. Securities and Exchange Commission rejected a proposal from Grayscale to list a spot Bitcoin ETF on the NYSE Arca exchange, setting up a potential legal battle with the country’s biggest digital asset manager. The SEC said Grayscale’s request for an ETF listing, which it proposed as a conversion of its popular Grayscale Bitcoin Trust GBTC, didn’t meet the regulator’s standard of being “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.” Grayscale said it would challenge the SEC’s decision in court, arguing that its approval of ETF’s that hold Bitcoin futures should “logically (make it) comfortable with ETFs that hold that same asset.”

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UPDATE: Market Predictions and the Global Economy?

By Staff Reporters

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  • Predictions: The stock market could surge 7% this week as quarter-end re-balancing leads to a buying spree in equities, according to JPMorgan. The bank expects re-balancing trades to favor equities after a year-to-date decline of nearly 20%. “Next week’s re-balance is important since equity markets were down significantly over the past month, quarter and six-month time periods.”
  • Markets: With the S&P having plunged nearly 18% this year, expect W. Buffett to preach the value of value stocks (aka steady, non-flashy public companies). By one measure, they’re on track to beat growth stocks by the widest margin in more than two decades, according to the WSJ.
  • Global economy: Russia defaulted on its foreign-currency sovereign debt for the first time since the Bolshevik Revolution in 1918 after failing to pay bondholders $100 million worth of interest by the end of a 30-day grace period. The default marks the beginning of a complex legal journey for bondholders, but it’s not expected to have any major consequences for the Russian economy, which has already been battered by Western sanctions.

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UPDATE: The Markets!

By Staff Reporters

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CELEBRATE JUNETEENTH

  • The Markets: Can an extra day of rest change the market’s fortune?
  • As the Fed has escalated its fight against inflation, the S&P has fallen for 10 weeks out of the last 11. And not even American blue-chip firms have been spared from the carnage.
  • The Dow Jones Industrial Average closed below 30,000 for the first time since January 2021.

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UPDATE: The Markets, Gasoline, Recession and the Bear

By Staff Reporters

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For the domestic markets, the S&P 500 closed down 151 points, or 3.88%. It’s down nearly 22% since January. The Dow was down 876 points (2.79%) and the NASDAQ dropped 530 points (4.68%). And, investors were disappointed to learn that inflation is moving in the wrong direction. U.S. consumer prices surged 8.6% year-over-year in May, to a fresh 40-year high, led by higher prices for energy, food and housing.

For the first time in history, a gallon of regular gasoline now costs $5 on average nationwide, according to AAA, and experts predict gas prices could average $6 a gallon by August.

Moreover, nearly 70% of leading economists expect the US to tumble into a recession as the country grapples with inflation. In a Financial Times poll, the bulk of economists said they expect a recession to be declared in the first half of 2023. The poll comes after US inflation soared to 8.6% in May, outstripping economists’ expectations and piling the pressure on the Fed.

Finally, S&P Global says a 20% decline in the S&P 500 on a closing basis from its previous peak is all it takes to define a bear market. Which means that this bear market is already more than five months old, since the S&P 500 all-time high came on January 3rd, 2022.

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UPDATE: Sentient GOOGLE, Corporate Earnings, the Markets and Cryptocurrency

By Staff Reporters

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Blake Lemoine, an engineer for Google’s responsible AI organization, described an AI system that he has been working on since last fall as sentient, with a perception of, and ability to express thoughts and feelings that was equivalent to a human child. He was promptly suspended.

Earnings Are Under Threat. Companies from Target to Microsoft have warned their results will be lower than expected, while analysts have trimmed earnings forecasts across industries. Investors will get further clarity next month when companies begin reporting results for the second quarter.

The S&P is in a historic slump having fallen in nine out of the past 10 weeks for just the third time since 1980. And cryptocurrencies, which trade 24/7, tumbled following another red-hot inflation report.


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UPDATE: Dr. Mike Burry, I-Bond Web-Site Crash and Wall Street

By Staff Reporters

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“The Big Short” celebrity investor and colleague Michael Burry MD recently disclosed that he is short Apple stock. Could he be right about AAPL dipping even further from here? Famous hedge fund manager Michael Burry, the real-life character in “The Big Short”, became famous for his short position on subprime CDOs ahead of the 2008 crash. This time, he is shorting Apple stock. The bombshell news has come recently via a 13F filing released by Burry’s hedge fund.

