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Americans Have Lost $20 Trillion Since The Start Of 2022

Americans Have Lost $20 Trillion Since The Start Of 2022

Citing estimates from JPMorgan, over the weekend Bloomberg wrote that courtesy of…

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Americans Have Lost $20 Trillion Since The Start Of 2022

Citing estimates from JPMorgan, over the weekend Bloomberg wrote that courtesy of a Biden administration terrified of what soaring inflation will mean for the Democrats in the midterms, and a Fed that is determine to do anything - even crash the market and spark a recession - to do Joe Biden's "kill inflation" bidding, the US faces a new scary threat: a plunge in wealth which JPM estimates at least $5 trillion, and could reach $9 trillion by year-end.

In short, the world’s richest nation is waking up to an unpleasant and unfamiliar sensation: It’s getting poorer... and worst of all, it's getting poorer at the behest of its own leaders.

Since the start of the year, the S&P 500 Index is down 18%, the Nasdaq 100 has lost 27% and a Bloomberg index of cryptocurrencies has plunged 48%. That all amounts to “a wealth shock that is set to drag on growth in the coming year,” JPMorgan economists led by Michael Feroli wrote in a note Friday.

Of course, this is not news to regular readers who have known about this one unpleasant side-effect of Biden's phobia for higher prices: we pointed out as much almost two weeks ago.

We do however disagree with JPMorgan that "only" $5 trillion has been lost so far: as the following chart shows, US household net worth - which consists almost entirely of financial assets (and a smattering of real estate) - tracks the S&P with an almost 1.000 correlation. Well, that means that with the S&P briefly entering a bear market on Friday and sliding approximately 20% from its all time high, reached just a few days into 2022 when US net worth hit $150 trillion, it means that US households have seen about $20 trillion in net worth disappear in 2022 under Joe Biden, a loss far greater than under any other US president in history.

One reason why Biden hasn't freaked out over this record crash in US household net worth, is that so far, the richest Americans have borne the brunt, with US billionaire fortunes down $800 billion since their peak amid the sharp losses in stocks, crypto and other financial assets.

Billionaires were the biggest winners of 2020 and 2021. Now they’re losing more than almost everyone else. The Bloomberg Billionaires Index, a daily measure of the wealth of the world’s 500 richest people, has dropped $1.6 trillion since its peak in November.

Leading the way are the Americans on the index, who have lost $797 billion since their peak. Perhaps the most humbled by it all is the world’s richest person, Elon Musk. He’s lost $139.1 billion, or 41% of his wealth, since November, when his net worth briefly surpassed $340 billion. Amazon.com Inc. founder Jeff Bezos, the second-richest person, lost $82.7 billion, or 39% of his peak wealth.

But that's just the beginning, and surging interest rates are also starting to rattle the housing market, where middle- and working-class families have the bulk of their wealth.

It all adds up to the sudden removal of a major prop to confidence: ever-bigger nest eggs, which of course is on purpose: in its attempts to stamp out the highest inflation in decades, the Fed needs Americans to curb their spending, even if it requires an economic slowdown to get there. However, it still remains unclear just how the Fed hopes to snuff out supply-side inflation which the Fed's actions have no control over.

In any case, neither the rich nor the poor are happy:

“It’s painful to get back to normal after really being in a fantasy world last year,” said John Norris, chief economist at Oakworth Capital Bank. “It’s going to feel a lot worse than it actually is.”

Maybe, but it's already feeling quite terrible for most, and according to the latest Biden approval poll, things have never been worse,  with nearly 70% saying the economy is bad, that the senile president is "slow to react when issues arise", and that the state of the country is "uneasy " and "worrying."

All we can add here is: just wait another 2.5 years of Biden rule.

And while the wealth losses among the top 0.001% do in fact reduce inequality, that won’t be much comfort to most people who worry about the U.S.’s widening disparities, especially those who only pretend to worry - like most socialist Democrats - while in reality hoping to become ultra rich themselves by being career politicians who never actually achieve anything but merely talk about it (and in the case of Nancy Pelosi, putting on some quite profitable trades).

“In a relative sense, it’s going to make the inequity a little lower -- but in an absolute sense, everyone suffers,” said Reena Aggarwal, director of Georgetown University’s Psaros Center for Financial Markets and Policy.

Like many, Aggarwal is concerned that falling markets will create problems for the broader economy. “Some correction was needed but this is a pretty huge correction, and it’s not stopping.”

