fbpx
np financial logo

Global Food Prices are Rising: Will it Affect the Stock Market?

Global Food Prices are Rising: Will it Affect the Stock Market? Let us take this opportunity to analyse the relationship between rising in Food Prices and its effect on inflation, interest rate and ultimately on the Stock Market.
As per FAO (Food and Agriculture Organization) and as shown in the chart (from https://www.statista.com/chart/20165/un-global-food-price-index/) below for the rise in Food Prices it is getting clearer that the Food Prices are on the uptick. If we take the base for Food Prices as 100 as of 2014-2016 average Food Prices level then the Food Prices around the world is 16% dearer most recently.
Global Food Prices are rising
Now as per common sense, if the rise in Food Prices continues to the upside, then it may create the feeling (or actual?) of so-called “Inflation” which might influence (or force?) the central banks (especially the Fed) to think of raising the interest rates. There is a wonderful quote on this “hike in interest rate” from Ben Casselman as below:
Global Food Prices are rising
This means no one (including the Fed?) actually know for certain that whether this rise in Food Prices will eventually result in rising interest rates across the globe which may affect the Stock Market and most importantly when. One better approach parallel to this rise in Food Prices is the present status of the all-important Stock Market Index called the S&P 500.
Global Food Prices are rising and S&P 500
The S&P 500 is possibly (because we need to know at the end of this week whether last week high was a swing high or not) creating a Double Top at the price levels of 3,963.88 and 3,988.85. If the index S&P 500 does create a double top at the end of Friday (26.03.2021) week close and its low is taken out then from our proprietary Index Trading Strategy the immediate Short side of the index S&P 500 can be as below from the effect of rising in Food Prices:
1. 3,887.52
2. 3,855.88
3. 3,824.49
4. 3,819.57
5. 3,779.81
6. 3,753.22
7. 3,747.41
8. 3,722.90

Start trading like us as a Professional and develop yourself to become an expert trader in Indices or any of the asset classes, you want to consider for buying or selling when you are trained by us.

To know how to take advantage of our proprietary and predictive price analysis of the Index Trading, especially ASX Index (ASX200) and S&P 500, please join our Index trading desk. Know how to take advantage of the end of this shortest bear market.

Now you can learn how to trade all the Indices, especially ASX Index (ASX200) and S&P 500, with us to explore the possibility of earning passive income keeping your day job.

Our Proprietary Index Trading Strategy will guide you through every step of your trading in Index Trading, especially ASX Index (ASX200) and US Stock Market S&P 500, and explore the possibility of earning extra income. Learn what all other Indices we are Trading in our Index Trading Asset Class. Develop yourself as a professional trader capable of capturing second income in the future with us.

Please click on the Contact Us link: Goo.Gl/2SRZoG

Call us on +61 3 9015 4858
email: info@npfinancials.com.au

In this blog post let us discuss the hot topic: Is Revolt in Bond Market= Spike in 10 Year Treasury Yield= Higher Inflation= Share Market Correction?
Everyone now is talking about the USA 10 Year Treasury Yield. Before we delve more into the 10 Year Treasury Yield, let us first understand the definition of 10 Year Treasury Yield.
The 10 Year Treasury Yield or the 10 Year Treasury Rate is nothing but the Yield (Rate) the investor will receive for investing in a USA government-issued Treasury security (similar to Bond) which is having a maturity period of 10 years. Many pandits use this 10 Year Treasury Yield as a risk-free rate when assessing individual security.
This 10 Year Treasury Yield has recently spiked to 1.60% (highest for the current year) on February 25, 2021, as shown on the chart (source: https://ycharts.com/indicators/10_year_treasury_rate) below. The 10 Year Treasury Yield was at 1.88% (highest for last year) on January 2, 2021.
Spike in 10 Year Treasury Yield
Now the all-important question: Is Revolt in Bond Market= Spike in 10 Year Treasury Yield= Higher Inflation= Share Market Correction? As of now and as per our understanding it is too early to conclude anything on this. Many people believe that rising inflation expectations can be a reason for this spike in 10 Year Treasury Yield. We need to remember that this 10 Year Treasury Yield is not inflation-adjusted. The fear of possible higher inflation can lead to the speculation that the Fed might have to adjust their money printing policy sooner by possibly increasing interest rate or reducing bond purchases.
If the money printing policy is adjusted thereby reducing the constant flow of free money to the stock market, then we can expect a stock market correction, else these are only mere speculation to buy at dips.
From our understanding, if S&P500 is not closing below the 3,660 level and its low is not getting taken out then till that time, it is nothing but speculation.

