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Randy Frederick, Vice President of Trading and Derivatives

Randy Frederick

Vice President of Trading and Derivatives

Randy focuses primarily on client education and market analysis. He is a frequent guest on CNBC and Bloomberg TV.

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Stock Market Report

December 7, 2018


JEFF KLEINTOP: Some investors are asking, ‘Has a global recession already begun?’ We’ve seen a big plunge in oil prices in the last couple of months, and two major countries saw their economies shrink in the third quarter, and that may be causing the markets to price in the start of a global recession. Now, while we may be in the midst of a global economic slowdown and there’s a heightened risk of a recession in the next 6 to 18 months, we think in the near-term the global economy may actually bounce back, and that could provide some relief for the stock market. So let me talk about some of these ominous signs that I talked about there.

The plunge in oil prices, for example, well, oil was down nearly 30% from its peak earlier this year. You know, when commodity prices fall, it’s often seen as a sign of a weakness in production and a slowing economy. But what’s interesting is those declines aren’t echoed in other economically-sensitive commodities, like copper, or many others. And that may mean that the drop in oil prices may mean it’s just tied to oil, and not really a sign of a global economic slowdown.

Now, what about those other global weak spots that I mentioned? It’s true, Japan and Germany did see negative GDP growth in the third quarter, but those temporary drags on their growth—auto production in Germany and a string of natural disasters in Japan—have ended, and that’s led growth to rebound here in the fourth quarter.

So it may be that some of that recession scare may begin to fade here in the near-term as economic growth rebounds a little bit, and that may offer some relief to stocks as we close out the year.

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Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

Please note that this content was created as of the specific date indicated and reflects the author’s views as of that date. It will be kept solely for historical purposes, and the author’s opinions may change, without notice, in reaction to shifting economic, market, business, and other conditions.

Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. Supporting documentation for any claims or statistical information is available upon request. 

Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.

Investing involves risk including loss of principal. 


©2018 Charles Schwab & Co., Inc. (“Schwab”). All rights reserved. Member SIPC (1218-87WB).

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Randy Frederick
Schwab's Vice President of Trading and Derivatives
TIME IS UP
Randy Frederick
Schwab's Vice President of Trading and Derivatives
Q
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Question 2
Question 3
Question 4
Question 5

Which of the following is used in technical analysis?

Which of the following is NOT a key characteristic of options trading?

Options trading can be used for:

Writing options on stocks you already own is called a:

When a put options’ strike price is above the market price of the underlying security, it is:


Countdown clock TIME IS UP
A
Valuation
B
Trend Lines
C
Financial Strength
D
Earnings Growth
Correct!

Trend lines visually show support and resistance in a certain time frame.

A
Open Interest
B
Time Value
C
Close Interest
D
Intrinsic Value
Correct!

These other three statistics are commonly used by options traders.

A
Speculation
B
Income Generation
C
Neutral Strategies
D
All of the above
Correct!

Options can be used for speculation, income generation, neutral or directional strategies and much more.

A
Covered Call
B
Bull Spread
C
Butterfly Spread
D
Contingency Order
Correct!

Because you own the underlying asset, a covered call is a limited risk strategy.

A
A Net Credit
B
In-The-Money
C
Out-Of-The_Money
D
At-The-Money
Correct!

“In-the-money” refers to an option’s intrinsic value.

You got 2 questions right!

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