'This rally in stocks is a last hurrah!' warns Guggenheim's Minerd

[Zorro]

The Dow Jones Industrial Average on Monday had its best day in about a month, but Scott Minerd of Guggenheim Partners says investors shouldn’t be lulled into a false sense of security amid intensifying clashes over global trade.

Concerns about global trade confrontations, notably between the U.S. and China, have apparently taken a back seat to healthy labor market reports and the hope of strong second-quarter corporate results later in the week. The Dow, S&P 500 and Nasdaq were all on track for a third straight daily gain. Indeed, the Dow closed up about 320 points Monday, with the S&P 500, technology-and-internet laden Nasdaq Composite Index, and small-capitalization oriented Russell 2000 all enjoying a solid start to the first full week of trade in July.

However, Minerd, chief investment officer for Guggenheim and one of the world’s pre-eminent bond-fund managers, advised more than a dollop of caution should be employed by investors, who risk whistling through the proverbial graveyard. Via Twitter, the investment manager said: “Markets are crazy to ignore the risks and consequences of a tradewar. This rally in stocks is the last hurrah! Investors should sell now, speculators may do better in August”.

In recent days Minerd also has pointed to the flattening of the yield curve, a line that plots yields across all debt maturities, particularly the two-year Treasury and 10-year notes. Bond yields fall as prices rise. A flattening curve is a bad omen for Wall Street as it implies expectations for an economic slow down, hence increased buying at the long-end of the curve, narrowing the gap between longer and shorter-term notes.

https://www.marketwatch.com/story/this-rally-in-stocks-is-a-last-hurrah-warns-guggenheims-minerd-2018-07-09

[Squinch]

1. That's what I'm betting my money on, so I hope he's right.

[Zorro]

2. Me too

[Squinch]

5. Even if it goes a little longer, this economy is being trashed as we speak. I think we'll be ok.

[superpatriotman]

3. Though I believe the same

Bond guys always smack-talk equities

[panader0]

4. Fuck the stock market

90% of stocks are owned by 10% of the people, i.e., the rich people.
It's a rich person's poker game, the poor can't afford a seat at the table.

[Squinch]

6. But if you've been slaving to put into a 401k, it's your poker game too.

2 jobs for years. I hate that all that work is at the mercy of these assholes.

[Wellstone ruled]

7. And to think you are required to take

a minimum disbursement based on approximately 17% of your aggregate value at the close of the Markets on December 28 each year.

Now this is considered ordinary Income with a taxable value of 28%,so welcome to the world of fuzzy math.

BTW,you can roll in into a Roth IRA,but,it costs you 32% up front. Ah Gee,such a deal.

[panader0]

9. I don't have a 401k so I must confess some ignorance about them.

But you don't own the stock, right? Does your 401k give you a stock certificate?
No, isn't it more like an investment group that owns the stock, and you buy into it.
Did you want a 401k? Or was it forced on you in lieu of some other type of retirement?
Someone is making money on your retirement funds, it's a scam, and if the market crashes,
you're going to wish you had put your money under the mattress.

[Squinch]

10. There were no other options in my first career. Either a 401K or nothing. In my second

career there is a small union pension (now in jeopardy since the Janus decision) and a public employee kind of 401K called a 403b.

If you don't have a pension, the 401k or 403b or IRA is your only option to prevent destitution in your old age.

If you're putting money under the mattress, you won't have enough.

Seriously, you have to take care of the little old lady or man that you will one day be. You have to learn about these things and use them.

[panader0]

11. I'm 68 in a month. I worked construction--no union, no pension-

as the guys say " mucho trabajo, poco dinero".
I bought 40 acres, built a house, raised four kids alone.
I get $823 a month, and it's enough to get by just fine.
I qualify for AHCCCS, the Az medicare, though I don't use it, so health care is basically free.
Plus I trust doctors about as much as the stock market.
Sorry for being an old grump.

[Squinch]

12. No, that's good. If you have it covered, you're doing better than most.

I live in an expensive area of the country, and this Janus thing might prove to be a big blow to me. I have to protect the cash I've built up or I'm in deep shit.

[Blue_true]

15. Stay invested in bonds. You won't regret it.

The upyield that you can get on stocks now isn't worth the risk. Interestingly, now is a good time to do a startup business, because it is easier to capture initial funding, and if a company can hold out with that funding for 3 years, it has a real chance of survival for the long haul. Once the market drops, risk capital will instantly dry up.

[Squinch]

16. Do you do bonds or bond funds? I'm assuming bonds?

[Blue_true]

18. The only way a 401k get into bonds is through a bond fund.

The fund buys the bonds. The important thing with stocks doing no better than going sideways not is preservation of as much of your investment as you can preserve, bond funds give you a decent shot at doing that.

[GusBob]

8. They are all a bunch of crooks

And guess who their best tech people are?

Russians

[Wounded Bear]

13. Dead cat bounce...

The trend really hasn't been upwards for quite a few months. It's been mostly flat, with fluctuations.

[Squinch]

14. I got out in February. I haven't missed anything.

[Lucinda]

17. KNR Thank you!