Wells Fargo Strategist Throws Shade on Gold While Bitcoin Outshines All

By CCN: Wells Fargo’s name is synonymous with gold.  Henry Wells and William Fargo launched the bank in the Wild West during the California Gold Rush, supporting both the investment in and delivery of the precious metal via its famous stagecoach. The U.S. has come a long way since the stagecoach, and bitcoin is now encroaching on gold’s store-of-value territory. Shockingly, Wells Fargo Head of Real Asset Strategy John LaForge no longer believes the precious metal is the one to own, telling Kitco:

“Stocks, in the last few weeks have hit, and you see the days when stocks really get hit, and what does gold do? Gold is up $3, it’s up $5, it’s up $7. I think where we are in this gold super cycle, this long cycle with commodity prices, is we’re kind of in the dull period.”

LaForge didn’t jump on the cryptocurrency stagecoach. In fact, he suggested if anything, the bitcoin is too nascent of an asset class to cause any disruption to gold’s multi-trillion dollar market. But he didn’t have to validate crypto; the returns speak for themselves. While gold is struggling to deliver paltry single-digit returns, bitcoin investors are having the time of their lives as the biggest cryptocurrency reaches for the moon.

bitcoin price chart bitcoin price chart

The bitcoin price reached a new 2019 high on May 27. | Source: CoinMarketCap

What Safe Haven?

Gold is designed to be a safe haven from the volatile stock market, especially during times of heightened uncertainty in the economy. The precious metal’s uncorrelated nature to other asset classes is what makes it so special. Now that it has essentially lost its shine during a time when investors need a flight to quality more than ever, bitcoin is increasingly looking like the only asset class that’s packing a punch in 2019.

LaForge points investors to currencies instead of gold except he chooses the wrong one, suggesting the U.S. dollar instead of a cryptocurrency such as bitcoin and saying:

“If you want to get defensive, you’re almost better off in other defensive assets too, so the dollar versus say, gold, if you see volatility. Gold’s just not acting that well, frankly.”

‘No Interest Left in Gold’ While Bitcoin Demand Keeps Rising

June gold futures are currently hovering at $1,277. Perhaps the most telling sign that gold has lost its luster is that demand for the commodity is waning. Wells Fargo’s Lafarge has a $1,300 price target on the precious metal but don’t get your hopes up:

“There’s just no interest left in [gold].”

Meanwhile, over in crypto land, Fundstrat Co-Founder Thomas Lee tweeted today:

“The resilience of bitcoin in the face of heightening tensions shows that bitcoin/crypto is one of the few places to find alpha.”

It’s probably just a matter of time before the Wells Fargo strategist sees the light, too.

LA Rams QB Tries to Quit Tobacco – By Buying a $160,000 Tesla?

By CCN: Elon Musk is laughing all the way to the bank, thanks to Los Angeles Rams backup quarterback Blake Bortles.

Bortles signed with the LA Rams during the offseason and was determined to break his habit of using chewing tobacco, also known as “dip.” So he bought a Tesla.

The $160,000 Quit Tobacco Method That’s Guaranteed to Fail

The Blake Bortles logic path works as follows: The former Jaguars first-rounder only buys his dip at gas station convenience stores, so if he stops going to convenience stores, he won’t buy dip anymore. In order to eliminate gas station visits, he buys an electric vehicle – a Tesla.

This seems like an extremely expensive method for quitting tobacco, considering Blake Bortles ponied up $160,000 for his custom Tesla.

The method also is certainly not FDA-approved, so it’s not a good idea to follow his lead – especially since he carted $6.5 million in guaranteed money to the LA Rams when leaving the Jacksonville Jaguars.

Shockingly, the Blake Bortles “Quit Tobacco Now” plan failed. Now he just drives his $160,000 Tesla to the gas station and still buys his dip.

Don’t Use Tesla Autopilot, Blake!: LA Rams Fans Everywhere

Los Angeles RamsLos Angeles Rams

LA Rams fans had better hope their backup quarterback stops using the Tesla Autopilot feature. | Source: Christopher Hanewinckel-USA TODAY Sports

LA Rams fans, however, have more to be concerned about. Blake Bortles uses the autopilot function on his Tesla:

“I just let it get on the highway and you double-click the thing twice and it just drives you all the way there. I kind of check the news and see what’s going on. It beeps like every 60 seconds and you’ve got to touch the wheel, so you can’t take a nap.”

