How do you know stocks are a little overextended? A good indicator is when even the most bullish sellside analyst on Wall Street, Morgan Stanley's Michael Wilson, whose year-end price target of 2,700 is the highest of all his peers, warns that stocks may see "pullback or consolidation" and that the coming earnings season may be a "sell the news event."
Authored by Tom Sanzillo via ValueWalk.com,
President Trump, who knows a thing or two about bankruptcy, says Puerto Rico’s public debt should be wiped out. We agree.
The commonwealth owes bondholders somewhere on the order of $70 billion, with most of that debt tied to general-obligation bonds, revenue bonds and bonds issued by the Puerto Rico Electric Power Authority (PREPA).
Last week, the US Treasury Department issued its second of four reports related to President Trump’s Executive Order 13772 (on regulation in alignment with the Core Principles). The first report was on Banking, this report is on the Capital Markets, and other reports will follow over the coming months (including on asset management, insurance, products, vehicles, non-bank financial institutions, financial technology, financial innovation, and others).
Since the first of this year, banks didn’t have much to brag about, as they lagged the broad market to the upside. While lagging, they potentially built a base that could reward the owners of banks for a while going forward.
Below looks at the Bank Index (BKX) over the past 6-years-
CLICK ON CHART TO ENLARGE
Potential that the sideways choppy action in the BKX index this year was an upper-level base to spring higher off of.
Many gold bugs make an implicit assumption. Gold is good, therefore it will go up. This is tempting but wrong (ignoring that gold does not go anywhere, it’s the dollar that goes down). One error is in thinking that now you have discovered a truth, everyone else will see it quickly. And there is a subtler error. The error is to think good things must go up. Sometimes they do, but why?