Japan stocks PLUNGE!

Tech stocks in correction - nearing bear market.

What does the crystal ball tell us? Where is the PPP?

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Warm Up

- OMG - Did you see that?

- Fear - blood in the streets

- Looking for someone to blame for the selloff

- Boeing news....Finally

Market Update

- RISK off - all risk assets (aside from bonds) down in August

- Bitcoin - CRUSHED - as with other cryptos - so much for safe-haven

- 13:1 Day Decliners to Advancers (that is pretty significant.

- Records broken - Worst day in 50 years for one stock

Where is the PPP?

- Now we are hearing about an emergency cut - looking for a 0.75% cut (Jeremy Seigel)

- Investors looking for a save - Plunge Protection Team!!!!!!!!!!!!!!

- Seems like Tuesday in Japan - PPP to the rescue - +10%

Bitcoin and ETH

- Seriously - takes it on the chin down 15% with global market sell-off

- What happened to it being a safe-haven - all but discounted at this point....

Japan's first increase in decades

- Actually, last increase was 2017 - so 17 YEARS OF LOW RATES

- The Widowmaker trade is finally working - but for how long?

- Japan's major stock market - YEN Up 11% since 7/11/2024 and  the Nikkei is down  23% (28% at low on Monday) since 7/11/2024

- Carry-Trade (borrow Yen at low rate and reinvest) BLOWING UP

- WORST day for Japan's markets since Black Monday in 1987

--- The loss of 4,451.28 points on the index was also the largest in terms of points in its entire history.

-=-=-=-= This is not the first time Japan's central bank has caused this type of situation. Their entire investing and monetary process is very dangerous.

-=-=-=-=- - Japan's Nikkei had the best day since 2008 on Tuesday

Repercussions

- Stocks around the world got hammered - worrying about YEN unwind as well as the earnings and outlook from Tech

- Kospi -8% down Monday

- World stocks off by 3%+

- UGLY moves and lots of trading opportunities

- $1 Trillion in market cap erased from Mega-Caps Monday (Mag7)

AND

- A sharp drop in U.S. stocks is provoking selling from volatility-sensitive funds, exacerbating a selloff

- Volatility control funds - systematic investment strategies that typically buy equities when markets are calm and sell when they grow turbulent  have gorged on stocks as indexes soared to record highs in 2024

- More recently, they have begun selling, as worries over the economy and tech earnings rattle investors: volatility control funds have dumped about $83.6 billion of U.S. equity futures over the last two weeks

VIX

- SPIKES to 65 on Monday morning.... (Then comes down to about 36 on the close)

- Historical spike like that  are  interesting signs that it may be end of route (or getting close)

- - 80's for Pandemic and peak of Financial Crisis

---- Unbelievable move in 3 days that seems that most people were unprepared for

Economic Issues

- Nonfarm payrolls grew by just 114,000 in July, below the downwardly revised 179,000 in June and the Dow Jones estimate for 185,000.

- The unemployment rate edged higher to 4.3%, its highest since October 2021, triggering an economic rule on recessions.

- Health care again led, adding 55,000 to payrolls. Other notable gainers included construction (25,000), government (17,000), and transportation and warehousing (14,000).

- Average hourly earnings increased 0.2% for the month and 3.6% from a year ago. Both figures were below respective forecasts for 0.3% and 3.7%.

Google loses Anti-Trust

- Google’s payments to make its search engine the default on smartphone web browsers violates US antitrust law, a federal judge ruled Monday,