And while the rich may be a little less rich, they will certainly survive. The problem is when the trickle-down pain hits the middle class: a downturn in housing - made likely by a surge in mortgage rates to the highest since 2009 as we described in "Is The Housing Crash Starting?") - threatens wider reverberations. Over the last decade, the robust real estate market added $18 trillion in market value to owner-occupied home valuations.

Meanwhile, US spending has been lifted in recent years by owners tapping the values of their homes for cash, courtesy of HELOCs. As expected, the practice of home equity extraction likely came to a jarring halt this year after more than 40% of refinancings in the final quarter of last year saw homeowners pull cash out of their homes.

And since real estate is more evenly distributed than financial wealth - while the top 1% owns more than half of U.S. holdings of stocks and mutual funds, in real estate the bottom 90% owns more than half of the total, while the top 1% holds less than 14% - the pain of the coming housing crash will be felt far more widely than just that of the FAAMGs.

“Higher home prices and sharply higher mortgage rates have reduced buyer activity,” Lawrence Yun, National Association of Realtors chief economist, said in a statement Thursday. “It looks like more declines are imminent in the upcoming months.”

Worse, due to lagged home prices, it could take a while before Americans realize that their pandemic home-price gains have evaporated. Even the stock market selloff could take a while to translate into spending in a way that could tip the U.S. into recession.

“A general selloff in the equity market may have a dampening effect,” said Chris Gaffney, president of world markets at TIAA Bank, but there’s a lag for investors. “They look at their statements on a quarterly basis and all of a sudden they say, ‘Oh my goodness, my stock-market portfolio is down 20%, maybe I shouldn’t take that vacation,’ or ‘Maybe I shouldn’t buy that larger TV or a new car.’”

Tyler Durden Mon, 05/23/2022 - 06:55

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Economics

Relief rally or sustained bounce?

In this video insight Roger discusses current market conditions with equities having rallied off the lows recently thanks to a lower oil price and a retreat…

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In this video insight Roger discusses current market conditions with equities having rallied off the lows recently thanks to a lower oil price and a retreat in bond yields amid fears of a recession. Have we reached the bottom yet?

Transcript

Roger Montgomery:

You have probably been relieved seeing the market rally over the last few days. The S&P500 Index made a low on June 17 and has since bounced almost eight per cent, dragging markets globally up with it. I was personally feeling pleased with my recent additional investment in the Polen Capital Global Small and Mid Cap Fund. But investing is a long-game, we’re in it for years not minutes.

Nevertheless, one of the biggest objections to investing during a crisis – which history has shown to be the best time – is the possibility the market could fall further. And it could. 

Equities have rallied off the lows recently thanks to a lower oil price and a retreat in bond yields amid fears of a recession. Recession concerns are dominating the narrative and even the head of the U.S. Federal Reserve, Jerome Powell has admitted the risk. Meanwhile google searches for “recession” have spiked ten-fold and are as high as during the Global Financial Crisis and the onset of the COVID pandemic.

Perhaps counterintuitively, recessions can be good news for equities particularly if prices have already fallen dramatically. That’s because, rather than focusing on the negative pressure on company earnings, investors instead look to the fall in bond yields and the consequent positive effect on present values.

But should we be getting too excited? Have we hit the bottom already? Even though I have recently invested additional capital, I am not certain we have hit the bottom. I can see reasonable arguments to suggest there could be more losses for equities. To be clear of course this would be a positive for anyone who considers themselves a net buyer of shares. The lower the price goes, the higher the subsequent return.

The U.S. Federal Funds futures curve has recently reduced its bet on additional aggressive rate hikes and is even forecasting an easing of interest rates next year. Along with the decline in the oil price and other commodities such as wheat, corn and copper, the reversal of rising bond rates suggests investor sentiment had switched recently from inflation to recession.

Unfortunately, the optimism is due to the U.S. Federal Reserve’s history of backing off rate rises whenever the equity market has fallen between 15 and 20 per cent. It’s known as the “Fed Put.”

It is true that the U.S. Federal Reserve eases aggressively when bear markets in equities precede recessions. However, it is also true that when the Fed has chickened out the circumstances were very different to today.

Since the 1990s, and certainly after the GFC, the primary problem confronting central banks and governments has been pallid organic economic growth and low inflation, and even the intermittent threat of deflation. Understandably, rate cuts make sense.

But prior to the 1990s the Fed’s response differed. In the 1970s for example persistent inflation meant Fed policy was aimed squarely at fighting inflation, with less concern for the impact on economic growth. Back then the Fed raised rates despite already large falls in the stock market and a weakening economy.

