Stocks Hit All Time Highs After Russia Announces It Has "No Plans Of Military Incursion Into Ukraine"

Stocks Hit All Time Highs After Russia Announces It Has “No Plans Of Military Incursion Into Ukraine”

Two weeks ago, a 100 point ramp in the S&P started when Russian RIA Novosti tweeted Russia was seeking to “de-escalate the conflict” in Ukraine, quoting the Russian Security Council Chief. Moments ago RIA went for a double when it tweeted a rather amusing statement from the Defense Ministry, namely that Russia has no plans of invading Ukraine.

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[NEWS] LVMH (Louis Vuitton) Invests 61 Billion Won in YG Entertainment


Bridging the fashion and Kpop worlds together, YG Entertainment and fashion brand Louis Vuitton have held hands. 

On August 20, YG Entertainment announced that the company has received an investment from Louis Vuitton Moet Hennessy (LVMH)′s private equity fund group, L Capital Asia. 

YG Entertainment explained that in order to obtain the working funds of 61.5 billion won, it will issue new stocks to increase capital for L Capital Asia. 

For future development and business advancements, YG Entertainment decided to issue new stocks to increase its capital. 

The issued stocks equal to 1,359,699 preferred shares, which is priced at 44,000 won each, and amounts to a 8.3 percent equity stake in YG Entertainment. 

As the private equity fund of LVMH, L Capital Asia mostly invests in companies in Asia. 


Just two weeks ago, the market was collapsing as Russian tension rose. Many sectors and specific stocks were punished far more than the overall market. Quite a few of these plays have rebounded and are now breaking above their former highs. What investors need to understand is that if these plays took a larger hit in the last mini market pullback, they will again be smoked when the markets have a small drop. In other words, investors ran for the hills more quickly in these names and are still skittish. Here are a few of these names that can be shorted in this upper range.

1. Intel Corporation (NASDAQ:INTC): Double Top: $34.85. Current Pice $34.96. Shorting Level: $35.25.

2. Microsoft Corporation (NASDAQ:MSFT): Double Top: $45.75. Current Price: $45.16. Shorting Level: $46.05.

Gareth Soloway

Chief Market Strategist

Car Repos Soar 70% As Auto Subprime Bubble Pops; "It's Contained" Promises Fed

While on the surface the US economy has been chugging along from GDP-crashing “snow in the winter” to GDP-cratering “warmer|cooler than expected weather in the spring|summer|fall”, with bouts of GDP-boosting inventory accumulation inbetween, in recent months two very disturbing trends about that all important dynamo behind the economy, the US consumer, have emerged.

On one hand we wrote three weeks ago that a “shocking” 77 million, or one third, of Americans face debt collectiors: a statistic which crushes any suggestion that US household credit is substantially improving based on trends in 30, 60, or 90-day delinquency, as it means that the real pain is not at the near-end of the default/delinquency timetable, but the far end, which incidentally has just as dire an impact on one’s credit score as a plain vanilla default (and explains why none other than Fair Issac has jumped in to “adjust" its credit methodology to artificially boost FICO scores of these millions of Americans).

On the other hand, we have been closely following the ongoing deterioration of the car subprime loan bubble: something that both Bloomberg and the Fed have both also been paying close attention to recently, yet a bubble which nobody wants to burst, because as we wrote several days ago, it is none other than the subprime car loan bubble that allowed car production to surge the most last month since Obama’s Cash for Clunkers capital misallocation program, in the process lifting overall manufacturing and Industrial Production, and thus GDP.

Earlier today Experian released its latest, Q2, metrics that tie these two very worrying trends together, namely the trend in delinquencies, defaults and repossessions.

As NBC summarizes: “The repo man is getting very busy as a growing number of car and truck owners are struggling to make their monthly auto loan payments. Experian, which analyses millions of auto loans, said Wednesday that the percentage of those loans that were delinquent or ended up in default with the vehicle being repossessed surged in the second quarter of this year.”

Hyperbole? Hardly. In fact, the auto loan subprime bubble may be the latest to burst (after student loans) as the rate of car repossessions jumped 70.2 percent in the second quarter, with much of that increase coming from finance companies not run by automakers, banks or credit unions. The good news: the percentage of auto loans that end in default is just 0.62% of all auto loans. However, as everyone but the Fed knows, what matters is the flow, not the stock, and the direction and acceleration in defaults simply means that the maximum saturation point has been reached and going forward lenders will experience ever greater losses, which in turn will limit their willingness to offer subprime loans to US consumers desperate to find a house (because clearly one doesn’t need to home when one can sleep in their Chevy Tahoe).

Experian also reported that the 30-day delinquency rate was up 0.2 percent and the 60-day rate rose 7 percent in the quarter"We’re starting to see a slight uptick in the number of consumers struggling to make their automotive payments on time; however, we have to keep in mind that these percentages are still extremely low,” said Melinda Zabritski, senior director of automotive finance for Experian Automotive.

A chart of the Y/Y change in 60-day delinquency rates as of Q1:

Zabritski added via CNBC that “The number of delinquencies and repossessions rising is what we would expect as the auto industry sells more vehicles,” “But this slight uptick is one to keep an eye on.” The surge in delinquencies and repossessions is being driven primarily by borrowers with subprime and deep subprime credit scores.