Given the apparent propensity for the Tesla autopilot to fail catastrophically and end in death, or burst into flames without warning, LA Rams fans had better hope that starting quarterback Jared Goff does not get injured.

How Blake Bortles Can Kill Two Birds With One Tesla

The LA Rams organization might consider getting Blake Bortles a driver.

This would not only remove the autopilot risk, but the driver could refuse to go to a convenience store, thereby denying Blake Bortles an opportunity to buy his dip.

There’s more to this story because the Tesla is also a status symbol here in LA. They are found in the driveways in the expensive parts of town, and in the parking lots of the top restaurants and nightclubs.

Bortles is trying to fit in, and he can’t be blamed for rightly believing that his pickup truck would be looked at askance at the fancy new Los Angeles Rams facility.

Don’t Give Elon Musk Any More Ideas

There’s an additional unintended downside to Bortles’ failed dip-addiction treatment plan.

Snake oil salesman Elon Musk must’ve heard about Bortles’ antics, and he is likely dreaming up other ways to dupe people into buying a Tesla for reasons that have nothing to do with the car, to further line his pockets.

So don’t be surprised when Elon Musk starts touting the Tesla as a way to “adjust your personal magnetic field.”

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.

Morgan Stanley Rings Recession Alarm, Ignores Booming Economy

By CCN: An analyst at vaunted investment bank Morgan Stanley made himself look like the village idiot Monday, saying America’s economic outlook is crumbling toward recession even as the economy booms.

The U.S. Economy Is on ‘Recession Watch’

Chief U.S. Equity Strategist Michael Wilson spit out several data points while warning in a report that the U.S. is now on “recession watch.” He stated:

“Recent data points suggest U.S. earnings and economic risk is greater than most investors may think… The U.S. economy is vulnerable to a more significant slowdown due to overheating last year from the fiscal stimulus. This led to labor cost pressures for corporations, excessive inventories, and an overzealous capex cycle that is now reverting to the mean, which means well below trend spending for several quarters.”

Morgan Stanley’s strategist also expressed concern regarding U.S. economic cycles.

An economic cycle indicator that suggests the U.S. is headed into a recession. | Source: Morgan Stanley Cross Asset Research

The chart is partially derived from manufacturing activity, which hit a nine-year-low this month thanks to a slowdown in the services sector.

Economists point to the services sector as an indicator because healthcare and business services are utilized frequently by Americans. If those are slowing, then it means Americans are spending less money for those services.

Cherry Picking Data to Support a Dumb Prediction

Morgan Stanley economists, meanwhile, mention other concerning data:

“The April durable goods report was bad, particularly the details relating to capital goods orders and shipments. Coming on the heels of last week’s crummy April retail sales report, it suggests second quarter activity growth is sharply downshifting from the first quarter pace.”

Wilson pointed to an ongoing yield curve inversion in which the longer-term 10-year Treasury yields less than the 3-month Treasury bill, which typically signals a recession.

Wilson has also been sounding the economy and stock market alarm for some time now:

It Isn’t All Doom and Gloom, Not Even Close

Morgan Stanley is ignoring the plethora of opposing data.

Rival investment bank JPMorgan puts the risk of recession at only 15%. Its CEO Jamie Dimon does not see a recession in 2019.

Jamie Dimon dismisses the inverted yield curve signal:

“I would not look at the yield curve and its potential inversion as giving the same signals as in the past…There has simply been too much interference in the global markets by central banks and regulators to understand its full effect on the yield curve.”

What Recession Watch? The U.S. Economy Is on Fire

JPMorgan’s Dimon points to ongoing robust GDP growth, which is averaging 2.9% since Donald Trump took office and reached 3.2% in Q1. Global GDP growth has been stable since the end of the financial crisis.

Jamie Dimon believes the trade dispute with China will be resolved favorably. The labor market has been on fire, with more than 20 million jobs added since the bottom of the financial crisis.

Employed individuals. | Source: BLS/Bloomberg

That’s given a kick to wage growth, which had been stagnant for years and is now exceeding 2.5% annual growth.

US Consumer Comfort Index. | Source: Bloomberg

This has led to steady increases in personal income, which in turn has goosed the U.S. Consumer Comfort index.

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.

The S&P 500 is Booming, So Why Is the Stock Market Shrinking?

By CCN: The S&P 500 is having a blistering run in 2019. As of May 28, the large-cap stock market index is up 13.5 percent and shows minimal signs of slowing down.

