Risk Continues to Explode Higher in this Market
No, all is not well in wonderland as the talking heads advise everyone to remain calm for the stock market rebound.
I have discussed rising US corporate junk bond yields multiple times just within the past year as an important metric to track, especially since it is a forward looking metric of risk that will spread to stock markets. For example, the last time I discussed this metric was just a month ago here, and I used this metric to explain why risk was still highly elevated in US stock markets and to also illustrate how highly suppressed gold and silver prices were by Central Bankers (as they still are today).
I also like referencing this market to prove the absurdity of all the financial analysts that appear on MSM and continue to shill for a massive US stock market rebound because were this the most likely case, US corporate junk bond yields would not have more than doubled since September 2021’s low of 3.97% to a whopping 8.29%. For the MSM financial analysts that continually sling hopium in their financial markets analysis, some used the brief dip, that I’ve circled above, in US corporate junk bond yields from 7.68% to 6.88% that happened at the end of May to absurdly suggest that a US stock market rebound and tapering inflation were on the way.
I on the other hand, expect these rates to keep moving higher as US markets continue to tank, eventually even overtaking the massive 11% yield we witnessed during the last US stock market tank in March 2020 that was only prevented into developing into a much deeper crash by an emergency US Federal Reserve meeting and interest rate cut to 0.00%. This time around, when the Feds start tucking tail and running and slashing interest rates again after a series of interest rate hikes, I doubt that even an emergency rate cut back to 0.00% will stop the US markets from crashing further.
Disclaimer: No information provided on this platform qualifies as investment advice. Please see the “About” page for full disclaimer.
Access more skwealthacademy content through my other platforms: The production of all my public content is 100% reader supported. A huge thanks to all my current supporters on substack and patreon. For investment analysis and tips every week and month, join my patreon platform here. I opened up a handful of new memberships a couple of weeks ago including 30 new benefactor level memberships, and after this latest increase in memberships, the benefactor and lower member levels will remain closed for an indefinite period of time, though there are still a handful of memberships left at higher levels. To donate to the launch of my upcoming wealth building Academy, visit my gofundme campaign here, and to download a fact sheet to learn how my soon-to-be-launched Academy will radically alter business education forever, click here. Finally, if you’ve never followed me on Twitter, follow me now as I am re-starting my account. Let’s see if we can increase my twitter follower count after it has been capped for 10 years!
While I believe that the Fed will turn tail and cut rates when the squealing becomes deafening, the one Tool they have that has yet to be used is the direct purchase of Stocks. If Japan, Switzerland and other European Central Banks have used this gimmick in the past, the U.S. Fed hasn't so this ploy is still in their purview. I'm also of the opinion that should this event take place, it will drive stocks much higher and then crater like a deflating Souffle. We'll see....
Dude, I appreciate your info and loike being aware of what's going on in many areas. Except for a 23 year career as a specialty retailer for consumer electronics and the related activities in that, investing and wealth accumulation activities were not something I wanted to spend time with - but our philosophies tend to run the same track and your take on the current financial situations is something i would bet on.