Tag: Market Crash

Was The Collapse of SVB a Black Swan?

Posted on by Aibek Burabayev

According to some doomsayers, the stock market is on the brink of a crash, and the collapse of Silicon Valley Bank (SVB) is being considered as a potential "Black Swan" event.

They believe it could trigger a domino effect similar to the Lehman Brothers collapse in 2008. There are already indications of this, as the failure of SVB has had a ripple effect in Europe, with the second largest Swiss bank, Credit Suisse, also being hit.

YTD SPF IXG SIVB JPM BAC CS

Source: TradingView

In the comparative chart above there is a year-to-date dynamics of S&P 500 Financials index (SPF, black), the iShares Global Financials ETF (IXG, green), SVB Financial Group (SIVB, red), Credit Suisse (CS, orange), JPMorgan Chase (JPM, blue) and Bank of America (BAC, purple).

On the chart, all of the lines indicate negative performance, with each one below the zero mark. Indeed, SVB and CS are the ultimate losers, while BAC is also suffering a significant loss at -17.01%. Meanwhile, IXG, JPM, and SPF fared slightly better, with losses of -6.43%, -6.85%, and -10.35%, respectively.

This indicates that banking stocks around the world are losing ground following the trigger from SVB, as seen with the decline in IXG and the top two banks in the US. Continue reading "Was The Collapse of SVB a Black Swan?" →

Do Valuations Matter Anymore?

Posted on by Noah Kiedrowski

Over the first half of 2021, the overall markets have had breathtaking moves of appreciation. The major indices are in unprecedented territory breaking through all-time high after all-time in what seems to be daily. The broader market has been in a blistering bull market for over a year straight, only accelerating since the November 2020 election cycle and really taking off into July 2021. Thus far in 2021, the S&P 500 is up over 16% and recently posted a seven consecutive positive day winning streak. The S&P 500 is up nearly 5% in the two weeks covering the Q2/Q3 junction, with its most recent run of seven consecutive days being the best winning streak since August of 2020. The other major indices, such as the Nasdaq and Dow Jones, are showing similar patterns as measured via QQQ and DIA, respectively. These markets are unrelenting and beg the question, do valuations even matter anymore?

Stocks are overbought and at extreme valuations, as measured by any historical metric (P/E ratio, Shiller P/E ratio, Buffet Indicator, Put/Call Ratio, and percentage of stocks above their 200-day moving average) or technical metric (Bollinger Bands and Relative Strength Index - RSI). Valuations are stretched across the board, with the major averages at all-time highs and far away above pre-pandemic highs.

Financial Experts Issue Market Crash Harbinger

Major influencers across the financial spectrum such as Michael Burry, Jeremy Grantham, Leon Cooperman, Stanley Druckenmiller, Jeffrey Gundlach, Kevin O'Leary, Gary Shilling, and Robert Kiyosaki are all bracing for a market crash. Collectively, they are all concerned about the rampant speculation and extreme valuations fueled by government stimulus programs.

Michael Burry stated that the markets are in the "greatest speculative bubble of all time in all things,” and speculation is happening across assets before the "mother of all crashes."

Jeremy Grantham stated that the market is Continue reading "Do Valuations Matter Anymore?" →

Are You Prepared For The 'Follow-Up' Crash?

Posted on by admin

A "follow-up" market crash could be coming.

I don't mean to scare you, but it's only a matter of time...

The past two happened like clockwork -- seven years apart. One happened just before 2001, after the dot-com burst. The other came with a vengeance in 2008, right after the housing collapse.

It's getting close to another seven years... so what about this time?

Are we headed for a "follow-up" market crash?

 

The very idea of losing more than half of your invested wealth in a market downturn is daunting.

Market analysts claim to know exactly where the market is going, and act like they know exactly when to buy or sell stocks. But how many analysts do you remember saying months before the 2008 financial crisis that the market was going to go down by 57%? Can you name one? Continue reading "Are You Prepared For The 'Follow-Up' Crash?" →