One equity analyst, however, isn’t buying that the rise is organic. He believes the stock market is shrinking and has actually contracted by 2.3 percent since 2018.

S&P 500S&P 500

The S&P 500’s year-to-date rally masks a concerning fact: The stock market is shrinking. | Source: Yahoo Finance

Citigroup’s Chief Global Equity Strategist, Robert Buckland, “crunched” the numbers and ultimately blames the decline on share buybacks and mergers and acquisitions (MA). Bloomberg’s Tracy Alloway fittingly describes the idea as the “incredibly shrinking stock market“:

“Share buybacks and MA are a really easy way for companies to boost earnings per share… If you can grow through organic growth and, you know, actually improve your company’s performance then why not do it through financial engineering and arbitraging equity versus debt yields.”

Stock Market Shrinkage Is Simple Economics

Buckland estimates that the cost of equity in the US currently sits around 6.7 percent while the cost of debt is considerably lower at 4.1 percent. That may not sound significant, but as Bloomberg points out, executives won’t hesitate to jump on an easy two-and-a-half percent arbitrage opportunity in a low-growth environment.

The easy money won’t last forever, though. Debt-to-equity levels are rising sharply for the S&P 500, leaving behind a rapidly closing window for this kind of financial engineering.

SP500 Debt to Equity RatioSP500 Debt to Equity Ratio

The cost of raising debt continues to rise for S&P 500 companies. | Source: Bloomberg

Share Buybacks Were Once Outlawed

Stock buybacks have accelerated to record levels since the global financial crisis. Prior to the 1980s, however, company buybacks were illegal, outlawed for the same type of shenanigans that led to the Great Depression.

President Reagan repealed those laws in 1982, giving companies, for the first time in decades, the opportunity to buy back their own stock. That decision formed a major bottom in the S&P 500 and an epic run to this day.

S&P500 long term chart. Stock market is shrinkingS&P500 long term chart. Stock market is shrinking

A long-range view of the S&P500 since the 1930s. | Source: Macrotrends

Coincidence? You decide, but it’s not that hard to make the connection. The practice also raises questions around company leadership.

In an interview with CNN Business, veteran hedge fund manager Mark Yusko lambasted buybacks as “stock price manipulation,” deftly observing:

“I find it absolutely mind-numbing that a company like Apple can sit on $260 billion of cash, you’re telling me that all these genius people can’t think of one intelligent thing to do with that capital?”

You Feeling Lucky, Punk?

Similar to the great Westerns of old, a new modern standoff is taking place. On one end of the street is management with their hand firmly on the buy trigger. On the other, politicians like Elizabeth Warren, gunning to be the new sheriff in town:

Executives have every reason to buy back their own stock. Who wouldn’t? Their performance bonuses are heavily tied to their share options. Problem is, this creates a scenario where management is more interested in juicing their own stock instead of growing the business organically.

Perhaps this new gunfight will be labeled as an “Eastern” in the years to come. This time around, the showdown may take place between Congress and Wall Street.

Inflamed Trade War Tensions Threaten to Send the Dow Reeling

By CCN: The Dow Jones has remained relatively stable throughout recent weeks, keeping the 25,500 point level intact amidst rising tension between the U.S. and China.

The Dow Jones has remained stable The Dow Jones has remained stable

The Dow Jones has remained stable throughout the past month despite growing concerns of a long-lasting trade war (source: Yahoo Finance)

With analysts in both the U.S. and China such as the Center for a New American Security CEO Richard Fontaine and Global Times Chinese and English editions editor-in-chief Hu Xijin foreseeing a long-lasting trade war, the Dow Jones could struggle to maintain its stability in the near-term.

Why a deal in short-term is not likely, keeping Dow’s Future uncertain

Both sides were left pondering the motive of one another as the latest round of trade talks fell apart earlier this month.

According to Xijin, a growing portion of China’s population considers the reason behind the lack of progress in the trade talks as the intent of the U.S. to slow down the growth of China’s economy.

“More and more Chinese now believe the U.S. wants to sabotage China’s economic development, not so-called fair trade with China. [The] Huawei issue has greatly strengthened such an understanding among Chinese. Are we misreading U.S. intentions? The U.S. side should explain it seriously,” he said.

Many local analysts based in China have said quite consistently in recent weeks that the current structure of the deal in which the U.S. is requesting major changes to China’s industrial policies is simply not compelling to the domestic audience.

