Mounting Evidence Of Another Stock Market Crash: Investors Are Fearful

by | Apr 2, 2019 | Headline News | 7 comments

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    Even though the stock market is off to a healthy start in 2019, there’s mounting evidence that a crash is still coming down the pipelines. The big red flag right now is investor behavior.  It suggests that investors are getting increasingly fearful of another market collapse.

    Recently, Business Insider reported on four bearish signals that the economy has been flashing.  Just below the surface of a strong first quarter lie the warning bells that haven’t stopped going off just yet. A close look at these four signs could also suggest that the current situation, with regards to the stock market, is quite a bit more horrifying than many might realize – or might want to realize.

    The benchmark S&P 500 climbed more than 12% in the first quarter of 2019.  That’s great news and a sign of a healthy and robust economy, right? Maybe, but maybe not.  When taking these four signals of a bearish economy into account, it could get ugly. If you haven’t paid attention to the undercurrents brewing just below the market’s surface, you might conclude that the future for stocks is perfectly golden.

    All seems well as the market largely shrugged off the yield-curve inversion that sparked panic last week.  A strong March finish that can be, at least in part, attributed to investor optimism around the Federal Reserve’s newly dovish monetary policy, as well as the prospect of a successful trade-war resolution, isn’t necessarily a good thing.

    “The risk-reward to owning US equities continues to remain unfavorable,” Peter Cecchini, the global chief market strategist at Cantor Fitzgerald wrote in a recent client note. “We still do not believe the Fed’s communication was dovish enough to offset its implicit bearishness on economic fundamentals.”

    And here’s the breakdown:

    1. Massive equity outflows so far in 2019

    This is perhaps the most directly damning statistic supporting the idea that the current stock rally is vulnerable.  The amount of money that’s been taken from equity funds so far this year is pretty high. Investors have pulled a whopping $79 billion from stocks worldwide in 2019.

    2. Short interest on an S&P 500-linked Exchange Traded Fund (ETF) has spiked

    Short interest is a measure of bets that a security will fall. And short interest has spiked in the SPDR S&P 500 ETF, which is designed to track the US equity benchmark. The measure reached 6.7% of shares outstanding earlier this month, the highest since at least 2016, according to data compiled by IHS Markit. This suggests increasing insecurity in the stock market.

    3. The cost to hedge the S&P 500 ETF has soared

    Traders are paying to protect themselves against a 10% decline in the SPDR S&P 500 ETF over the next two months, relative to bets on a 10% increase. This shows investors are more fearful of losing out than of earning

    4. Bets on the volatility index (VIX) increase have ballooned

    Wagers that the VIX would increase spiked during a five-day period ended March 25.

    These four signals show investors are fearful in this current stock market landscape that has been painted quite beautifully.

     

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      7 Comments

      1. IS NOT THIS SITE IS ALL ABOUT, F-E-A-R-!

        War, disease, famine, economic collapse, the Cubs winning the World Series again?

        Does SHTF stand for Stupid Human Total Fools?

      2. $79 Billion dollars being pulled out of the US stock market isn’t really all that much given US stocks have a value of approximately $28 Trillion dollars and the world stock market totals about $75 Trillion dollars.

      3. I don’t feel sorry for stock traders, stock owners aside from grandmas stuck with a401k, bankers, corporations doing funny things with their balance sheets to keep stockholder laughing all the way to the bank, and many others of the same ilk. They’ve been bailed out and coddled via law changes all on the back of the taxpayer.

        Meanwhile, many taxpayers are so broke they can barely afford a place to live. In California, many of the homeless aren’t living under a bridge but in assorted campers and RVs and hope not to get caught while parking somewhere for the night; and yes, they have jobs some of which are considered good jobs.

        I am sorry for what all this will do to regular working people. Is there enough woods for us all to live in?

      4. Stock markets don’t crash when investors are fearful. Stock markets crash when investors are irrationally exuberant. Remember that phrase from the Dotcom bubble?
        It’s history. You could look it up.

      5. I would like to blame some one but whom? “Apocalypse now”.”The movie”, What we have here now is a giant “Shit sandwich” and if we want to get it down we are all going to have to take a bite.Of course they were discussing TET not the end of the freaking world.Maybe hot sauce and spicy mustard? Then a sbot of Stoli followed by an icy coors… And I never got to visit New Zealand, damn

      6. We’ve read repeated warnings for years about about global starvation, nuclear war, world-wide Ebola pandemics, asteroid strikes, civil war, WW III, magnetic pole shifts, Chinese army invasion across continental NA, super earthquakes, to name a few. Some internet prophets claim to have special insight, and some claim to have inside high-level sources. Often, we were warned catastrophe is imminent; so far, all are wrong.
        Here are some facts and warnings for only a few items we should really be concerned about because they are happening now:
        – The highest, over-arching, most important, primary goal of TPTB and their minions (“civil rights” organizations, NGO’s, MSM, various gov’t agencies and dept.’s, think tanks, political organizations-both overtly and covertly, etc.) is to change the demography and culture of the US to facilitate a change in gov’t and institutions, to render our Constitution of no effect thereby eliminating present rights and freedoms. To minimize and marginalize white and Christian influence, population, culture, institutions, and society. It is highly likely we will never see “The Wall”.
        – A continual and ongoing collapse of educational standards in the US, to destroy critical and independent thinking, dumbing down and rendering students vulnerable to propaganda supporting a big centralized state so as to never challenge or question authority.
        – Unimaginable and totally unsustainable public and private debt, we are hopelessly way past the ability to deal with it without a severe financial/economic crisis which will eventually play out in a variety of really bad ways. All the massive is presently being ignored by officialdom to keep it out of public awareness.
        – A designed and deliberate fracturing of society, pitting an almost infinite number of groups against each other (divide and conquer) leaving no one strong enough to challenge the state, TPTB always highlights the differences and grievances rather than trying to bring peaceful relations and society unity.
        – Constant budget-busting war making, making enemies around the world while never solving or fixing anything. Now the neo-cons are creating conditions for war with Russia, this is for two reasons; one, they want total unchallenged hegemony over an entire borderless world. Secondly, they hate a powerful and resurgent white Christian Russia that will not fold or bow to Israel.
        – Ultimately, TPTB only sees citizens as nothing more than managed disposable resources for the purposes of the state, being propagandized and having our rights and freedoms limited are necessary to facilitate this.
        Nietzsche said “Everything the State says is a lie, everything it has it has stolen.” The only real hope and measure left to effect change is SECESSION!

        • Just try to remember, it was the 1st Republican President who decided you aren’t allowed to secede.

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