Valuentum Exclusive Analysis for the Discerning Investor

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The Next Banking Crisis? No… Well, Not Yet.
Image Source: Berit Watkin. We’re hearing about run-on-the-bank dynamics in the UK. We think a market disruption may be nigh, but then again, it might not. “Things” are still developing.

Brexit: Secession Bells Are Ringing!
First Baptist Church in Columbia, S.C., where the first secession convention in the United States opened on Dec. 17, 1860. Source: Library of Congress, Washington, DC. Photo. Encyclopædia Britannica Online. Web. 24 Jun. 2016. Global markets are plunging, and the implosion may still be in the early innings. Market valuations remain stretched among stagnant global economic growth, and “Brexit” may be the catalyst for a correction.

Your Hard-Earned Money
Valuentum is releasing its February Best Ideas Newsletter early, February 12, in light of Presidents’ Day weekend.

Not Doom and Gloom – But Just Cautious…
Let’s go around the world in this note…

Excited About Putting Cash to Work…Eventually
Patience is so important in selecting entry points. You wouldn’t overpay for a bag of groceries, so why would you overpay for stock? Wait for the right price because you might just get it in this market.

The Fed Freezes; Outlook as Bad as Feared or Worse?
The global economy may be far worse than even some pessimists believe, as the need for a continued ZIRP (zero interest-rate policy) remains the Fed’s tactic, at least for now.

As the World Turns
We’re keeping our eyes on a number of things. First, we’re monitoring property prices in Shanghai and in other larger Chinese cities to assess the potential calamity that falling housing prices and deflation would have on the country’s banking sector and the likelihood of contagion via the British banks, HSBC and Standard Chartered, and the US ones, namely Citigroup and JP Morgan. Second, we’re watching the price of crude oil closely, as its fall will have huge implications on the earnings trajectory of companies that benefit (airlines, restaurants) as well as the ones that suffer (upstream and energy services). The net effect of falling crude oil prices has thus far been negative for S&P 500 earnings, but this may change as the energy sector becomes an ever-smaller part of index construction. Third, who can forget about the Fed, the expected duration of any tightening monetary cycle, and the resulting implications on dividend-paying stocks as Treasury yields rise?

Batten Down the Hatches – Another US Market Crash Probable
The aftermath of China’s equity market collapse and the Dow’s crash last week will have material spillover effects.

Forget About the New iPhone; The Banks in China!
Banks operate on confidence, and it has been shattered. We’ve seen this all before.

Yikes! Brazil’s Real Plunges; Protests in Hong Kong
The markets were in selling mode Monday.