"[Stock] Markets Are Crazy" - Gundlach, Minerd Warn: This Is Anything But Goldilocks

Dow Jones Futures are up almost 400 points from the post-trade-war lows, Nasdaq is up even more on a relative basis, and 'safe-haven' FANG stocks are soaring as investors embrace the trade war...

There's just one thing - nothing else agrees with this riskless, goldilocks environment, and DoubleLine's Jeff Gundlach points out the ugly reality to those willing to listen...

One quick glance at the gaping divergence between lower yields (and collapsing yield curve) and soaring stocks tells you something is amiss (and we know which way this normally resolves in the short term)

Which is what Guggenheim's Scott Minerd is worried about:

And judging from the yield curve, growth is anything but the thing to buy right now...

As we are already seeing global trade volumes slump...

Comments

lester1 ATA Mon, 07/09/2018 - 08:35 Permalink

Corporations are excited for Trump geting China and EU to drop their tariffs and trade barriers and open up their markets to US goods and services. That's why stocks are going up. Imagime having access to 2 billion more customers.

 

CNBC and the dishonest liberal media will never report that!

In reply to by ATA

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In reply to by DingleBarryObummer

DingleBarryObummer Occams_Razor_Trader Mon, 07/09/2018 - 09:01 Permalink

So much consumption from China- is on non necessities.

And stawks seem to be doing fine so might as well go full balls

Donald J. Trump said he would favor a 45 percent tariff on Chinese exports to the United States, proposing the idea during a wide-ranging meeting with members of the editorial board of The New York Times - Jan 2016
https://www.nytimes.com/politics/first-draft/2016/01/07/donald-trump-sa…

In reply to by Occams_Razor_Trader

MrBoompi lester1 Mon, 07/09/2018 - 11:27 Permalink

Exploitation of cheap foreign labor has led to economic improvement in the countries we import from, especially China.  It has also led to a loss of jobs here.  But the financial overlords want it this way.  They make a lot more money by reducing their costs, and they made sure there were fewer restrictions on the flow of capital around the globe.  The process of bringing jobs back to the US will not be cheap or easy.  Just as you can bet decreased labor costs are not passed on to US customers, increased labor costs surely will.  

In reply to by lester1

bunnyswanson MrBoompi Mon, 07/09/2018 - 12:05 Permalink

Millions of illegals live in rentals or own homes.  Bring supply and demand of essential housing back into balance by adding those homes to inventory and allow the people struggling for a living to have an affordable roof over their head.  Rent is too damn high probaby due to influx of immigrants and failure to apply city planning measures.  Bad management. 

Cheap labor has allowed the employers to live in really nice homes.  Competition decides the price.

 

Allowing vulture capitalists to conspire to control the market but strategic buy-sell-trade is what is crazy.  Holding the world hostage with the threat of pulling their investment is of course the fear. 

In reply to by MrBoompi

KarlGDenninger Mon, 07/09/2018 - 08:35 Permalink

Sounds like all "SELL NOW...GET OUT" tards lately are priced out and want back in. There isn't anything different from than their was is 2014. Fed still printin money. Tariffs, Schmariffs

scrone Mon, 07/09/2018 - 08:37 Permalink

Agree with the both of them. There's always pure dumbfuckery in late cycle markets. There was a pundit on Bloomberg the other day exclaiming "I don't know why people make such a fuss about the yield curve inversion." 

Maybe because it almost always means things are going to shit you fucking idiot!

charlewar Mon, 07/09/2018 - 08:41 Permalink

The suckers are lured in by unnatural profits from years of free Feral Preserve Bunk money and think the game of musical chairs will never end. Until it does. 

Bryan Mon, 07/09/2018 - 08:43 Permalink

" , and 'safe-haven' FANG stocks are soaring as investors embrace the trade war... "

 

That statement is a distraction and a myth.  "Investors" aren't embracing anything.  The whole financial system was taken over by governments long ago because it's a political tool to get power and gain control of assets.  The 'investor' is a relic of a bygone era when the market was actually for capitalization and financing of businesses.  There is no market.  There are no investors.  There is only the State and what it wants to do with the slush fund they call a "market".

PitBullsRule Mon, 07/09/2018 - 08:49 Permalink

You guys are disappointed that your man hasn't ruined the economy yet?

Be patient! I'm sure he will get the country headed in the same direction as all his other business ventures....

Let it Go Mon, 07/09/2018 - 09:05 Permalink

Among all the recent news about euphoria and a market "melt-up" several reasons exist to be cautious. During the last two and a half years central banks and countries around the world have added more fuel to the fire which has postponed the day of reckoning. This has made all of us thinking the market was about to turn south looking rather silly and underscores the fact that trying to time economic events is both confusing and complex. Still, the fact the numbers do not work means reality will be visiting us soon. The reasoning is outlined below.

http://Economic Reality Will Soon Be Knocking On The Gate.html

El Hosel Mon, 07/09/2018 - 09:10 Permalink

Worse is better in the new normal.... most shorted and most popular out perform as the contrarian curve is inverted by the Grand Ponzi.

Econogeek Mon, 07/09/2018 - 10:49 Permalink

Yield curve has 40 basis pts til inversion. 

Wonder if TPTB'll be able to keep it pinned above zero forever.  Even they know inversion is the kiss of financial death.

Imagine they'll throw everything -- if they're not already -- at keeping the curve above psychological zero.  I figured 50 bps was the psychological bottom above zero, but maybe it's 40.  Or 25.  Or 10.

Twilight zone territory.

Bam_Man Mon, 07/09/2018 - 11:40 Permalink

According to Gundlach, we should have been at 4.50% on the Ten Year UST already.

This guy is marginally better ar predicting “markets” than Gartman.