I cannot be sure of whether today’s U.S. central bank will be as callous as it was decades back however the reality is inflation has broken out and wage growth is accelerating with unions protesting and striking, risking a dangerous wage-price spiral.

So have we reached the bottom yet? Well, uncertainty about the Fed’s stance is sure to mean more volatility. Until we get a clear read on interest rates, the lows could easily be retested.

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Government

5 Top Biotech Stocks To Watch In July 2022

Amid choppy markets, could there be potential in these top biotech stocks?
The post 5 Top Biotech Stocks To Watch In July 2022 appeared first on Stock…

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Should Investors Be Watching These Top Biotech Stocks In The Stock Market Now?

Just as most people think that pandemic woes are behind us, we now have the emergence of the monkeypox. While this virus may not be as contagious as the coronavirus, there is still a real cause for concern. On Tuesday, the Centers for Disease Control and Prevention (CDC) announced the activation of an emergency operations unit for monkeypox. This signals the initial stages of a public health concern. Epidemiologist Dr. Eric Feigl-Ding believes that the number of cases could reach 100,000 worldwide by August. In light of these circumstances, biotech stocks could be gaining more attention in the stock market. 

Furthermore, the coronavirus is not going away anytime soon. Recently, the U.S. Food and Drug Administration (FDA) Vaccines and Related Biological Products Advisory Committee (VRBPAC) voted that there is a need to modify the current strain composition of available COVID-19 vaccines to target the Omicron variant. If this is approved, vaccine makers such as Pfizer/BioNTech, and Moderna (NASDAQ: MRNA) will need to provide modified boosters of their coronavirus vaccines. In fact, Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) just announced a new vaccine supply agreement with the U.S. government. Under the agreement, the U.S. government will receive 105 million doses with an option of up to 195 million additional doses. With all this in mind, here are five of the top biotech stocks to note in the stock market today. 

Biotech Stocks For Your July 2022 Watchlist

Regeneron Pharmaceuticals 

biotech stocks to buy (regn stock)

First up, we have the integrated biotech company, Regeneron Pharmaceuticals. Essentially, the company discovers, invents, manufactures, and commercializes medicines for serious diseases. For the most part, its medicines and products aim to help patients with eye diseases, allergic and inflammatory diseases, cancer, cardiovascular, and metabolic diseases. REGN stock has been trading sideways over the past year. 

Having said that, the company received a boost on Wednesday as the U.S. FDA has accepted for review the EYLEA Injection supplemental Biologics License Application for every 16-week 2 mg dosing regimen. This specifically caters to patients with diabetic retinopathy. Should this go according to plan, the 16-week dosing regimen could offer patients a potentially longer treatment interval. Also, it will allow doctors to have greater flexibility to individualize treatment. Given such a positive development, should investors be paying more attention to REGN stock?

[Read More] Stock Market Today: Dow Jones, S&P 500 Falter; Walgreens Stock Slides Despite Strong Quarter

Sanofi

best health care stocks to buy now (SNY stock)

Another top biotech name making waves this week is Sanofi. The France-based company engages in the research, development, and marketing of therapeutic solutions. Over the past week, there have been several key developments that could potentially excite investors. For starters, the company and GSK (NYSE: GSK) announced positive data from their vaccine trial last Friday. The vaccine candidate is the first to ever demonstrate efficacy in a placebo-controlled trial in an environment of high Omicron variant circulation. 

Furthermore, Sanofi’s Nexviadyme (avalglucosidase alfa) has recently gained marketing authorization from the European Commission. For the uninitiated, this is an enzyme replacement therapy for long-term treatment of both late-onset and infantile-onset Pompe disease. This is a significant development because Nexviadyme is the first and only newly approved medicine for Pompe disease in Europe since 2006. On that note, would you say that SNY stock is a top biotech stock to watch?

Novavax

best biotech stocks (NVAX stock)

Following that, let us look at the biotech company, Novavax. In detail, it promotes improved health globally through the discovery, development, and commercialization of vaccines to prevent serious infectious diseases. Its recombinant technology platform harnesses the power and speed of genetic engineering. As a result, the company produces immunogenic nanoparticles designed to address urgent global health needs. That said, NVAX stock has been struggling to find its footing since the start of the year. 

During the VRBPAC meeting, Novavax highlighted data showing that its protein-based coronavirus vaccine showed epitopes across both the original strain and emerging variants. Therefore, it will be able to contribute to the generation of broadly cross-reacting antibodies. The company also provided pre-clinical data that suggests boosting with Novavax’s Omicron or prototype vaccine will induce an immune response against Omicron variants. Overall, there are reasons to believe that Novavax will close the second half of the year on a better note. With that in mind, would you consider adding NVAX stock to the top of your watchlist?

