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Showing posts with label Article. Show all posts

Jul 27, 2020

Article | Internet | Security: How firms are keeping staff and secrets safe from hackers now everyone is working remotely

Sam Shead

4-5 minutes - Source: CNBC

Companies have spent years figuring out how they can protect their staff from hackers when they come to work. It’s a tricky task and hackers are always coming up with new ways to penetrate defenses.

The job has only gotten harder as a result of the ongoing coronavirus pandemic, which is forcing companies to adapt and come up with new security measures.
More staff are working from home than ever before. Some companies have told employees they won’t be returning to the office until next year, while others like Twitter have told staff they can work from home forever if they want to. But WFH’ing presents a whole new set of challenges for businesses looking to keep their workforces and their company secrets safe.
“As people moved to working from home, many adopted insecure practices that will eventually be exploited,” BlackBerry Chief Technology Officer Charles Eagan told CNBC.
Eagan said the “attack surface” increases dramatically when company activity moves into remote locations. He added that there are “many more eyes exposed to sensitive data” and the “controls available to companies are limited.”
Some companies have already been caught out during the pandemic.
Last Week, hackers targeted the Twitter accounts of 130 high-profile people including Tesla CEO Elon Musk, Amazon boss Jeff Bezos, Microsoft founder Bill Gates, U.S. presidential candidate Joe Biden and former President Barack Obama, as well as the corporate accounts of Apple and Uber.
Meanwhile, budget European airline easyJet said in May that a “highly sophisticated cyber-attack” affected approximately 9 million customers.

Racing the adversaries

In order to facilitate remote working, McLaren Group, best known for Formula 1 racing and supercars, has embraced Microsoft Teams and several other cloud services.
Karen McElhatton, Group CIO at McLaren, told CNBC that traditional security — creating rules for what the workforce are allowed to do and blocking anything out of the ordinary — gets “thrown out of the window during extreme events like these,” and that can leave companies vulnerable.
McLaren has been using artificial intelligence-powered software from U.K. cyber firm Darktrace to protect itself from hackers.
The 2020 McLaren 600LT Spider
Mack Hogan | CNBC
“Darktrace’s AI is not trained on historical data — it works on live data in real-time, learning and evolving with McLaren as we transitioned to remote working,” said McElhatton.
“But crucially, AI is very good at handling uncertainty and change — it learns what is normal and then relearns it, and relearns — so it is constantly re-evaluating its assumptions. So, as we transition again and have a more dynamic workforce than ever before, AI is keeping up with this fast changing environment.”

Privacy screens

Philip Edwards, the global head of security at fintech app Revolut, told CNBC that business continuity plans have been put into place at Revolut in case key members of staff lose their internet connection at home.
Revolut has also “tightened” its background checking on new employees and introduced measures to monitor new hires that must now be onboarded remotely.
Staff at Revolut are also being urged to be extra cautious and use privacy screens when working from home or in public areas where “unknowns” exist.
Some companies say they have had to make very few changes.
Facebook Security Engineering Director Chris Bream told CNBC that Facebook’s systems have been built to operate in a “zero-trust network environment globally.”
He added: “This corporate security model allows our teams to work from home securely no matter where they are, so physical boundaries don’t matter as much for security.”

Jun 24, 2019

Article I Opinion I Technical indicators are bullish as stock market benchmarks attempt new highs

