February 14, 2025
(SUMMARY OF JOHN’S FEBRUARY 12, 2025 WEBINAR)
February 14, 2025
Hello everyone
TITLE: Trade Wars
PERFORMANCE
MTD: 0.48%
Trailing One Year Return: 83.45%
Average Annualised Return: 49.92%
Since inception: 758.24%
PORTFOLIO
Risk On
(TESLA)2/$300-$310 call spread (closed)
(GS) 3/$580-$590 call spread
(NVDA)2/$90-$95 call spread
(VST)2/$100-$110 call spread
Risk Off
(TSLA) 2/$540-$550 spread
THE METHOD TO MY MADNESS
The market has stalled because of continued uncertainty about everything.
Financials are still leading on deregulation party, but M&A has yet to start.
John says all interest rate plays remain dead in the water, including gold, silver, homebuilders, bonds & REITS.
US dollar remains bid on trade war.
Big technology stalling
Energy sells off on trade wars.
John says financials are the only sure thing this year.
Keep your discipline – don’t look for trades that aren’t there.
THE GLOBAL ECONOMY – CONFUSED
Fed leaves interest rates unchanged at 4.25%, and they might remain there for the rest of 2025.
Nonfarm payroll plunges to 145,000 in January.
The headline unemployment rate came in at 4.0%.
US Job Openings hit 14-month low.
Consumer sentiment falls, according to The University of Michigan.
China counters attacks in trade war.
US Factory Orders fall.
Consumer Inflation Expectations come in soft.
STOCKS – DOWNTREND
Wall Street is souring on Magnificent 7, except for Meta.
Goldman Sachs sees a correction coming in the face of deteriorating global macro conditions, trade wars, and sky-high valuations.
Technology stocks destroyed on news of China’s Deep Seek.
Tariffs to cut US earnings by 5%.
The exemption race is on with many industries pleading for special treatment in the new trade wars.
Palantir soars 25% on the prospect of a surge in government contracts.
Chevron post first loss in four years.
U.S. business activity slowed to a nine-month low.
BONDS – RALLYING
Foreign investors continue to soak up US debt, seeking higher interest.
Americans own 55% of the outstanding $36 trillion in US debt, while foreign investors own 24%, and the federal reserve 13%.
The market is giving up on any interest rate cuts this year, as the prospect of rising inflation from trade wars weighs on the market.
All fixed-income plays have gone dead.
Higher rates for longer don’t fit in here anywhere.
Possible target for (TLT) = $82
FOREIGN CURRENCIES – TRADE WAR BOOST
Trade wars are pushing up the US dollar, making American exports more expensive.
High import duties will shrink US imports dramatically and impoverish our foreign customers, creating dollar strength.
Ten-year US Treasuries have risen from 4.40% to 4.50%.
The mere fact that rates have stalled has allowed currencies to rally.
Higher for longer interest rates mean higher for longer US dollar.
Avoid (FXA), (FXE), (FXB), (FXC), and (FXY).
ENERGY & COMMODITIES
US global economic disruption sink oil prices.
Oil & Gas dealmaking hits $105 billion in 2024.
Government to stop minting new pennies.
Nuclear plays like (VST) and (CCJ) rebound sharply.
The EIA said it expects Brent Crude oil prices to fall 8% to average $74 a barrel in 2025 and then fall further to $66 in 2026.
PRECIOUS METALS – BID AGAIN
Government may revalue gold holdings from the current 1932 price of $42 an ounce to $2936.
It is just a bookkeeping move, but it has put the yellow metal back in the spotlight.
As of January 2025, the United States government owned 133.45 tons of gold worth $39.9 billion at current market prices. This makes the US the country with the largest gold reserves in the world.
Gold has become the only way the average Chinese can save as they can no longer speculate in real estate or copper, and the population doesn’t trust the Chinese Yuan, so there is support lower down.
Central banks in emerging market countries are continuing to buy gold.
REAL ESTATE – STAY AWAY
Homebuyer Mortgage demand is collapsing, with the 30-year fixed at a buzzkill 7.0%.
Demand is 35% lower YOY, with housing demand at a 30-year low.
Homes are sitting on the market much longer. Avoid all real estate plays.
US Home Sales hit a 30-year low in 2024, the second year in a row of weak sales.
High costs related to homeownership sapped sales again.
The average rate for a 30-year fixed mortgage has hovered between 6% and 8% since late 2022.
Avoid real estate plays.
TRADE SHEET
Stocks – buy the next big dip, sell rallies.
Bonds – sell rallies
Commodities – stand aside.
Currencies – stand aside.
Precious metals – buy dips.
Energy – buy nuclear dips.
Volatility – sell over $30.
Real estate – stand aside.
NEXT STRATEGY WEBINAR
12:00 EST Wednesday, February 26, 2025, from Incline Village, NV.
Cheers
Jacquie