CITE: https://www.r2library.com/Resource/Title/082610254

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People searching for a respite from inflation have flooded the Treasury Department phone lines and website to try to buy Series I savings bonds, causing much longer waits than usual. It’s the latest example of outdated government computer systems causing anguish for Americans. On May 2nd, the Treasury Department announced that the inflation-protected I bonds will earn 9.62 percent interest at least until the end of October. A day later, TreasuryDirect, the website that people have to use to purchase the bonds, crashed.

Finally, Wall Street rumbled to the edge of a bear market after another drop for stocks briefly sent the S&P 500 more than 20% below its peak set early this year. The S&P 500 index, which sits at the heart of most workers’ 401(k) accounts, was down as much as 2.3% for the day before a furious comeback in the final hour of trading sent it to a tiny gain of less than 0.1%. It finished 18.7% below its record, set on January 3rd. The tumultuous trading capped a seventh straight losing week, its longest such streak since the dot-com bubble was deflating in 2001.

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UPDATE: Carvana, DJIA, NASDAQ, S&P, Crypto, Gasoline and the US Budget Deficit

By Staff Reporters

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Carvana, the fast-growing used-car seller based in Tempe, announced its plans to lay off 2,500 employees – more than 10% of its workforce – as losses mount. The company, which operates a network of high-profile vehicle “vending machines” including one at Loop 202 and Scottsdale Road, said the move was designed to “better align staffing and expense levels with sales volumes.” Carvana reported a $506 million loss in its first quarter ending March 31st, well above red ink of $82 million during the same stretch of 2021, despite a 56% jump in revenue to $3.5 billion and a 14% increase in vehicles sold.

And, new inflation data scared some investors, who continued to dump riskier assets like cryptocurrencies amid the ongoing market selloff: The price of Bitcoin fell up to 7%, to around $29,000, according to Coin Metrics, before paring back losses. The price of the Terra (LUNA) cryptocurrency has fallen by more than 99 per cent, wiping out the fortunes of crypto investors. Terra, which ranked among the top 10 most valuable cryptocurrencies, dropped below $1 on Wednesday, having peaked close to $120 last month.

LINK: https://www.msn.com/en-us/money/markets/crypto-billionaires-vast-fortunes-are-destroyed-in-weeks/ar-AAXaijp?li=BBnb7Kz

Indices:

  • The Dow Jones Industrial Average fell 215 points, or 0.7%, to 31,949 after swinging between gains and losses after the opening bell.
  • The S&P 500 shed 46 points, or 1.2%, to 3,954.
  • The NASDAQ Composite fell 296 points, or 2.5%, to 11,445.

The national average for a gallon of gas surged to $4.40, the highest price recorded by AAA since it began keeping track in 2000 (though lower when adjusted for inflation than the high-water mark in July 2008, when gas was $5.36 per gallon in today’s dollars).

Finally, the US federal government’s budget deficit has shrunk by some $1.57 trillion so far this fiscal year, driven by record receipts from a strong economy and a slowdown in spending as pandemic-era programs fade.

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UPDATE: The Markets, Crypto and Online Retailers

By Staff Reporters

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  • Markets: After booming stocks had their worst day of the year because of raging inflation, slowing economic growth, and a potential recession.
  • Crypto: Bitcoin and other major cryptos like ethereum also tumbled in the aftermath of the FOMC announcement. They’ve typically tracked the performance of growth stocks, which have gotten hammered on the prospect of higher interest rates.

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Almost every major online retailer reporting earnings with signs of a decline:

  • Wayfair shares cratered nearly 26% yesterday after announcing that its active customer count dropped 23.4% from a year ago.
  • Bed Bath & Beyond reported an 18% nosedive in online sales.
  • Etsy and eBay shares both dropped by double digits yesterday after giving weak guidance for the current quarter.
  • At least five senior executives from Meta’s fledgling e-commerce division have fled in the last six months.
  • Shopify shares plummeted about 15% on Thursday after posting much lower-than-expected earnings.

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UPDATE: The Markets, COVID and Home Prices

By Staff Reporters

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  • Markets: Yesterday was a tale of two markets. The Dow, which is home to blue-chip corporations like P&G, gained, while the NASDAQ, comprised of tech stocks, fell. Netflix is now the worst performing stock in the S&P this year.
  • Covid: The DOJ appealed a judge’s ruling that overturned a federal mask mandate for transportation. The move came at the suggestion of the CDC, which determined that people should still wear masks in indoor public transportation settings.
  • Homes: The median existing-home price in the US hit an all-time high of $375,300 in March, up 15% from the year before. With surging mortgage rates and higher home prices, the average borrower is paying ~38% more than they would have for the same home a year ago, according to Realtor.com.

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