Start trading like us (and not like the Redditors) and develop yourself to become an expert trader in Treasury Yield or any of the asset classes, you want to consider for buying or selling when you are trained by us.

To know how to take advantage of our proprietary and predictive price analysis of the Index Trading, especially ASX Index (ASX200) and S&P 500, please join our Index trading desk. Know how to take advantage of the end of this shortest bear market.

Now you can learn how to trade all the Indices, especially ASX Index (ASX200) and S&P 500, with us to explore the possibility of earning passive income keeping your day job.

Our Proprietary Index Trading Strategy will guide you through every step of your trading in Index Trading, especially ASX Index (ASX200) and US Stock Market S&P 500, and explore the possibility of earning extra income. Learn what all other Indices we are Trading in our Index Trading Asset Class. Develop yourself as a professional trader capable of capturing second income in the future with us.

Please click on the Contact Us link: Goo.Gl/2SRZoG

Call us on +61 3 9015 4858
email: info@npfinancials.com.au

Our Blog Post dated January 31 2021:
Are these redditors (r/wallstreetbets) strong enough to disrupt the Stock Market? In this blog post, we are going to throw some lights on the latest Stock Market movements, especially when everyone is talking about the Redditors and their effect on the Stock Market in particular.
Who are these redditors and what are they doing in Stock Market? According to Wikipedia for these redditors, “r/wallstreetbets, also known as WallStreetBets or WSB, is a subreddit where participants discuss stock and option trading”. The median age of these redditors is only 24 as they say. These “kids” (the redditors) in the Stock Market are also known as “degenerates”. The trading strategy of these redditors for the Stock Market is not well known from either a fundamental or technical perspective. Nor the redditors have demonstrated their interest in the risk management aspect of Stock Market trading. What the redditors are trying to do is to identify the most short-sell-interest (significant short positions) stock (probably by mutual fund(s)), then buy and hold it and thereby significantly pushing the price of the same (also known as meme stocks). Lets see some example of these meme stocks created by the redditors:
1. Gamestop Corp (ticker: GME): On 12-Jan-2021 GME was trading at a price of US$ 19.94. Just after 11 trading days, GME shot up to an astronomical 2,400% from the buying frenzy of these redditors and was trading at a high of $483.00 as shown below:
Are these redditors (r/wallstreetbets) strong enough to disrupt the Stock Market?
Now let us see the effect of these redditors on S&P500 Stock Market index:
S&P500 stock index
As far as our understanding goes, if S&P500 Stock Market index closes below 3,830 level in a weekly basis and its goes lower then this level of 3,830 then we will consider this as a side-effect of these redditors and then we will come up with our targets for S&P500 Stock Market index in our next blog post.
Till then relax and possibly look for buying opportunities in well known companies like Tesla, Apple, Square, Afterpay etc.

Start trading like us (and not like these redditors) and develop yourself to become an expert trader in any Treasury Yield or of the asset classes, you want to consider for buying or selling, when you are trained by us.

To know how to take advantage of our proprietary and predictive price analysis of the Index Trading, especially ASX Index (ASX200) and S&P 500, please join our Index trading desk. Know how to take advantage of the end of this shortest bear market.

Now you can learn how to trade all the Indices, especially ASX Index (ASX200) and S&P 500, with us to explore the possibility of earning passive income keeping your day job.