Lawrence G. McMillan

The prospect of lower interest rates in Europe and the U.S. has driven the stock market into a bullish stampede. And, now, overbought conditions are beginning to appear.
However, from a broader perspective, there is too much talk on financial TV about euphoria and how the rally can’t last. That kind of talk raises the possibility of much higher prices before a meaningful correction sets in. But those things are too vague to measure; we will stick with our indicators, which are still bullish.
The S&P 500 Index SPX, -0.01% broke out to a new all-time high — and did it strongly, blasting through the old highs at 2,940-2,950 points. The Dow Jones Industrial Average DJIA, +0.14% is not far behind. The Nasdaq Composite Index COMP, -0.11% as well as the Invesco QQQ Trust exchange traded fund QQQ, -0.10% are a bit further behind, although not much. But the broad-based small-caps, such as the Russell 2000 RUT, -0.69%  and a popular ETF based on it, the iShares Russell 2000 IWM, -0.77%  are way behind. (More about that later.)
The question remains whether this increase is just going to be another failed attempt at the highs or not. Most of these charts have obvious triple tops (even SPX) and perhaps even quadruple tops (the Dow, for example). Once again, we have arrived at the highs with a lot of firepower already having been spent. As it turns out, the market pullback in May was a correction — reloading for just this, an attempt at new all-time highs. We’ll see if SPX can hold these new levels. The entire May correction of just over 200 SPX points (which in its own right was pretty fast — occurring in a mere month) has been completely reversed in only 13 trading days.
There should now be support on the SPX chart at 2,890-2,900 points, the area that was most recently overcome as resistance. Below there, it’s a sharp drop down to major support at 2,720-2,730 (the March and June lows).
There is no formal resistance, since we are at all-time highs. In these situations, we often rely on the +4σ “modified Bollinger Band” (mBB) as a sort of resistance area. Well, we’ve already broken through there. SPX closed above that band on June 20, and thus a new mBB sell signal will be forthcoming. For the most part, these mBB signals have been successful. (See SPX chart; red letters indicate a successful signal, while blue letters are losing trades.)

The equity-only put-call ratios remain strongly on buy signals. Whereas we saw heavy put buying all through May and even into June, we now are seeing heavy call buying. These ratios will remain on buy signals as long as they continue to decline on their charts.
Market breadth was having trouble gaining traction on this rally, but it has finally come around. Both breadth oscillators are moving deeper into overbought territory, now that SPX has broken out to new all-time highs. That is a good thing, in that we want to see these oscillators in an overbought state when the SPX is embarking on a new rallying phase. As I said, the breadth oscillators were a little late getting into the game this time, but now they are positive. It would take at least a couple of strong negative breadth days to generate a sell signal from these levels.
There are three indicators that we watch for negative divergences, especially when the SPX is at or near new all-time highs: cumulative breadth, new highs vs. new lows, and SPX versus the Russell 2000.
Cumulative breadth using NYSE-based data made new all-time highs on three days last week. In terms of “stocks only” data (usually the more realistic measure), cumulative breadth is not yet at a new all-time high, but it’s almost there. In other words, there is no negative divergence here.
New highs are dominating new lows, in terms of all three data sets. The weakest of the three is the Nasdaq, and the strongest is the NYSE-based data (with “stocks only” in between). So this indicator, which is often an early-warning system, shows no signs of bearishness at this time.
The third measure — SPX versus RUT — is still a major negative concern. Consider the accompanying chart. It is the price of IWM (the Russell 2000 ETF) divided by the price of SPY (SPDR S&P 500 ETF Trust). You can see that the ratio between the two peaked in June 2018 and has been declining ever since. Even this last broad rally in stocks has barely lifted this ratio off its lows. In particular, since late February, SPY has been trouncing IWM. Usually this is not a good thing, but it sometimes takes a while to take effect.

This brings us to volatility. VIX VIX, -0.13%  is hovering at somewhat higher levels than in past summers, but as long as VIX is not trending upward, it’s a positive sign for the stock market. The 200-day moving average (MA) of VIX is still edging higher. So that intermediate-term concern is still in place. But as long as VIX is closing below that 200-day MA, there will not be a major correction in stocks. A close above that MA, though, should be taken as a warning sign.
The construct of volatility derivatives remains somewhat bullish, although not rampantly so. The front-month VIX futures contract is now July, and it is trading with a premium to VIX, as are the other futures contracts. Their term structure slopes upward, although not very steeply (a concern, perhaps?). Also, the CBOE Volatility Index term structure slopes slightly upward (although VIX9D has probed above VIX several times in recent days, even with SPX rallying strongly).
So, while not bearish, the whole volatility complex is not as bullish as it has been. This is unusual and should not be ignored. If VIX closes above 17 and/or the term structures invert, those will be bearish signals.
In summary, our indicators are mostly bullish, so we are bullish for the short term as well. There are some concerns regarding overbought conditions and perhaps volatility, but right now they have not materialized into anything meaningful. However, given that the broad market has failed at or near current levels several times in the past, sell signals, if they arise, should be heeded.

