Hot Tips

  • January 14, 2021

    1. Weekly Jobless Claims Deliver a Horrific Print,

      up 181,000 to 965,000, the worst since the spring. Covid-19 is clearly the reason. Stocks could care less and pushed on to new all-time highs, up eight days in a row. It really is a “Look Through” market.

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    2. Fed Beige Book Comes out Cautious,

      with the pandemic still a huge weight on the economy, which improved modestly. The national data are a total mish mash. There was a huge shift in online sales over Christmas. A lot holds on the Covid-19 vaccine.

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    3. No Rate Hike Until 2% Inflation for a Year

      said Fed Governor Clarida. It could be a long wait as indicated by yesterday’s 0.4% report.

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    4. The US CPI Rises,

      up 0.4% in December versus 0.2% in November, driven by jumping gasoline prices. I wouldn’t know about the gas because I drive a Tesla. That’s still a miniscule rate. Labor costs were hammered by the soaring pandemic as seen in the disastrous December Nonfarm Payroll Report. Still, inflation may be a big H2 issue.

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    5. Do You Know the Two Airlines Below?

      If so, I know a lot about you. You long for a straight razor shave, you remember telephone operators, and you probably have more hair growing in your ears than on your head. You also had a lot of money to spend in the 1980s. I frequently flew both first class on Morgan Stanley’s tab. Braniff specialized in flying to South America from New York and Florida. TWA was created by Howard Hughes and placed the biggest order in history for Lockheed Constellations, some 50 Connie’s in all. A reader sent them in and asked if I recognized them.

  • January 13, 2021

    1. A Trump Self-Pardon May be Imminent,

      as well as additional pardons for family, friends, donors, and past convicted Republicans. He better hurry, as he has to works these in between today’s impeachment and next week’s national mass insurrection. If markets go down on the news, buy the dip as they have been so few and far between. Get your cash lined up.

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    2. Bonds Rally Briefly,

      off an $8 oversold dump. Rallies in the (TLT) will be few and far between. Fixed income got a lift thanks to the best Treasury bond auction action in more than a year. Some $38 billion in ten-year bonds were placed. Finally, yield-starved bond investors are getting a modicum of income, 36 basis points higher than they were getting six weeks ago.
      Sell every rally, even the little ones.

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    3. Oil Hits One-Year High,

      a strength of economic recovery which starts six months down the road. Avoid the next buggy whip industry. We are one Saudi production increase away from a crash.

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    4. Netflix is Launching a Movie a Day, for all of 2021.

      It’s disrupting legacy Hollywood, which Covid-19 has brought to a screeching halt. The stock has seen a sideways correction since tech peaked in sideways. Buy at the bottom end of the recent range.

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    5. US Air Travel Down 61%,

      in November YOY, and that includes the big Thanksgiving bump. A trend up will start later this year, but airlines will still emerge from the pandemic with tons of debt.

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  • January 12, 2021

    1. A Second Insurrection is in Play for January 20

      according to the FBI, with armed demonstrations planned in the capitols of all 50 states. Don’t plan on traveling that day. Public access to the capitol building has ceased for the foreseeable future. Washington is now an armed camp, with 15,000 National Guard called in. The FBI is attempting to arrest the ring leaders as fast as possible. Market will keep seeing this as a buying opportunity, the fires under the market are burning so hot.

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    2. Tech is 2% of US Employment but 38% of Profits,

      says my old friend Jeffrey Gundlach of Double Line. Bitcoin is a bubble, inflation will be 3% by June, and bonds (TLT) are beyond terrible. Stocks are expensive but could run for a long time.

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    3. The V-Shaped Recovery is in Tatters,

      says my old Morgan Stanley colleague Steven Roach. The Covid-19 relapse is a killer. The December Nonfarm Payroll Report was a disaster. Traders are focusing too much on zero interest rates as the holy grail. The US dollar has another 20% of downside.