In the U.S., President Donald Trump has also received bipartisan support for his approach in dealing with the trade dispute with China, with Democratic leaders siding with the president’s decision to push for a better deal that meets the demands of the U.S.

The trade war is at a stalemate wherein the deal presented by the U.S. is not being accepted by the domestic audience of China and the Trump administration, with bipartisan support, is unwilling to compromise in its requests for industrial policy changes.

Whether the uncertainty in a deal would lead to a Dow Jones slump and a slowdown for the entire equities market would largely depend on the progress made by either side in the upcoming months.

The Center for a New American Security CEO Richard Fontaine wrote in a column:

“An indication that this conflict is here to stay is the striking bipartisan support for President Trump’s approach. Unlike every other aspect of the president’s foreign policy—toward Iran, for instance, or North Korea, Saudi Arabia, or Russia—Washington’s Democrats and Republicans largely agree that the time for a reckoning with China has come.”

Based on the intensifying conflict between the two sides, a comprehensive trade deal in the near-term has become seemingly unlikely.

ChinaDaily, the most widely read English newspaper in China with a readership of 150 million, said in an op-ed that even if President Xi and President Trump meet at the G20 summit next month, it could only result in a partial deal that limits the damage inflicted on farms, which are likely to suffer the most from the trade deal fall out.

“If Donald Trump and Xi Jinping strike a deal—perhaps at their planned meeting during next month’s G20 summit—it will be partial at best. Perhaps Beijing will commit to buy more American farm products, natural gas and autos,” the publication said.

Is a Slump Imminent?

At this point, the lack of progress in the trade talks is said to be priced into the market. Evidently, the conflict between the U.S. and China has nearly reached its peak and some foresee a scenario in which both governments become exhausted from the tariffs and the impact of the tariffs on the global economy, pushing for a deal.

If a deal does come into fruition, it would highly likely lead the Dow Jones and the SSE Composite rebound, raising the sentiment around the global economy. If a deal is not reached following the G20 summit, a decline in confidence from investors is a possibility to consider.

Giddy Jeff Bezos Hoards Amazon Billions as Exs Fortune Eyes 50% Hit

By CCN: Amazon boss Jeff Bezos didn’t become world-famous for philanthropy, but he is certainly charitable when showering praise. In a Tuesday tweet, Bezos heaped compliments on ex-wife MacKenzie Bezos for pledging to donate 50 percent of her $37 billion divorce payout to charity.

The irony was not lost on observers, though. This is because, among the top six richest billionaires in the U.S., Bezos is the only one who has not joined the Giving Pledge.

Under the Giving Pledge, the “world’s wealthiest individuals and families’ commit to giving away “more than half of their wealth.” This could be “to philanthropy or charitable causes either during their lifetime or in their will’.

Currently, over 200 billionaires, either as individuals or as family units, have signed the Giving Pledge. The Giving Pledge concept was created by Bill Gates and Warren Buffett.

Bezos Name Finally Appears on Giving Pledge List

MacKenzie is now the latest entrant to the list that includes her ex-husband’s business rivals such as Tesla’s Elon Musk and Oracle’s Larry Ellison. That it took a divorce for the Bezos’ name to appear on the list is remarkable.

Jeff BezosJeff Bezos

“Bezos” finally appears on the Giving Pledge list, but the Amazon boss remains notoriously absent. | Source: GivingPledge.org

Notably, even after the divorce payout, the Amazon CEO’s net worth is still more than three times than that of his ex-wife. Bezos’ net worth is also higher than his fellow Washington resident Bill Gates, who has become the face of the philanthropic initiative.

Not surprisingly, many reactions to Bezos’ tweet implored him to follow his ex-wife’s example.

Hoorah! Jeff Bezos Donates $1 Million to Charity!

To be fair, Bezos has occasionally donated to charity. This includes giving to Seattle’s homeless shelter and employment training nonprofit Mary’s Place. According to GeekWire, the multi-billionaire has given a whole $1 million to the organization!

Bezos’ approach to philanthropy has been criticized, and not just on the size of his donations. Philanthropy adviser Jay Hayman urged the Amazon CEO to focus on long-term durable solutions rather than short-term impact.

Specifically, Hayman warned Bezos that “doing good in the world is harder than making money.”

