MoneyTalks radio interview with Trend Letter founder Martin Straith

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“No matter what your opinion of Donald Trump the person, that administration’s policy of reduced business taxes and regulations are very good for US businesses. Compare that to what we have in Canada and the EU.”

The Trend Letter founder and editor Martin Straith joins Michael to discuss what this divergence in policy means for investors – and more importantly, the specific markets that will benefit.

The interview with Martin starts at 17:30. Click Here to listen in.

In the interview Martin offered MoneyTalks listeners a Special Offer, and will donate $50 each to Kids Help Phone & Special Olympics for every new subscription. Here is the Special Offer:

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If you have any questions, send us a note at info@thetrendletter.com.

Trend News Team

Stock Market ‘Red Flag’ close to being triggered

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This bull market in stocks is still very much alive, and we are even anticipating a powerful run or ‘melt-up’ before it is all over. But after this big ‘melt up’ we expect that we will have a ‘melt down’.

Whether our prediction of a melt-up is true or not, the next question is when does this nearly 10-year bull market end? One of the key indicators that we trust to tell us when this powerful stock market bull run will end is if we see an ‘inverted yield curve.’

Typically, long-term interest rates are higher than short-term rates, which makes sense the longer someone owes you money, the greater risk  that you won’t be paid back in full increases the further out in time you agree to lend.  Meaning that all things being equal, your risk is much lower when lending for 3-months versus 10 years.

But on occasion when the Federal Reserve wants to slow the economy down, they push short-term rates higher than long-term rates. When that happens, we have what’s called an inverted yield curve. History shows that every stock market top over the past 40 years has been preceded by an inverted yield curve, so when it happens, we must pay attention.

An inverted yield curve is a leading indicator, meaning that the stock market top does not happen right after the yield curve inverts. Typically, the market crash starts 12-18 months after the yield curve becomes inverted. The two most recent time we saw an inverted yield curve in was in 1999 before the DOT COM crash in 2000 top and 2006 before the global financial crisis in 2008.

Today, the spread between US 2-year & 10-year yields is just .27% and is threatening to invert very soon.

yield_curve0922

If we see the yield curve invert in the next few months, we could then expect to see a serious market crash or correction 12-18 months later.

Given that the yield curve has not yet inverted we could have at least another year before the ultimate end of this bull market. If the yield curve inverts in the next few months, we should see the  end of the bull market sometime in 2020/2021. When the melt-down starts, it could be the nastiest of our lifetime, worse that 2008.

All investors need to start planning so they have an exit strategy for when the market has a significant decline…we can discuss how to do that later. The coming bear market crash may not be imminent, but it is coming.

Do you have a strategy to protect your wealth when the melt-down comes? Seriously consider subscribing to Trend Technical Trader, which is a hedge service designed to not just protect you in a melt-down, but to allow you to profit from a melt-down.

Stay tuned!

Global Market Update – September 5/18

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To be a successful investor today you must understand what is happening in the markets globally, one cannot simply look at what is happening domestically. Capital flows out of perceived risky areas, and into perceived safer areas.  The current perceived risky area is the emerging market debt, and in particular, emerging market debt denominated in $US.  This is a theme that subscribers to The Trend Letter are well aware of, and one that could well be the start of the global debt crisis that we have have warned about for a couple of years now. We recently posted a blog on this issue which you can read here.

When viewing the following charts, note how it is only US equities, and the US dollar that are in uptrends.

Global Equity Markets

Asia

The Asian markets opened first and sold off on light volume, as concerns continue to grow over US dollar denominated debt in emerging market countries.

Shanghai was down 1.68% on light volume. Down 24% since January

The Japanese Nikkei was also down, but only .82%. Down 9% since January.

Nikk0905

Europe

European markets were the next to open and they too felt the tension over emerging market debt, as well as trade concerns. The UK FTSE, German DAX, Italian MIB, Spanish IBEX, were all down about 1%, but the French CAC lead the decline at -1.57%. CAC down 6.7% this year.

CAC0905

Turkey saw its stock market drop .43% today, and is down about 24% this year.

Turkey XU-100

North America

North American stocks were mixed today, with the Dow Industrials up slightly by .09%, but remains in a solid uptrend, up 19.4% year over year.

Dow0905

The S&P 500 was down slightly by .28% for the day, but is also in a strong uptrend, up 17.5% year over year.

S&P0905

The Nasdaq was the big loser in the US, down 1.16% with Netflix leading the decline, down over 6% on the day. Tech stocks have been the biggest gainers, up 25.7% in a year. But they will also take the biggest fall in a correction.

Nasdaq00905

Global Currencies

US dollar was down slightly on the day. Expect the $US to remain strong against most currencies for the foreseeable future.

 USD

Euro struggling to gain traction. We expect the Euro to go into crisis mode in the next year.

Japanese Yen can be a ‘safe haven’ play, but concerns over Japanese debt is well founded. Ultimately, the Yen will decline steeply.

British Pound will continue to struggle with BREXIT noise.  We are bearish long-term.