Source: MarketWatch

Apr 1, 2019

World's Most Profitable Company in 2018

Mike Murphy

Saudi Arabia’s national oil company was the most profitable company on the planet in 2018, according to a new report.
Citing data from Fitch Ratings, Bloomberg News reported Sunday that Saudi Arabian Oil Co. — known as Aramco — generated a whopping $224 billion last year, before interest, tax and depreciation.
Apple Inc. AAPL, +0.59%   was a distant second, with $82 billion, followed by South Korea’s Samsung Electronics 005930, +0.90%  , Royal Dutch Shell RDS.A, +1.10%  , Alphabet Inc. GOOGL, +1.65% GOOG, +1.66%   and Exxon Mobil Corp. XOM, +1.11%  , Bloomberg reported.
An expected initial public offering by Aramco didn’t happen last year, but Saudi Arabia Crown Prince Mohammed bin Salman reportedly said in October that the oil giant would go public by 2021, with an expected valuation around $2 trillion.
The Fitch report was a rare look at Aramco’s secretive finances, and comes ahead of a $10 billion bond offering for the company that may come as soon as this week, the Wall Street Journal reported Thursday. Fitch rated Armaco A+ for its first-ever debt issuance.

Source: MarketWatch

Jan 15, 2019

A New York Plastic Bag Ban: What Is Cuomo Proposing and Is It a Good Thing?

7-9 minutes

Gov. Andrew M. Cuomo said he will push to eliminate single-use plastic bags in the state. But so far, there are scant details about his plan.
Gov. Andrew M. Cuomo proposed a ban on plastic bags that seemed to include only single-use bags given out by retailers.CreditDrew Angerer/Getty Images