Amazon Boss: My Businesses Are Philanthropic

In the case of Mary’s Place, Hayman asked the multi-billionaire to invest his resources in reforming the systems that have contributed to homelessness. Otherwise, the philanthropy adviser warned, the vicious cycle of poverty would continue:

“Else you will go back to Mary’s Place in 20 years’ time and see the children of the people there today and realise that whilst some were helped, the point was missed and fundamental injustices went unaddressed in our quest for short term impact.”

So why is Amazon’s chairman not giving like other billionaires? The answer may lie in a tweet he published nearly two years ago while crowdsourcing for philanthropy ideas.

In the tweet, Bezos betrayed the fact that he sees his for-profit businesses as somewhat “philanthropic.” This is because, in his view, they were already contributing to society “in their own ways.”

Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.

Dow Reverses 100-Point Gain as Trade War Ravages iPhone Sales

By CCN: The Dow and broader U.S. stock market gave back gains Tuesday, as the threat of a trade-war escalation with China prompted Citigroup to slash its iPhone sales projections by half. Shares of Apple Inc. (AAPL) were little changed at the start of the holiday-shortened week, but that could soon change if Chinese residents shift their smartphone preferences.

Dow Rally Vanishes; S&P 500, Nasdaq Follow

All of Wall Street’s major indexes pivoted lower Tuesday afternoon, which reflected a tepid pre-market for Dow futures. The Dow Jones Industrial Average initially rose by as much as 132 points before giving back gains later in the session. It would settle down 52.5 points, or 0.2% at 25,533.44.

Dow Jones Industrial Average ChartDow Jones Industrial Average Chart

Dow Jones Industrial Average walks back triple-digit gains at the start of the holiday-shortened week. | Source: Yahoo Finance.

The broad S&P 500 Index of large-cap stocks declined 0.2% to 2,820.05. Losses were widespread, with consumer staples plunging more than 1.1% on average.

The technology-focused Nasdaq Composite Index held onto gains as technology stocks outperformed. The index edged up 0.1% to 7,647.59.

Trade War Will Ravage iPhone Sales

apple stock, trade warapple stock, trade war

U.S.-China trade war could ravage iPhone sales, according to Citigroup. | Source: REUTERS / Dado Ruvic

The ongoing trade war between the United States and China could have adverse effects on Apple. Analysts at Citigroup believe iPhone sales “could be cut in half” should Chinese consumers shift their purchasing preference to domestic brands.

“We are proactively slashing our iPhone unit sales as we believe the US/China trade situation will result in a slowdown of Apple iPhone demand in China as China residents shift their purchasing preference to China national brands,” Citi said, according to CNN.

Apple ranks as the sixth most heavily-weighted component in the Dow 30. It is also represented on the S&P 500 Index, and – further still – it trades on the Nasdaq. If Citigroup’s estimates are proven accurate, the technology sector as a whole could suffer significant losses as a result of the trade war.

Tech stocks in general and semiconductor companies, in particular, have the most to lose from a trade war. The Chinese territory of Taiwan is one of the most active regions for the semiconductor industry.

On Monday, President Trump said his administration isn’t ready to make a new deal with China, highlighting the fractious state of the current negotiations.

“I think they probably wish they made the deal that they had on the table before they tried to renegotiate it,” Trump said Monday at a joint press conference with Japanese Prime Minister Shinzo Abe in Tokyo.

Apple admitted last year that it might have a China problem after the company downgraded its outlook on iPhone sales in the country. In its most recent quarter, Apple reported $58.02 billion in revenue, including $10.22 billion for Greater China.

Click here for a real-time Dow Jones Industrial Average (DJIA) price chart.

The S&P 500 is Booming, So Why Is the Stock Market Shrinking?

By CCN: The S&P 500 is having a blistering run in 2019. As of May 28, the large-cap stock market index is up 13.5 percent and shows minimal signs of slowing down.

One equity analyst, however, isn’t buying that the rise is organic. He believes the stock market is shrinking and has actually contracted by 2.3 percent since 2018.

S&P 500S&P 500

The S&P 500’s year-to-date rally masks a concerning fact: The stock market is shrinking. | Source: Yahoo Finance

Citigroup’s Chief Global Equity Strategist, Robert Buckland, “crunched” the numbers and ultimately blames the decline on share buybacks and mergers and acquisitions (MA). Bloomberg’s Tracy Alloway fittingly describes the idea as the “incredibly shrinking stock market“:

“Share buybacks and MA are a really easy way for companies to boost earnings per share… If you can grow through organic growth and, you know, actually improve your company’s performance then why not do it through financial engineering and arbitraging equity versus debt yields.”