Arrowhead Pharmaceuticals 

ARWR stock

Arrowhead Pharmaceuticals develops medicines that treat intractable diseases by silencing the genes that cause them. It uses a portfolio of ribonucleic acid (RNA) chemistries and modes of delivery. Most of its therapies trigger the RNA interference mechanism to induce rapid, deep, and durable knockdown of target genes. Those following the medical space would notice that gene therapies have been gaining popularity within the industry over the past few years. Hence, it would not be surprising if investors are taking note of Arrowhead. 

As a matter of fact, the company recently claimed that its experimental drug fazirsiran can reduce the accumulation of mutant protein known as Z-AAT by 83%. This result is based on an open-label phase 2 trial involving 16 volunteers with alpha1-antitrypsin deficiency disease. For now, there is still no approved treatment for such genetic liver disease. All in all, Arrowhead appears to be making strides in the right direction. Thus, should you be keeping a closer tab on ARWR stock?

[Read More] Best Long-Term Stocks To Buy Now? 5 Semiconductor Stocks To Know

Global Blood Therapeutics

gbt stock

To sum it all up, we have the biopharmaceutical company, Global Blood Therapeutics. As its name suggests, this is a company that specializes in blood-related treatments. The company is currently focused on Oxbryta, an FDA-approved medicine that inhibits sickle hemoglobin polymerization. In addition, it is also advancing its pipeline program in Sickle Cell Disease with inclacumab, and GBT021601. Impressively, GBT stock has been on bullish momentum lately, rising more than 28% within the past month.

Not to mention, the company announced on Thursday that it initiated the Phase 2 portion of its Phase 2/3 trial of GBT021601. The study aims to evaluate the safety, tolerability, efficacy, pharmacokinetics, and pharmacodynamics of the drug. So far, the preclinical results and data have been encouraging. Smith-Whitley, the company’s head of research and development, believes the drug has “the potential to improve on the clinical results achieved with Oxbryta® at a lower daily dose.” If so, this would be a huge boost for the company as it continues to work towards its long-term goals. All things considered, is GBT stock a buy right now?

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The post 5 Top Biotech Stocks To Watch In July 2022 appeared first on Stock Market News, Quotes, Charts and Financial Information | StockMarket.com.

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Bonds

Bitcoin nears worst monthly losses since 2011 with BTC price at $19K

Bitcoin price action will seal monthly losses over 40% for the first time in 11 years if it closes at $19,000.
Bitcoin (BTC) drifted…

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Bitcoin price action will seal monthly losses over 40% for the first time in 11 years if it closes at $19,000.

Bitcoin (BTC) drifted further downhill into the June 30 Wall Street open as United States equities opened with a whimper.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

U.S. dollar returns to multi-decade highs

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it abandoned $19,000 to hit its lowest in over ten days.

Bulls failed to preserve either $20,000 or $19,000 at the hands of limp U.S. stock market moves, the S&P 500 and Nasdaq Composite Index down 1.8% and 2.6% respectively at the time of writing.

At the same time, the U.S. dollar once again staged a comeback to fix a trajectory toward twenty-year highs seen this quarter.

The U.S. dollar index (DXY) was above 105.1 on the day, coming within just 0.2 points of its highest levels since 2002.

U.S. dollar index (DXY) 1-day candle chart. Source: TradingView

"The US dollar (DXY) looks set to test highs last seen in December 2002 as the short-term downtrend is broken convincingly amid risk markets' continued crumble," researche and trader Faisal Khan summarized on Twitter.

Data on inflation meanwhile once more suggested the worst could be behind the market.

As Cointelegraph reported, however, central banks began to acknowledge that the low rates seen before COVID-19 may never return.

Bulls' worst month in 11 years

With the majority of on-chain metrics now at historic lows, price data hinted how far BTC could theoretically go in a bear market increasingly unlike the rest.

Related: No flexing for Bitcoin Cash users as BCH loses 98% against Bitcoin

Should it close at current levels of $19,000, BTC/USD would seal monthly losses of over 40% for June 2022.

That would make it the worst June ever and the heaviest monthly losses since September 2011, data from TradingView and on-chain monitoring resource Coinglass confirms. 

Even March 2020 and the 2018 and 2014 bear markets were less severe on monthly timeframes. 40% drops were last seen when BTC/USD traded at $8.

BTC/USD monthly returns chart. Source: Coinglass

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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