Our Proprietary Index Trading Strategy will guide you through every step of your trading in Index Trading, especially ASX Index (ASX200) and US Stock Market S&P 500, and explore the possibility of earning extra income. Learn what all other Indices we are Trading in our Index Trading Asset Class. Develop yourself as a professional trader capable of capturing second income in the future with us.

Please click on the Contact Us link: Goo.Gl/2SRZoG

Call us on +61 3 9015 4858
email: info@npfinancials.com.au

Our Blog Post dated January, 25 2021:
The answer to the above topic, “Stock Bear Market under Covid is over or not”, is YES. We will analyse the topic in this blog post and get the answer to the question- is the Shortest Bear Market in Stocks over?
Below mentioned is a snapshot of all the Bear Markets in Stocks so far (source: https://www.visualcapitalist.com/sp-500-market-crashes/):
End of the shortest Bear Market
Following observations can be made from the above Bear Markets chart:
1. Maximum drop during a Bear Market was 86%. This happened during Black Tuesday/ Great Crash. This Bear Market drop during Sep 16, 1929 — Sept 22, 1954 lasted for 7,256 trading days.
2. The latest Bear Market drop for Covid- 19 lasted for only 154 trading days (as per the chart below). This latest Bear Market drop was for 35.71% (as per the chart below).
The latest Bear Market drop started from Feb 20, 2020 in S&P 500 stock index. The highest value of S&P index was 3,397.20 on Feb 20, 2020. It dropped to 2,184.19 on Mar 22, 2020. S&P 500 index reached the high of 3,397.20 again on Aug 19, 2020 (as per the chart below).
Is the Stock Bear Market under Covid over?
Our observation here is: like the GFC Bear Market got over during the week number 15 (from 08-Apr-2013 to 13-Apr-2013), the recent Bear Market has also got over during the week number 17 (from 17-Aug-2020 to 21-Aug-2020) when it reached and surpassed the value of 3,397.20.

Start trading like us and develop yourself to become an expert trader in Treasury Yield or any of the asset classes, you want to consider for buying or selling, when you are trained by us.

To know how to take advantage of our proprietary and predictive price analysis of the Index Trading, especially ASX Index (ASX200) and S&P 500, please join our Index trading desk. Know how to take advantage of the end of this shortest bear market.

Now you can learn how to trade all the Indices, especially ASX Index (ASX200) and S&P 500, with us to explore the possibility of earning passive income keeping your day job.

Our Proprietary Index Trading Strategy will guide you through every step of your trading in Index Trading, especially ASX Index (ASX200) and US Stock Market S&P 500, and explore the possibility of earning extra income. Learn what all other Indices we are Trading in our Index Trading Asset Class. Develop yourself as a professional trader capable of capturing second income in the future with us.

Please click on the Contact Us link: Goo.Gl/2SRZoG

Call us on +61 3 9015 4858
email: info@npfinancials.com.au

Future of US Stock Market: Our 6 Viewpoints. In this blog post we shall highlight our viewpoints about the future of US Stock Market.
1. Many people now believe that US Stock Market as a whole and companies of S&P 500 as individual’s valuations are at the extremes we had during the dotcom bubble. According to our view and that of https://www.multpl.com/s-p-500-pe-ratio (as below) US Stock Market (S&P’s) P/E is nowhere near to 2001 or 2009 level. Hence it is having much room to the upside. Know how to take advantage of the end of this shortest bear market.
S&P 500 Valuation
2. People also believe that on the potential that we would not have any jobs because all the machines are doing them. But according to us seeing Japan’s (considering the fact they use robots/ automation to the highest level) unemployment over years (as below), it has not gone any up due to automation according to https://tradingeconomics.com/japan/unemployment-rate:
Japan's unemplyment
3. According to them, “If they keep printing it will eventually maybe not now but eventually it will lead to inflation”. Our thought on this is: if USA’s inflation has not gone up in last 25 years (as below) as per https://tradingeconomics.com/united-states/inflation-cpi then it shall not go up in next 25 years as well. Know how to take advantage of the end of this shortest bear market.
USA Inflation
4. It is true that world GDP as per https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/BRA?year=2020 is -5.8% (as below) but according to https://au.finance.yahoo.com/news/world-economy-tipped-to-recover-to-precoronavirus-levels-mid-2021-074019490.html , “Global GDP is expected to return to pre-coronavirus pandemic levels by mid-2021” and “Deutsche Bank analysts now put global GDP to 5.6% from 5.3% in 2021. Global economic recovery from the depths of the COVID-19 plunge this past winter and spring has proceeded significantly faster than we envisioned, said Peter Hooper, Deutsche global head of economic research, in the note.