Stock Market Shrinkage Is Simple Economics

Buckland estimates that the cost of equity in the US currently sits around 6.7 percent while the cost of debt is considerably lower at 4.1 percent. That may not sound significant, but as Bloomberg points out, executives won’t hesitate to jump on an easy two-and-a-half percent arbitrage opportunity in a low-growth environment.

The easy money won’t last forever, though. Debt-to-equity levels are rising sharply for the S&P 500, leaving behind a rapidly closing window for this kind of financial engineering.

SP500 Debt to Equity RatioSP500 Debt to Equity Ratio

The cost of raising debt continues to rise for S&P 500 companies. | Source: Bloomberg

Share Buybacks Were Once Outlawed

Stock buybacks have accelerated to record levels since the global financial crisis. Prior to the 1980s, however, company buybacks were illegal, outlawed for the same type of shenanigans that led to the Great Depression.

President Reagan repealed those laws in 1982, giving companies, for the first time in decades, the opportunity to buy back their own stock. That decision formed a major bottom in the S&P 500 and an epic run to this day.

S&P500 long term chart. Stock market is shrinkingS&P500 long term chart. Stock market is shrinking

A long-range view of the S&P500 since the 1930s. | Source: Macrotrends

Coincidence? You decide, but it’s not that hard to make the connection. The practice also raises questions around company leadership.

In an interview with CNN Business, veteran hedge fund manager Mark Yusko lambasted buybacks as “stock price manipulation,” deftly observing:

“I find it absolutely mind-numbing that a company like Apple can sit on $260 billion of cash, you’re telling me that all these genius people can’t think of one intelligent thing to do with that capital?”

You Feeling Lucky, Punk?

Similar to the great Westerns of old, a new modern standoff is taking place. On one end of the street is management with their hand firmly on the buy trigger. On the other, politicians like Elizabeth Warren, gunning to be the new sheriff in town:

Executives have every reason to buy back their own stock. Who wouldn’t? Their performance bonuses are heavily tied to their share options. Problem is, this creates a scenario where management is more interested in juicing their own stock instead of growing the business organically.

Perhaps this new gunfight will be labeled as an “Eastern” in the years to come. This time around, the showdown may take place between Congress and Wall Street.

Dow Struggles as Analyst Savages Trump’s ‘Game of Thrones’ Strategy

By CCN: The Dow floundered toward a muted open on Tuesday after Donald Trump’s shocking China flip-flop spooked the markets and distracted investors from the president’s otherwise successful four-day visit to Japan.

Meanwhile, one stock market analyst says that he has had enough of Trump’s “Game of Thrones” presidency and its utterly “disappointing” results.

Dow Teeters as Stocks Eye Tepid Session

All of Wall Street’s major indices teetered near their previous closes on Tuesday. As of 9:17 am ET, Dow Jones Industrial Average futures had gained 22 points or 0.09%, implying a 57.31 point gain at the opening bell.

dow jones industrial average futuresdow jones industrial average futures

Dow futures indicated a lack of conviction following Trump’s abrupt China flip-flop. | Source: Yahoo Finance

S&P 500 futures declined 0.04%, and Nasdaq futures added 0.11% as investors digested the latest developments in multiple US trade conflicts.

Trump Flip-Flop Shocks Stocks

Stocks traded sideways on Tuesday after President Trump deviated from his self-imposed party line, admitting that the US is “not ready” to strike a new trade deal with China.

“I think they probably wish they made the deal that they had on the table before they tried to renegotiate it,” Trump said Monday at a joint press conference in Tokyo alongside Japanese leader Shinzo Abe. “They would like to make a deal. We’re not ready to make a deal.”

The cherry on top? Trump warned that the US would consider raising tariffs on Chinese goods “substantially” to twist Beijing’s hand further.

“I think sometime in the future China and the United States will absolutely have a great trade deal, and we look forward to that,” Trump said. “Because I don’t believe that China can continue to pay these, really, hundreds of billions of dollars in tariffs. I don’t believe they can do that.”

That’s a stark reversal from May 24 – last Friday – when Trump boasted to White House reporters that he would resolve the trade standoff unbelievably quickly.

Analyst Rails at Trump & His ‘Game of Thrones’ Strategy

It’s unclear what – if anything – changed over the holiday weekend, but Trump’s sudden tonal shift injected more volatility into an already-fragile stock market.