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    4. Bitcoin Drops 25% in a Day,

      on pure profit-taking. The $1 trillion market just became a $750 billion market. The feeling that this is a bubble is growing widespread, up from $5,000 since March. Yes, it may go higher, but not with my money.

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    5. Tesla’s Model Y Small SUV Taking Over the China Market.

      The small SUV built in Shanghai on the Model 3 chassis; Elon Musk is planning body designs specifically for the Chinese middle class consumer. The problem for the many Chinese EV startups currently seeing stock bubbles is that they have to compete against Tesla.

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  • January 11, 2021

    1. The US has 3 Million Fewer Jobs Than When Trump Took Office

      four years ago. It’s the worst performance since Herbert Hoover took office in 1928. That’s exactly what I predicted back in 2016. Up to March 2020, we also had a zero return in the stock market, which only started to improve when Biden took the lead in the primaries in May. In the meantime, the National Debt soared from $20 trillion to $28 trillion and it is still soaring. Over 100% of US growth during the Trump administration has been borrowed from the future on credit. It’s not a way to run a country.

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    2. 5.2% of all US Mortgages Subject to Covid-19 Bailout,

      or 2.74 million homes. That’s actually a decline from the worst levels of 2020. Mass foreclosures will ensue shortly. This time, banks will have no problem disposing properties into a red-hot “bidding wars” in real estate market.

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    3. Stock Soars 12X by Accident,

      after an Elon Musk recommendation. Elon mentioned “Signal” on Twitter, referring to the nonprofit encrypted messaging app. Day traders thought he meant Signal Advance, an OTC stock that rocketed from $0.60 to $7.19. I’ve seen this happen before and it shows how hot the market is. Shorting opportunity?

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    4. Semiconductor Shortage Slows Auto Industry,

      with Toyota, Ford, and Fiat cutting back production. It’s a global problem. Modern cars use more than 100 chips each and are becoming more apps than hardware. I’ve been predicting this for a year, and the problem will continue as it takes billions of dollars and a year to ramp up production. Buy the daylights out of (NVDA), (AMD), and (MU).

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    5. Twitter Dives 2% on Permanent Trump Suspension.

      There go 90 million followers down the drain. However, they have nowhere else to go as all social media platforms have banned the president for inciting violence and insurrection. Avoid (TWTR).

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  • January 8, 2021

    1. Nonfarm Payroll Comes in at a loss of 140,000,

      giving more credence to the Q1 double-dip scenario and far worse than expected. It’s the first loss since April. The headline Unemployment Rate came in unchanged at 6.7%, Leisure & Hospitality lost a mind-blowing 498,000 and an incredible 3.9 million since January. Private Education lost 63,000 and Government 45,000. Professional & Business Services gained 161,000. The real U-6 Unemployment Rate is a very high 11.6%.

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    2. Boeing Hit with $2.5 Billion Fine,

      for criminal conspiracy in concealing information stemming from the 737 MAX crashes, which killed 346. Unfortunately, companies don’t go to jail, only shareholders get punished. I’d be buying (BA) on the dip. China is about to come in as a major buyer of their planes to end the trade war. The old Boeing should resurrect.

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    3. The Bond Crash Has Only Just Begun,

      with the (TLT) down $8 on the week. The risk/reward is the worst of any financial asset anywhere. I am maintaining my triple short position. Massive government borrowing will be a death knell for fixed income investors.

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    4. Bitcoin Drops $2,000,

      signaling the onset of a potential few days of “RISK OFF” in all asset classes. It’s been a wild week. Buy everything on the dip. The market dropping only 400 points on the first-ever American insurrection and coup d’état is a huge “BUY” signal. Buy when there is blood in the streets, except for this time, the blood is real and flowing. I think I’m going to bed early tonight.

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    5. Elon Musk is Now the Richest Man in the World,

      with Tesla shares at $825, up 12X from the March lows. Elon will become the first trillionaire, as Tesla probably has another 12X move in it. They have another dozen disruptive technologies which you’ve probably never heard of.

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