Edward Flores's Avatar
published in Blogs
Aug 30, 2017

Major Banks Warn of Impending Recession

There was a widely circulated Bloomberg article a couple of weeks ago, in which several major banks warned of an impending U.S. recession. Here is a quick summary of their assertions:

  1. According to Andrew Sheets of Morgan Stanley, falling correlations are sending a warning sign. He sees falling correlations between stocks and currency, currency and rates, and commodities as troubling. Morgan Stanley sees correlations following to their lowest level in a decade. The problem with this, according to Sheets, is that investors are "pricing assets based on the risks specific to an individual security and industry," while ignoring macro drivers like falling manufacturing data. He thinks the breakdown within and between asset classes is a product of investors just "looking for excuses" to remain bullish.
  2. Bank of America analysts warned that investors are ignoring signals in the earnings space. According to Bank of America, for the first time since the mid-2000s, companies that outperformed analysts’ profit and sales estimates across 11 sectors saw no upside boost from investors. They think the under-reaction is a late-cycle indicator, signaling that investors have already priced-in the gains.
  3. Citigroup analysts see a potential bubble forming. They are concerned that spreads between risk-free Treasuries and other types of debt may widen in the coming months thanks to declining central-bank stimulus, and as investors fret over elevated corporate leverage (driving corporate yields higher). But, they also think stocks can rally further before reaching their late cycle peak that would push them into bear market. 

 

 

And these weren't the only bearish forecasts. Economists at Oxford Economics Ltd. and Societe Generale SA also issued warnings about corporate margins starting to weaken and they showed correlations to past business cycle troughs. All in all, the forecasts across these major players were gloomy, but not outright bearish.

I think there's still a bit more runway for this expansion yet. U.S. GDP was just reported at 3% for the second quarter, and corporate earnings rose nearly 10% in Q2 - a majority of which rose more than analysts expected. I also like to look at the Conference Board's Leading Economic Indicators (LEI) to see if there are any signs of weakening, and there haven't been - at least so far. There has not been a recession to date when the LEI was high and rising, and guess what - it's high and rising. 

I'm staying the course throughout the balance of 2017, and keeping a positive view.  

John Jacques's Avatar
published in Blogs
May 16, 2022
A.I. Stock Market Predictions: Head & Shoulders

A.I. Stock Market Predictions: Head & Shoulders

Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Edward Flores's Avatar
published in Blogs
Apr 29, 2022
How to Become the Millionaire Next Door

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations.  As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.
Sergey Savastiouk's Avatar
published in Blogs
May 16, 2022
When Is the Next Recession Coming?

When Is the Next Recession Coming?

However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.
Sergey Savastiouk's Avatar
published in Blogs
Mar 14, 2023
How to Start Trading Penny Stocks

How to Start Trading Penny Stocks

Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Dmitry Perepelkin's Avatar
published in Blogs
Mar 14, 2023
5 Habits that Lead to Successful Investing

5 Habits that Lead to Successful Investing

To consistently make money in this industry, you need emotional fortitude, an analytical mind, and a willingness to self-reflect. Despite trading and investing being two different activities, these principles can be applied to both.Conversely, investors with good habits often become great traders.  Rather than full sentences for titles, we’ve labeled each of our top-five investing habits using a single word principle.
Allana's Avatar
published in Blogs
Mar 23, 2023
What’s the Difference Between Data Analytics and Machine Learning?

What’s the Difference Between Data Analytics and Machine Learning?

Artificial intelligence (AI) technology is developing rapidly.Data mining can deliver raw numbers, but it does not necessarily provide actionable insights. Structure is necessary to taking abstract information and extracting commonalities, like averages, ratios, and percentages.
Sergey Savastiouk's Avatar
published in Blogs
Mar 13, 2023
4 Tips for Fast, Effective Stock Analysis

4 Tips for Fast, Effective Stock Analysis

With just a few clicks, an investor can search for individual stocks, categories of stocks, sectors, or investment themes, and then he or she can conduct a full range of technical and fundamental analysis within seconds.All powered by Artificial Intelligence.  Below, we give you 5 tips for fast, effective stock analysis using Tickeron’s Screener.
Sergey Savastiouk's Avatar
published in Blogs
Mar 20, 2023
5 Golden Principles in Investing

5 Golden Principles in Investing

You have enough faith in that stock, based on research, that the return will equal or exceed the investment.  Do unto others.The principles outlined here will ensure that happens.  Principle #1: Diversification Investors can’t be one-dimensional when constructing a portfolio.
John Jacques's Avatar
published in Blogs
Mar 24, 2023
If Hedge Funds are Using AI to Invest, Why Shouldn’t You?

If Hedge Funds are Using AI to Invest, Why Shouldn’t You?

Some of the world’s biggest financial institutions have devoted multi-million dollar budgets to developing algorithms that can find patterns in the market, identify trends, and perform automated trading designed to take advantage of even the smallest price movements. The AI revolution is so big that as it stands today, the world’s five biggest hedge funds all use systems-based approaches to trade financial markets.Indeed, quantitative trading hedge funds now manage $918 billion (according to HFR), which amounts to 30% of the $3 trillion hedge fund industry – a percentage continues to grow with each year that passes.
Sergey Savastiouk's Avatar
published in Blogs
Mar 15, 2023
The five most important Lessons Learned After 10,000 hours of Trading

The five most important Lessons Learned After 10,000 hours of Trading

Ten thousand hours of active trading, broken down into forty-hour weeks, amounts to almost five years. Having surpassed that milestone myself, I now understand why it's significant for any trader's journey. The early years taught me valuable lessons that have shaped my approach to trading. It's a misconception that great traders are born with innate talent. The truth is that it takes years of...