One analyst savaged the former television star for treating his presidency like an episode of “Game of Thrones.”

“Trump is playing a Game of Thrones with both foreign and domestic adversaries,” said Ed Yardeni, president and chief investment strategist at Yardeni Research, according to CNBC. “Since he is the President of the world’s greatest economic and military power, he claimed that he will consummate lots of deals with them that will greatly benefit the US in short order. The results have been mostly disappointing so far.”

Trump’s shocking China reversal offset Wall Street optimism about his trip to Japan, which by all accounts, helped smooth tensions between the two allies.

Analysts had feared that Trump would open another front in his international trade crusade by targeting the US-Japan trade imbalance, but the president appeared eager to resolve standing disagreements and confident in a swift resolution to the dispute.

Dow Careens Toward First Monthly Loss of 2019

Consequently, the Dow looks unlikely to mount an end-of-month comeback and extend its four-month winning streak.

On May 24, the Dow rose 95.22 points or 0.37% to 25,585.69, but the recovery failed to prevent the DJIA from stumbling to its fifth-straight weekly loss. The S&P 500 gained 3.82 points or 0.14% to close at 2,826.06, and the Nasdaq climbed 8.72 points or 0.11% to 7,637.01.

The US stock market remained closed on Monday in observance of the Memorial Day holiday.

Click here for a real-time Dow Jones Industrial Average (DJIA) price chart.

This Surging Crypto Spiked 200% in 2019, Likely to Double Before 2020

By CCN: The EOS fireworks are just getting started. The commonly touted fundamental factors are June’s Block.one event in Washington and the purchase of 3.3 million tokens worth of RAM described as pushing the price up. There are also rumors that a game-changing announcement will be made in June. These developments have certainly helped the cause of this cryptocurrency but these are not the major catalysts driving the price up.

Over the last few weeks, the smart money has shown its hands as EOS continues to move with strong bullish momentum. In this article, there’s a case to be made why EOS is likely to double in value before the year ends. The cryptocurrency is already up 205% so far in 2019.

EOS Made an Unmistakable Technical Reversal on the Longer Timeframe

If you’re a hodler of the cryptocurrency, now is the time to start celebrating. EOS suffered through a long and brutal bear winter that began in April 2018 and effectively ended this month. Yes, the downtrend that lasted for one year and one month appears to finally be over.

EOS weekly chartEOS weekly chart

Undeniable inverse head-and-shoulders reversal breakout on the weekly chart | Source: TradingView

In the chart above, you will see how EOS breached resistance of $6.00. This triggered the breakout from a large inverse head-and-shoulders pattern. As you can see, EOS painted this structure for nine months. That’s a lot of time build a base in cryptocurrency trading.

In addition, the technical reversal looks valid considering that EOS is now trading above $8.00. That’s a growth of over 33 percent since the breakout.

Buy This Cryptocurrency on Dips

With the technical reversal, EOS in is now a buy on dips candidate. We wouldn’t suggest buying the current breakout rally. The cryptocurrency is showing signs of bullish exhaustion on the shorter timeframe.

EOS daily chartEOS daily chart

EOS showing signs of weakness on the daily chart | Source: TradingView

The best move right now is to wait for this rally to fade. Eventually, those who bought the bottom and the breakout will take profits. The pressure to sell will likely increase every day as the daily RSI flashes overheated signals. It is trading in overbought territory while showing a bearish divergence.

Stay on the sidelines for now and consider entering after the pullback. There’s a very good chance that EOS will retest $6.00 before resuming its uptrend.

EOS End-of-Year Target is $12.00

EOS remains in a strong uptrend even though we expect a considerable pullback. That bias is valid as long as the market trades above $6.00 which is the neckline of the inverse head-and-shoulders pattern.

Using the height of the pattern for our target price, we can see EOS easily tapping $10.00.

EOS target chartEOS target chart

EOS has the potential to climb as high as $12.00 before the year ends | Source: TradingView

Upon closer inspection, we noticed that $10.00 is not much of a resistance. Therefore, the bullish momentum should carry the market to as high as $12.00 before the end of 2019. This is a conservative target considering that we have half a year to reach that goal.

Bottom Line

If you agree with our analysis, wait for the correction and buy as close to $6.00 as possible. If bulls can keep EOS above the neckline, the initial target is $10.00. Take that out and EOS will likely climb to $12.00.

Click here for a real-time EOS price chart.