Gov. Andrew M. Cuomo proposed a ban on plastic bags that seemed to include only single-use bags given out by retailers.CreditCreditDrew Angerer/Getty Images
Michael Gold
The plastic bag ban plan is back.
Gov. Andrew M. Cuomo said Sunday that he would push for a statewide ban on single-use plastic shopping bags as part of his 2019 budget plan, which he will introduce in Albany on Tuesday.
Efforts to regulate the bags in New York have been discussed for years; the governor first proposed legislation to prohibit the ubiquitous bags last April. That bill, which stalled in the Republican-led State Senate, came more than a year after Mr. Cuomo and the state Legislature blocked a 5-cent fee that New York City officials wanted to impose on the bags.
As plastic bags have polluted sidewalks, landfills and waterways, bans on the bags have become a hotly debated issue. Several New York municipalities have shopping bag laws, following dozens of local governments across the country in adopting bans, fees or a combination of the two.
But details about Mr. Cuomo’s proposal were scant on Monday, raising questions about its potential impact.
In a statement on Sunday, the governor’s office said Mr. Cuomo would propose to ban “single-use plastic bags.” It did not provide a specific definition, but the language suggested that Mr. Cuomo would be targeting the plastic bags that retailers give to customers.
The bill that he introduced last year offered a variety of exemptions from the ban, including bags that contained raw meat, fish or poultry; bags used for bulk packaging of fruit and dried goods; takeout food bags used by restaurants; and newspaper bags. It was unclear whether those exemptions would remain in Mr. Cuomo’s proposal this year.
Most of the bags are not biodegradable, and they can end up littering the streets, hanging in trees or polluting waterways, said Eric Goldstein, the New York City environment director for the Natural Resources Defense Council.
Like plastic straws, which have also come under scrutiny, the bags contribute to the massive quantity of plastics in the ocean.
In 2016, a report by the World Economic Forum suggested that by 2050, the world’s oceans would contain more plastic by weight than fish. As the plastics break down, they release toxic chemicals, threatening marine life.
Also, Mr. Goldstein said, the bags are generally not recycled. Even when they are sent to recycling facilities, they are so thin that they can jam equipment, slowing the recycling process and making recycling more expensive.
In his statement, Mr. Cuomo said his proposal would “reduce litter in our communities, protect our water and create a cleaner and greener New York for all.”
In his statement, Mr. Cuomo did not address carryout paper bags, which he did not propose to regulate in his bill last year.
Because of that, some lawmakers and environmental groups cautioned that this year’s measure may not go far enough to address waste and pollution problems.
Lawmakers who suggest bag fees or bans are generally trying to steer consumers toward bringing reusable bags when they shop. But Jennie Romer, a lawyer and sustainability consultant who works with legislators on bag laws, said that when people were presented with paper as a no-cost alternative to plastic bags, they would generally take it.
“We’ve learned from experience that if you just ban plastic, an unforeseen consequence is that paper bag use increases,” Ms. Romer said.
Paper has its own environmental impacts. Aside from the use of raw materials, Mr. Goldstein said, the paper production is an energy-intensive process that generates air and water pollution. Additionally, paper bags are heavier than plastic bags, and transporting them involves greater use of fossil fuels.
Food retailers have also expressed concerns over legislation that does not address paper bag use. Mike Durant, the head of the Food Industry Alliance of New York State, said a plastic bag ban alone would put pressure on retailers, because it costs more to store and transport paper bags.
A bill introduced by State Senator Todd D. Kaminsky, a Democrat from Long Island who chairs the Senate’s Environmental Conservation Committee, proposed supplementing a ban on plastic bags with a 10-cent fee on paper bags.
On Twitter, Senator Liz Krueger, a Democrat from Manhattan who tried for a plastic bag ban in 2018, also called for a paper bag fee:
If Mr. Cuomo’s measure is enacted, New York would become the second state, after California, to impose a ban on single-use plastic shopping bags. Hawaii also has a de facto ban on the bags because all of its counties have banned them.
In addition, many municipalities, including large cities like Chicago and Washington, have imposed fees on bags given to customers at retail stores.
Washington’s 5-cent fee on paper and plastic bags went into effect in 2010. City officials have said the law drastically reduced consumption of disposable bags there, and a foundation that monitors trash in Washington’s waterways said it found a 72 percent decrease in the number of plastic bags being removed during cleanup efforts.
Chicago passed a ban on thin, lightweight plastic bags in 2015, then repealed that law in 2016 and replaced it with a 7-cent fee on paper and plastic. A 2018 study from researchers at the University of Chicago and New York University said disposable bag use in the city was down 40 percent.
Globally, countries including Israel and Ireland also have fees on plastic bags. In Israel, the government said disposable plastic bag use went down 80 percent at supermarket chains in the year after the law took effect. In Ireland, plastic bag use dropped 94 percent just weeks after the country adopted its tax in 2002.
Yes. In 2008, then-Mayor Michael R. Bloomberg called for a 6-cent fee on plastic bags. He dropped the proposal after it faced fairly strong opposition.
In May 2016, the City Council narrowly voted to approve a 5-cent bag fee. But a coalition of state lawmakers stepped in, saying that the bag fee amounted to government overreach and that it would put an undue financial burden on poor New Yorkers.
The group introduced a bill to stop the city from implementing its fee. The legislation passed, and Mr. Cuomo signed it into a law. At the time, the governor said that the city’s law was “flawed,” and that it would have allowed merchants to keep the 5-cent bag fee as a profit.
After he halted the city’s action, the governor set up a task force, which issued a report last January. The report presented eight possibilities — including a plastic bag ban and fee scenarios — and outlined the concerns over paper bags.
All the while, other New York municipalities enacted bag fees. Suffolk County on Long Island approved a 5-cent fee on paper and plastic bags that took effect last January. The city of Long Beach in Nassau County, also on Long Island, approved a 5-cent fee on plastic bags that began in 2017.
A version of this article appears in print on , on Page A24 of the New York edition with the headline: Understanding Cuomo’s Plan To Revive a Plastic Bag Ban.

Source: NYT

Nov 7, 2018

Do the mid-term results change enough to encourage a sell-off in USD? | ForexTime (FXTM)

7 November By Jameel Ahmad, Global Head of Currency Strategy and Market Research at FXTM

The reality of the outcome from the mid-term election results that Democrats will take control of the House while Republicans hold the Senate has not created too much volatility for financial markets.
Investors were reasonably well positioned for this outcome before the event, therefore it hasn’t been as much of a nervous few hours for investors as some political events have been in recent history. The USD has edged gradually lower against many of its counterparts over the course of this week, with this related to expectations that the Democrats winning some influence can provide some legislative resistance towards Trump pushing forward further pro-America policies.

