Second wave of rolling bear market is about to begin, top forecaster says

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A recent wave of declining inventories, exacerbated by signs of a second wave of the coronavirus pandemic, is troubling to say the least. The market liquidation last spring was brief, but brutal.

Our call of the day comes from Yves Lamoureux, president of macroeconomic research firm Lamoureux & Co., who says second wave COVID-19 is about to usher in yet another market pullback

Lamoureux, who correctly predicted a panic event in 2018, originally predicted a three-part bear market until 2022. In mid-March, he told this column that the market bottom was near, and he arrived a few days later, on March 23. – the S&P 500 SPX,
-2,37%
has since recovered 44%. It was the first part.”So we have a second wave coming, we have very rich people taking profits. [on stocks] and we see a lot of speculation in the market. I think the market will start to fall again, ”Lamoureux recently told MarketWatch. This sales phase will start slowly and last until 2021, he added. Another big rebound will follow, with a final drop coming perhaps around 2023.

He said one way to prepare is to invest in Special Purpose Acquisition Companies (SPACs), or shell companies, which raise funds through an initial takeover bid or merger with another company. , usually within two years of listing. He said that with the shares of these companies being around $ 10, the losses are not too severe if the stock market falls.

“We’re playing very defensively buying these SPACs and there’s a really big boom,” said Lamoureux, who recommends GMHI GMHI,
-1,43%,
or Gores Metropolus – its largest stock.

Last month, automotive technology company Luminar, which works with Volvo VOLV.B,
-0,62%
and other leading automakers, have agreed to go public through a merger with GMHI. It appeals to a theme he loves: self-driving cars and trucks.

And that leads to a bigger, longer-term call that he says is about few radars – deflation. He sees three factors in this: robotics and other automated technologies that are pushing workers out of work, a sharp drop in oil prices in the face of growing demand for greener energies, and a 20-year drop in gas prices. immovable.

“Eventually we came out of the pandemic, but we are facing these three big threats which are as big as the pandemic,” he said. “What do you expect once you get out of this pandemic? This is what awaits and it has major consequences on investments. ”

And the ultimate deflating asset is bitcoin, he said. He added that companies are also realizing the importance of cryptocurrency, such as business intelligence firm MicroStrategy MSTR,
-3,87%,
who recently announced that they would use bitcoin as the primary treasury reserve asset instead of treasury bills or cash.

Lamoureux recommends a basket containing the second largest cryptocurrency after bitcoin – Grayscale Ethereum Trust ETHE,
-6,86%.
He thinks Ethereum has more catching up to do than Bitcoin and is a decent bet for 2021.

Last word from Lamoureux. He’s worried about the big five tech stocks that are currently exerting such influence on the S&P – Facebook FB,
-2,24%,
Amazon
AMZN,
-4,12%,
Apple AAPL,
-4,19%,
Netflix NFLX,
-4,18%
and Google parent Alphabet GOOGL,
-3,45%.

“I think the big names in tech are going to do like the big names in tech of 2000, and they’re going to be gone for years to come,” he says.

“Technology moves fast; you don’t see what’s coming, but there is too much focus in these five actions. That’s the risk of not seeing the future and having all that money in five stocks. I think it creates a lot of problems, as we saw in 2000. ”

The steps

YM00 equity futures contracts,
-0,34%

ES00,
-0,44%

NQ00,
-0,80%
are mixed after Wednesday’s heavy losses – a 525 point drop for the DJIA Dow,
-1,92%.
European SXXP Equities,
-0,38%
fall, and Asian also had a tough session.

The buzz

Initial and continuing weekly jobless claims are ahead, as are new home sales. Federal Reserve Chairman Jerome Powell will testify about the pandemic care law on his third day of testimony in Capital Hill. St. Louis Fed Chairman James Bullard and several other Fed officials will speak elsewhere.

Shares of EW Scripps SSP are booming after the owner of the TV channel announced a $ 2.65 billion Berkshire Hathaway MX: BRKB-backed deal from Warren Buffett to buy the ION Media broadcast network.

Actions of the professional services and consulting group Accenture ACNB,
-4,68%
fall on disappointing results.

Stock to Nikola NKLA,
-25,81%
Slips after Wedbush analyst Dan Ives turned bearish on electric truck maker.

Protests erupted in Louisville, Kentucky and elsewhere after a grand jury decided not to charge police with the shooting death of Breonna Taylor, 26, at her home.

When asked if he would commit to a peaceful handover of power after the November election, President Donald Trump said, “We will have to see this.

Table

Goldman Sachs has reduced its US growth forecast for the fourth quarter from 6% to 3%, based on expectations that a US stimulus package will not happen this month. His graph shows what this lack of additional help will look like:

Random readings

Black licorice can kill you.

The pandemic is causing the world to run out of tea.

The race is on to save the injured jaguars in Brazil.

Holidays changed or not, Halloween candy sales are on the rise.

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