The main reason to keep an eye on this “slight uptick” is that the underlying notional of total auto loan balances just hit a new all time high: in the second quarter climbed 11.7 percent to an all-time high of $839 billion, according to Experian. It doesn’t take much of a deterioration in payment terms and credit quality before bad loans surge when the underlying debt is hitting record notionals quarter after quarter.

Some data: the average charge-off was $8,149 in the second quarter up $932 compared to the same period of 2013, and rapidly rising.

Of course, it wouldn’t be a CNBC report if it didn’t end on a positive note:

Zabritski knows many people are worried the industry is creating a financial storm that will end badly, but she says subprime sales are still far below normal.

"The growth in subprime auto loans looks dramatic because it was so restricted in the last few years," she said. "But this is not mismanaged, rapid growth. We are still well below levels we saw during the recession."

Because somehow one can compare a period in which the Fed has a $4.4 trillion in balance sheet leverage with a period in which… it doesn’t? Good to know then that at least consumer subprime lending is not as bad as it was then, and instead all of the Fed’s proceeds have simply made their way into the bubble of a stock market.

Finally, for the curious, here are some charts from the most recent, Q1, Experian presentation on the matter. We will update these once the latest slides are unveiled by the credit company.

The average credit score on top leased models:

The average loan vs lease payment for the top 10 most popular car models.

The top New loan lenders:

And the top Used loan lenders:

But the one reason we know the subprime auto loan bubble has burst and is about to lead to another round of devastation around the nation is one simple statement: “The New York Fed dove into lending data, and its economists found that the bubble fears may be misplaced.” In other words, it is “contained.”

Hm… where have we heard that before?

*  *  *

Don’t worry though - it’s not as bas as the peak of the recession!!!

Shiller P/E Shows Confidence in Profit Outlook: Chart of the Day

By David Wilson

     Aug. 21 (Bloomberg) — Valuations of U.S. stocks relative to 10-year average earnings may be more of a show of confidence than a cause for concern, according to Salil Mehta, an adjunct professor at Georgetown University.

     The CHART OF THE DAY compares what’s known as the cyclically adjusted price-earnings ratio, compiled by Yale University Professor Robert Shiller, with profit figures that Mehta highlighted yesterday on his Statistical Ideas blog. The latter is inverted to ease comparisons.


     Mehta’s numbers are based on an analysis of Shiller’s earnings data. They show the previous decade’s biggest drop in annual profit for each year displayed in the chart, which goes back to 1900. The current low point is the 60.5 percent plunge in 2008, during a U.S. recession and financial crisis.

     “Unusually depressed values” for past earnings may lead to a ratio that “is ‘forgiven’ or discounted” even though it’s historically high, Mehta wrote. This happens because investors don’t expect a similar plunge in profit any time soon, the New York-based analyst wrote.

     Shiller’s ratio, known as CAPE, ended last week at 25.7. The figure was about 55 percent higher than the average since 1881, which is shown in the chart. The ratio has exceeded the average, 16.6, for all but nine months since 1991.

     “The CAPE was never intended to indicate exactly when to buy and to sell,” the New Haven, Connecticut-based professor and Nobel Prize winner wrote in an Aug. 16 commentary for the New York Times, in which he said U.S. stocks were expensive. “The market could remain at these valuations for years.”

Watch on

Swing Trade Setups Galore: S&P Marches Towards Key Level

A Long Term View of The Netflix All‒Time High

Netflix hit a new all‒time high in early trading today.

It climbed as high as $476.15 per share.

Netflix first went public in 2002. At its IPO, it traded for roughly $7 per share. That means it is up more than 6,000% since that day.

Netflix has largely revolutionized the space for on demand content streamed over the Internet. Today, it challenges major brand names like HBO and Starz. It was also one of the driving forces behind the eventual bankruptcy and failure of Blockbuster video stores.

Here is a chart showing a long term view of Netflix:



The precious metals have come under some decent selling pressure, as GOLD is trading around $1275/oz. Following suit are the gold miners and Agnico Eagle Mines Ltd (USA)(NYSE:AEM) is no exception, as it is down nearly 4.5%. This weakness has peaked my interest as a pro trader and will be looking for a good entry point, for a long side trade. On the chart below Agnico Eagle Mines Ltd (USA)(NYSE:AEM) is currently holding an up sloping trendline. Should this trendline fail as support then this stock is headed straight for $35.30 and then the very attractive buy level of $33.25. Keep this stock on your radar and use those two levels I have given you to make easy money!


Come trade with us as we provide calls like these from the past month and more. Get our live trades exactly when we enter and exit the markets for profit… step inside the Elite Round Table now and don’t look back!





Parm Mann
Elite Round Table
Follow me on twitter: @ParmMannTrader
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Many China small cap stocks are ripping higher, finally catching fire on the back of a Shanghai major rally (10%+ lately). Large caps like Baidu Inc (NASDAQ:BIDU) and Vipshop Holdings Ltd (NYSE:VIPS) have already rallied insane amounts in 2014, however, until recently, the small cap China ADR’s have lagged, staying near/at their 52 week lows. That is now changing. Look at stocks like China Finance Online Co. (NASDAQ:JRJC) and China Green Agriculture, Inc (NYSE:CGA). China Finance Online is up more than 100% in the last three trading days.

While these mentioned above have rallied too much to be a buy at this point, there are plenty of solid, profitable Chinese small caps that are still trading at or near 52 week lows. Be on high alert. Do research and find those trading on the NASDAQ or NYSE that are profitable and at their recent lows. They may just be the next mega mover.

Gareth Soloway

Chief Market Strategist