Critical information for the U.S. trading day
John Hussman is at it again.
Of course, the fund manager’s detractors would be quick to tell you, he’s been at it again, wrongly, since the Dutch East India Company went public.
OK, it hasn’t been that long. And Hussman has earned some street cred along the way with some strong calls, including nailing the market collapses in 2000 and 2008. In fact, his fund surged to $6.7 billion in assets under management in 2010, before the weight of his misfires brought that figure down to $360.5 million over the ensuing seven years, according to the Wall Street Journal.
So, why do we care about his latest end-of-times outlook?
Maybe we don’t. But after an ugly October, doomsayers like Hussman might resonate a bit more with skittish investors looking for their fears to be validated.
Monday’s early action is only raising more questions.
In our call of the day, the president of Hussman Investment Trust reiterated his longtime stance that there is a menacing “trap door under the market,” which could lead to the S&P 500 SPX, -0.83% losing two-thirds of its value.
“I have little question that Fed policy has again produced a bubble that will have extraordinarily disruptive consequences,” he wrote. “The advance of recent years has produced a toxic combination of extreme valuations in every conventional asset class, coupled with a breathtaking mountain of low-grade debt issued by Wall Street to satisfy the yield-seeking speculative demand of investors.”
Hussman, a former professor at the University of Michigan with a Ph.D. in economics from Stanford University, says there could still be some wild moves to the upside before the crash he’s been predicting finally comes through.
So get ready for more bouts of volatility VIX, +7.95%
“In the context of obscene valuations and unfavorable market internals… the only time we’ve seen anywhere near the number of classic top features as Sep 20, 2018 was the week of March 24, 2000,” he wrote. “We should periodically expect scorching advances from short-term oversold conditions.”
No “scorching advance” this morning.
The Dow Jones Industrial Average DJIA, -0.87% , S&P 500 SPX, -0.83% and Nasdaq Composite Index COMP, -1.61% all opened lower on Monday. GoldGCZ8, -0.35% also came under pressure, as did crude CLZ8, +1.46% which has suffered a string of losses of late. In Asia ADOW, +0.04% major benchmarks closed in the red, while European indexes SXXP, -0.80% were moving lower early.
Some Merger Monday action with SAP SE SAP, -6.08% agreeing to purchase Qualtrics International for $8 billion in cash, Qualtrics, a Utah-based software company, had filed for an initial public offering in October hoping to raise about $200 million. SAP shares were off early.
A big week for the marijuana sector is upon us. Four major Canada-based weed producers are set to report earnings in the coming days, just about a month after Canada legalized adult recreational use of cannabis. While legalization occurred after the quarter ended, there is still plenty to learn from reports by Aurora Cannabis ACB, -3.16% Canopy Growth WEED, -1.81% Cronos GroupCRON, -2.79% and Tilray TLRY, -0.16%
Alibaba BABA, -1.97% said early Sunday local time it logged 10 billion yuan, or $1.44 billion, of sales volume in the opening minutes of its annual Singles Day shopping extravaganza, a start that outpaces last year’s record kickoff.
The stories out of California are beyond disturbing. At least 31 lives have been lost with more than 200 people missing as of Sunday night. The Camp Fire in Butte County, about 100 miles north of Sacramento, has destroyed an estimated 6,500 homes and 260 businesses, Already ranked as the most destructive wildfire in state history, the Camp Fire has equaled the deadliest on record.
John Hussman isn’t the only one ringing the alarm bells on the stock market. Chris Kimble of the Kimble Charting Solutions blog connected recent pricing action to the Florida recount with this illustration, saying “history doesn’t repeat,
“If any good came of this maybe it was that for one day the left and the right finally came together to agree on something: That I’m a dick”— SNL’s Pete Davidson, in part of his apology on Saturday to Dan Crenshaw, a Representative-elect in Texas who was injured in Afghanistan during his third tour as a Navy SEAL.
81%—that is the percentage of homes in San Francisco worth more than $1 million, according to a recent report from Trulia. A year ago, only 67% of homes reached this once lofty level.
The market may be open but most banks will be closed and there are no economic releases on the docket for Monday. Later this week, we’ll get October CPI and retail sales results, to go along with a smattering of updates on the manufacturing front. Read:Investors are back on inflation watch and feeling spooked
Nearly everyone—that would include POTUS—needs at least seven hours of sleep a night to be “mentally limber,” according to sweeping study.
Kellyanne Conway offers up a fresh set of alternative facts.
Serena Williams’s husband warns on “hustle porn.”
The Atlantic tackles one of the most pressing issues facing us today: Who is the most underrated superhero of all time?
Colleges make a ton of money off rejected applications.
Remember that viral chart about media bias? The woman who created it has raised $30,000 to help take it to the next level.
Need to Know starts early and is updated until the opening bell, but sign up hereto get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.
but sometimes it rhymes.”
“Will history repeat exactly this year? I doubt it,” Kimble wrote in his blog post. “But, if multiyear rising support does happen to give way, selling pressure could increase similar to 2000.”