The eventuality that the Democrats have fallen short of achieving a “blue wave” has prevented the worst-case scenario for financial markets from occurring.
It was always going to be a long shot due to its unlikely probability, but there were concerns that the Democrats winning control of the Senate would have ramped up the chances of President Trump being impeached. This would have been the most unfavorable outcome for investors despite its low probability, because it would have run the risk of sparking wild financial market volatility and potential black swan events.

What matters moving forward is whether this change of play represents enough uncertainty around political “gridlock” that it will weigh on the USD. The Greenback itself remains at historically very strong levels and does appear overvalued against many of its global counterparts, however it is not clear whether this result will create enough change to foreign and trade policy decisions that it would encourage investors to seriously unwind USD positions.
At the moment we do see some near-term pressure on the USD but the jury is very much out for how long this could last. This depends on whether a shift in power could actually influence Trump's policies from being passed through legislation.

The Greenback has edged lower against most of its counterparts in Asia at time of writing, and this form is being replicated across most of the G10 as European trading is set to get underway, but investors would need to see some fundamental shifts that the outcome in the mid-terms could really change matters behind the scenes to receive the needed encouragement to drag the Greenback further lower moving forward.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Oct 11, 2018

Will October Stock Market Sell-Off Boost Gold? Sunshine Profits I Article

Will October Stock Market Sell-Off Boost Gold? October 11, 2018, Arkadiusz Sieroń , PhD

The bears have awakened. Dow dropped 3.6 percent. Are bears friends of gold?

What Happened?

Yesterday, U.S stocks experienced their worst performance since February. The Dow Jones closed down 831 points, or 3.6 percent. It was its second worst day of the year, as one can see in the chart below.
Chart 1: Dow Jones over the last twelve months.
Dow Jones over the last twelve months
The bears did not spear the S&P500. The index plunged 3.2 percent, marking its biggest daily decline since February, as the next chart clearly shows.
Chart 2: S&P500 over the last twelve months.
S&P500 over the last twelve months
Importantly, the weakness did not start yesterday. The S&P500 experienced a five-day losing streak, the longest since November 2016. And in October, the index is down more than 4.4 percent.

Why It Happened?

Why did the bears awake? As always, there are many explanations. Some people point out rising interest rates. Indeed, as the Fed has been gradually rising the federal funds rate, the bond yields followed suit. As one can see in the chart below, the 10-year Treasury yields jumped above 3.2 percent in October, the highest level in a few years. Higher rates make bonds more appealing relatively to the more risky equities.
Chart 3: 10-Year US Treasury Yield over the last twelve months.
10-Year US Treasury Yield over the last twelve months
Other analysts mention global trade wars in general and the trade dispute between the US and China in particular. After Vice President Mike Pence very hawkish remarks about China a few days ago, investors could start to worry that the trade dispute transformed into trade war. Indeed, the risk aversion has risen. The CBOE Volatility Index spiked about 44 percent to 22.96, the highest level since the beginning of April.
And do not forget about the correction in China’s stock market which started on Monday. In 2015-2016, concerns about China’s economy led to the global rout. Trade wars will not help China’s economy, so investors fear about the potential slowdown.
However, it might just be a bull market correction. You know, corrections sometimes happen – and they are actually healthy for the market. Surely, it’s too early to state this with certainty, but has anything really changed in the economy? The Fed has been hiking for months, so it’s not a surprise. Neither Trump’s trade war is something new for the investors. And the US real economy seems to continue its growth. The Atlanta Federal Reserve’s GDP Now forecast model showed yesterday that the U.S. economy is expanding at a 4.2 percent annualized rate in the third quarter.