5. According to https://www.forbes.com/sites/greatspeculations/2020/10/12/how-tesla-can-get-to-a-1-trillion-valuation/?sh=3df4358f1d32 Tesla’s (the new entrant in S&P 500 US Stock Market) valuation in 2025 would be 4.3 trillion dollar as shown below:

Tesla's Valuation
6. Last but not the least, the legendary Warren Buffet himself is optimistic about the US Stock Market. As per https://money.usnews.com/investing/stock-market-news/slideshows/things-warren-buffett-is-saying-about-the-market?slide=9 he says,
  • Stocks are still the place to be.
  • The U.S. will not default on its debt.
  • America will recover.

Start trading like us and develop yourself to become an expert trader in Treasury Yield or any of the asset classes, you want to consider for buying or selling, when you are trained by us.

To know how to take advantage of our proprietary and predictive price analysis of the Index Trading, especially ASX Index (ASX200) and S&P 500, please join our Index trading desk. Know how to take advantage of the end of this shortest bear market.

Now you can learn how to trade all the Indices, especially ASX Index (ASX200) and S&P 500, with us to explore the possibility of earning passive income keeping your day job.

Our Proprietary Index Trading Strategy will guide you through every step of your trading in Index Trading, especially ASX Index (ASX200) and US Stock Market S&P 500, and explore the possibility of earning extra income. Learn what all other Indices we are Trading in our Index Trading Asset Class. Develop yourself as a professional trader capable of capturing second income in the future with us.

Please click on the Contact Us link: Goo.Gl/2SRZoG

Call us on +61 3 9015 4858
email: info@npfinancials.com.au

 

Useful Links:

Learn Share Trading with Partha Banerjee of N P Financials, the Prop Trading Firm at Melbourne

Learn how to Trade the Directional Share Market. Get mentored in the art and science of Share Trading in our proprietary 6 months developmental course. Derive benefit from our effective Share Trading Strategies.

Learn Basics of Forex Trading with Partha Banerjee of N P Financials, the Prop Trading Firm at Melbourne

On completion of the “Basics of Trading” course, You will develop an In-depth understanding of Fundamentals factors moving Markets. You will be able to clearly understand the Market Jargon e.g. Swaps, Spread, Slippage etc.

Learn how to Code in Trading with Partha Banerjee of N P Financials, the Prop Trading Firm at Melbourne

A full-time professional trader from N P Financials will be your own personal coach for 3-6 months. You will be trained on how to learn the Market Programming Language.

Develop your own Market Scanning System with Partha Banerjee of N P Financials, the Prop Trading Firm at Melbourne

A full-time professional trader from NPF will be your own personal coach for 3-6 months. You will be trained on how to Develop your Market Scanning Edge.

Develop your own Trading System e.g. Stock CFD Trading with Partha Banerjee of N P Financials, the Prop Trading Firm at Melbourne

A full-time professional trader from NPF will be your own personal coach for 3-6 months. You will be trained on how to Build your Trading Edge.

Start Share Trading with Market leaders at Melbourne, Australia.

N P Financials is a Traders Training Facility where we train newcomers as well as professionals on how to trade Forex, Shares, Commodities, Bond & Indices.Our preferred broker is GO Markets.

Spread the love

Recent Post

Have Any Question on how to Earn by Trading?

Learn how to trade in a simple yet efficient way from the professional traders