Pound0905

Canadian dollar heavily impacted by NAFTA concerns. Will rise when commodities rise.

  Candollar0905

Turkish Lira down over 47% in the last year. Could be the canary in the coal mine regarding emerging market debt crisis.

Turkish Lira

Argentine Peso down 56% in the last year. Another leading candidate for debt default.

ArgPeso

In addition to the very real and legitimate concerns over emerging market debt, we have the coming US elections, and the concerted effort to take down Trump. Whatever one’s feelings are for Trump the person, his policies have been very good for the markets. If Trump goes down, so will the markets. If you don’t have a strategy to protect yourself in a severe market decline, check out Trend Technical Trader.

Stay tuned!

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Alphabet/Google becoming AI Centric to secure foothold & dominate digital user experience

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High Tech corporations have invested a lot in technologies that produce large amounts of revenue, and with the increasingly rapid advancements in technology, these corporations must invest even more in order to protect their rich revenue streams.  A good example of a corporation reaching further and further into the future is Alphabet, the parent company of Google.  Search engine and advertising are the cornerstones of Google revenue, and they want it to keep flowing, so Google /Alphabet has identified several areas they consider to be important in securing a high revenue future for themselves and their investors.  Alphabet has spread projects and initiatives throughout Google and their other entities, and many of these initiatives point to the important role of AI in their future, and by extension, our future too.

At the heart of their strategy is the idea of being AI Centric.  With this approach, they anticipate maintaining a leading role with their core business (search and advertising), as well as delving into areas where they see opportunities for improvement or disruption using an AI approach.  Here is a brief overview of some of the newer areas Google / Alphabet hopes to fully capitalize on in future.

  • Cloud Computing Services: Google wants to grow their share of the cloud market. They currently rank third, after Amazon and Microsoft, however they have been expanding their presence through a number of strategic investments, acquisitions, and internal initiatives, to better compete with rivals in this space.  Currently, Google cloud business is growing at a faster pace than the competition.  Products and services to watch are G Suite, a new chip called the EDGE TPU that can carry out machine learning processes on Internet of Things devices, and they have some cloud supported Blockchain projects on the go with strategic partners.  An important aspect of Cloud computing is Security, and this too is a new area of focus for Google.  As of January 2018 Google spun off Chronicle, to be the cybersecurity arm and work towards a ‘digital immune system”.  Businesses are generating more and more information every day and will require more complex computers, and incremental computing infrastructure.  Google believes this can be handled through the AI machine learning capabilities they are developing.
  • Transportation and Logistics: Google /Alphabet anticipate opportunities to continue the disruption in this sector. Investments include LIME, a scooter company, as well as UBER, LYFT, and a few other ride hailing services. This sector also includes autonomous vehicles, causing serious disruption in the trucking industry, as well as with people moving vehicles.  Alphabet has their WAYMO business arm, and their autonomous vehicle miles driven are the most in the world (8 million miles).  WAYMO has said that they intend to use semi-autonomous trucks to deliver freight to its data centres in Atlanta.  Google’s drone delivery company, Project Wing, has become an independent company under the Alphabet umbrella, and has completed some drone deliveries in Australia.  Products and services like these all make use of AI technologies that Google / Alphabet are developing rapidly.
  • Emerging Markets: Google continues to expand in India and SE Asia, two regions experiencing fast growth in internet usage.  Google has participated in funding for an Indonesian ride-hailing company giant called GO-JEK, which is similar to UBER, but also provides food delivery services and a mobile payment platform.  In India, Google has invested in a personal concierge and delivery service platform, and TEZ, a free mobile wallet that allows users to make payments directly from their bank account.  This is all a big part of Google’s attempt to become an integral part of commerce in India.  Despite historic setbacks and tensions, Google is also focused on China, making more investments in that country, such as com, China’s second largest e-commerce platform, and Chushou, a China-based gaming firm.
  • Healthcare: Alphabet intends to advance healthcare effectiveness through better data processing using AI.  Alphabet’s life science subsidiary, VERILY, concentrates on disease detection, a crucial part of effective health care.  Google is leveraging its’ abilities in AI to improve healthcare data management, and their AI focused subsidiary, DeepMind, has an app called “STREAMS” that helps to detect kidney injuries based on lab results, so doctors can be alerted quickly via the mobile app and promptly escalate urgent cases.

AI is critical to Alphabet’s long-term outlook as it is the thread that runs through search and advertising, cloud computing, autonomous driving, healthcare, and many of the company’s other endeavors.  This includes the exploding market for digital assistants and Smart Home products.  Consumers can already choose among big competition, like Apple (SIRI) and Amazon (Alexa).  Google wants to win this market, and every other market it delves into.  We see that Google/Alphabet is on the leading edge of AI technology, making more and more investments to protect and expand their revenue streams.  Many other industries will be affected by AI developments, and many will be in ways we have not yet imagined.  The breadth and pace of tech change will continue to increase.  Let Crypto Trend be your guide to the future, as we continue to identify technology investment opportunities that can lead to financial success.

Stay Tuned!