Implications for Gold

Will the stock-market sell-off boost the gold prices? Well, it’s actually happening. As the chart below shows, the price of gold has surpassed $1,200 today.
Chart 4: Gold prices since October 9 to October 11.
Gold prices since October 9 to October 11
It makes sense. When risk aversion rises, safe-havens, such as gold, benefit. However, gold does not have to rally. Let’s look at the chart below. As one can see, the yellow metal declined in tandem with the S&P500 in February.
Chart 5: Gold prices (yellow line, right axis) and the S&P500 Index (green line, left axis) in 2018.
Gold prices (yellow line, right axis) and the S&P500 Index (green line, left axis) in 2018
Indeed, if traders have finally acknowledged that the Fed is going to continue its policy of gradual tightening and just repositioned themselves, the gains in gold might be temporary. But if we see a more permanent bear market or a rise in the risk aversion, gold may rally in a more sustained way. What is important here is that interest rates are rising because of the economic growth. The normalization of monetary policy, although it may cause some market volatility, should be positive for the economy in the long run. This is bad news for the gold bulls, at least from the fundamental perspective.
If you enjoyed the above analysis, we invite you to check out our other services. We provide detailed fundamental analyses of the gold market in our monthly Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. If you’re not ready to subscribe yet and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!
Disclaimer: Please note that the aim of the above analysis is to discuss the likely long-term impact of the featured phenomenon on the price of gold and this analysis does not indicate (nor does it aim to do so) whether gold is likely to move higher or lower in the short- or medium term. In order to determine the latter, many additional factors need to be considered (i.e. sentiment, chart patterns, cycles, indicators, ratios, self-similar patterns and more) and we are taking them into account (and discussing the short- and medium-term outlook) in our trading alerts.
Thank you.
Arkadiusz Sieron, Ph.D.
Sunshine Profits‘ Gold News Monitor and Market Overview Editor
Gold News Monitor
Gold Trading Alerts
Gold Market Overview

Jun 6, 2018

The Trump Bull Market Is Far Short of 'Tremendous' June 6, 2018.| Article | investopedia

The Trump Bull Market Is Far Short of 'Tremendous'

Mark Kolakowski

The stock market's gains have been impressive, but hardly unprecedented, during President Donald Trump's first 500 days in office, which ended on Monday. The president, nonetheless, habitually offers hyperbolic statements such as his Jan. 14 tweet that took credit for the "Most explosive Stock Market rally that we’ve seen in modern times," as quoted by Reuters. Using one of Trump's favorite words, market increases during the first 14 months of his term have been "tremendous." From the close on Election Day—Nov. 8, 2016—to its all-time high close on Jan. 26, 2018, the S&P 500 Index (SPX) staged a robust 34% rally, buoyed in large part by investor optimism over Trump's business-friendly policies.
Since then, however, some air has been let out of the balloon, with the S&P 500 brought down by a 10% correction that ran from in late January to early February. Partly due to concerns about tariffs and trade wars initiated by Trump, the index has yet to stage a full recovery, and was 4% below the Jan. 26 high as of the close on June 5.
^SPX Chart
^SPX data by YCharts

How Trump Compares

Looking at the first 500 days in office of the last 20 presidents—or since 1900—LPL Financial measured the gains for the Dow Jones Industrial Average (DJIA) during those periods. Trump comes in sixth place, by a whisker:
President Party Took Office 500-Day DJIA Gain
Franklin D. Roosevelt Democratic 1933 79.8%
George H.W. Bush Republican 1989 31.3%
Calvin Coolidge Republican 1923 26.9%
Warren G. Harding Republican 1921 26.8%
Lyndon B. Johnson Democratic 1963 25.5%
Donald Trump Republican 2017 25.2%
Barack Obama Democratic 2009 24.9%
Source: LPL Financial
Trump does lead all 20 of the most recent presidents with 82 new record highs on the Dow in his first 500 days, per LPL. Johnson is second with 75, and Clinton is third with 46. Roosevelt took office during the Great Depression, while Obama's first term began after the Financial Crisis of 2008.

A Mixed Bag

Trump's policies represent a mixed bag of bullish and bearish moves with respect to the economy and the stock market. The bullish moves tended to predominate through 2017 and into January 2018, propelling stocks upward.
Trump's Bullish Moves - Economy
*Tax Cuts
*Job Growth
*Financial Deregulation
*Economic Deregulation
Source: Investopedia
However, from the stock market peak on Jan. 26 onward, Trump has become increasingly vocal and active regarding another part of his agenda, improving the U.S. balance of trade. His targets have included steel imports, all imports from China, and the NAFTA agreement with Mexico and Canada. These moves threaten to raise costs of production for U.S. companies, disrupt global supply chains, increase prices for U.S. consumers and dampen economic growth in the U.S. and around the world.
Trump's Bearish Moves - Trade Threats, Actions Against Key Targets 
Source: Investopedia
It is no surprise to many observers that, as Trump's bearish moves have come to the fore, investors have become nervous, and stocks have languished.

Looking Ahead

The future of the stock market under Trump depends heavily on sustained GDP and job growth. If the economy, and inflation, appear to be overheating, the Federal Reserve is committed to put on the brakes through interest rate hikes, which would should bring stock prices down. On the other hand, if Trump proceeds with a protectionist agenda on trade that curtails economic growth, that will be an equally negative development for stocks.
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May 23, 2018

Go Contrarian as Stocks Face Seismic Shift - May 23, 2018 - | Investopedia | Article.

Go Contrarian as Stocks Face Seismic Shift

Mark Kolakowski

 A sudden shift in market trends is likely to blindside many investors. "A shark attack could take a big bite out of unprepared investors' portfolios who don't rebalance," is the colorful warning given by Jeffrey Kleintop, chief global investment strategist at Charles Schwab, as quoted by MarketWatch. He recommends three big evasive maneuvers  to "help avoid a shark attack."

1. Look Abroad

"Prepared investors should be thinking about being a contrarian and rebalancing their portfolios from the U.S. to international stocks after a decade of U.S. outperformance," Kleintop says. To prove his point, he compared the relative performance of the MSCI USA Index and the MSCI EAFE Index since 2008. His chart shows that the USA Index delivered about double the cumulative gain of the EAFE Index over this period. "No one knows for sure if we have seen the peak of U.S. stock market outperformance of international stocks," he admits, adding, "But the risk of a shark attack appears to us to be pretty high."

2. Hunt for Bargains

Kleintop's next chart illustrates that the MSCI World Growth Index has generated a cumulative gain that is about 20% greater that from the MSCI World Value Index since 2015. While he acknowledges that growth may continue to outperform for a time, but he advises that "being prepared and rebalancing from growth to value now may turn out to be wise." (For more, see also: This Stock Correction Is Now the Longest in a Decade.)

3. Think Large

"Small capitalization stocks have been outperforming large-caps since the bull market began in 2009, but the jaws now seem to be stretched," he indicates, adding, "Rebalancing from small-caps to large-caps may help avoid a shark attack." His chart compares the MSCI EAFE Large Cap Index to the MSCI EAFE Small Cap Index, and indicates that the small cap index has produced almost twice the cumulative gain generated by the large cap index since 2009. Note, however, that he uses EAFE indices, which exclude U.S. stocks.

Limitations of the Strategy

MarketWatch observes that "global recessions and bear markets will hit all of these assets equally hard," in which case these rebalancing strategies may not offer much protection. Nonetheless, based on his analysis of the yield curve, unemployment and inflation, Kleintop does not see either a recession or a bear market on the horizon, and thus believes that investors should not flee stocks just yet.

'New Paradigm'

Meanwhile, Larry Glazer, a veteran investment manager and managing partner of Mayflower Advisors, tells CNBC that rising inflation and interest rates are creating a "new paradigm" for investors. The types of investments most likely to thrive in this environment, he says, are small cap value stocks, Treasury Inflation Protected Securities (TIPS), financial stocks, and energy stocks. (For more, see also: 4 Financial Stocks With 20% Upside: Goldman.)
For the really nervous investor, Glazer advises holding cash. He said: "A 2% money market sounds really great. It's actually outpeforming a lot of areas of the stock market."

Possible 'Leading Indicator'

So far this year, the best performing sectors in the MSCI Japan Index are defensive plays such as utilities, health care, consumer staples and real estate stocks, Bloomberg reports. According to Yoshinori Shigemi, a global market strategist at JPMorgan Asset Management Japan Ltd.: "No one can really tell whether global stocks will go into a bear market. But when Japanese defensives outperform, it can be a leading indicator." He adds, "Japan is a cyclical stock market, and it could be reacting more sensitively to a possible slowdown in the U.S. economy."
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