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  • February 25, 2021

    1. (TLT) Breaks $138,

      surpassing my end 2021 target of a 1.50% ten-year US Treasury yield. So, I lied. My new yearend target is now $120, which would take ten-year yields to 2.00%. With a $1.9 trillion rescue budget about to kick in after the $900 billion that passed in December, the economy, and demand for funds are about to rocket. Better hurry up and buy that house before mortgage rates rise out of reach.

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    2. Weekly Jobless Claims Sink,

      to 730,000. I can’t believe that 730,000 is now considered a good number, compared to 50,000 a year ago.

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    3. Q2 GDP Shrinks a Tad,

      on its second read, from 4.2% to 4.1%. Q1 is going to be the big worry with extreme weather and the Texas power blackout. Is there enough stimulus to keep a pandemic-ravaged economy going? Q2 is when growth goes ballistic, but we won’t see those until the end of July.

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    4. US Producer Prices Soar,

      giving a hint of company inflation, now stuck at a non-existent 1.4% annual rate. I’ll believe it when I see it. Even with all the stimulus coming, technology will still make serious price rises impossible. What if the Weekly Jobless Claims remains permanently stuck at 730,000?

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    5. Guess What the Biggest Selling Drug in the World is?

      If you guessed Covid-19 vaccine, you’d be right. Moderna (MRNA) alone, another Mad Hedge ten bagger, is budgeting $18.7 billion in sales alone for 2021. That easily bumps the last top-selling drug, The generic, off-patent blood pressure drug, ACE inhibitor Lisinopril, with 104 million prescriptions.

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  • February 24, 2021

    1. Panic Hits the Crypto Markets,

      dragging down technology equities with them. The two have been trading 1:1 for four months. Bitcoin suffered a 21% two-day plunge from $58,000 to 45,800. The tail is now wagging the dog. All risk-taking may have spiked with the Friday options expiration. Watch Bitcoin for a tech stock revival, and visa versa. Stocks have earnings multiple support. Crypto doesn’t. I’ll buy Bitcoin when they post a customer support number.

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    2. Australian Dollars Soars,

      as predicted, from $58 to $79, in 11 months. We could hit parity in 2022. The Aussie is basically a call option on a synchronized global economic recovery. End of the pandemic will also bring a resumption of massive Chinese investment in the Land Down Under. Keep buying the dips in (FXA).

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    3. Case-Shiller Explodes to the Upside,

      up 10.4% in December. It’s the hottest read in seven years for the National Home Price Index. Phoenix (14.4%), San Diego (13.0%), and Seattle (13.6%) were the strongest cities. The flight from the cities continues.

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    4. Market Leadership has Changed.

      Out with tech and in with financials and foreign stocks, especially China. Commodities and foreign currencies do well too. Anything boosted by rising rates is going to fly. So says BTIG’s Julian Emanuel. Me too.

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    5. Wells Fargo Sells Asset Management Arm

      to a private equity firm for $2.1 billion. Sounds like a bargain to me as we are just entering the Golden Age of fund management. Assets under management jumped 21% to $607 billion in 2020.

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  • February 23, 2021

    1. Will Higher Interest Rates Kill Big Tech?

      Today was certainly the proof in the pudding, with the ten-year US Treasury yield at 1.38% and NASDAQ off 2.5%. The reality is that these companies actually benefit from higher interest rates, as they are in effect big banks with massive cash deposits. Still, never argue with Mr. Market.

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    2. Q2 GDP Came in at a Horrific -31.4%,

      Higher cost, shorter range, they hope to make it up in style and luxury. Nobody will buy these cars except the original venture capital investors. I don’t see competition for Tesla with a decade technology catchup needed, but the market thinks otherwise today. Eventually, I am usually right.

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    3. Trans-Arctic Shipping Has Begun,

      as the ice cap has shrunk so much. For some of this winter, Alaska was warmer than California. Accompanied by an ice breaker, a gas tanker cut the time from European Russia to China by two thirds. It heralds the opening of more Asia-Europe trade.

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    4. Tesla Crashes,

      down $180 in two days. We have just suffered a perfect storm of bad news about Tesla. Interest rates have been soaring, bad for all tech in the mind of the market. Competitor Lucid Motors announced a SPAC valued at $11 billion. And Elon Musk said Bitcoin looked “high” after investing $1.5 billion. Get ready to buy the dip, but not yet.

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    5. Quantitative Easing to Continue,

      says Fed governor Jay Powell, even if the economy improves. The $120 billion in bond buying remains, even if the economy improves. He’s doing everything possible to create inflation.

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  • February 22, 2021

    1. US to Outperform China,

      in the coming economic recovery. The good news is that China has already enjoyed a “V” shaped recovery. It explains why the metal stocks have been absolutely on fire. Buy (XME) and (FCX) on dips. Morgan Stanley just raised its Q2 GRD forecast to a ballistic 7.5%, and Goldman Sachs is at 6.0%.

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    2. Cashing is Still Pouring off the Sidelines,

      with equity mutual funds attracting some $7.8 billion last week. As long as this is the case, which could be for years, any market corrections will be limited. Strangely, bond funds are still pulling in money too, some $5.7 billion. It’s called a liquidity-driven market, silly! Pullbacks will be limited and met with a wall of buying.

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    3.  Housing Starts Fell,

      in January, down 6.0% to 1.58 million units. A much smaller drop was expected. Rising land and lumber costs are cutting into the economics of new construction. Home prices are going to have to accelerate to suck in more supply. Housing Permits for new construction soared by 10.4% last month, so the future looks bright for builders.

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    4. Roku Beats,

      as another Mad Hedge ten bagger keeps on giving. Streaming revenues are soaring with all of us locked up with nowhere to go, up an eye-popping 55% in terms of hours viewed. The company swung from a loss a year earlier to a nice profit. Another Mad Hedge ten-bagger. We first recommended at $35, versus $467 now.  

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    5. Fed Says Business Failures Will Continue at Record Pace,

      mostly occurring among small, unlisted local businesses. Biden’s $1.9 trillion rescue budget will come too late for many. Unemployment could stay chronically high for years, as the Weekly Jobless Claims are suggesting.

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  • February 18, 2021

    1. Weekly Jobless Claims Soar,

      to 861,000, casting a dark cloud over the economic recovery. The news took a 300-point bite out of the Dow. Illinois and California saw the biggest gains. We are not out of the woods yet.

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    2. Texas Bans Natural Gas Exports,

      causing ripple shortages in surrounding states, as its energy crisis goes global. Saudi Arabia announced a production increase to help meet demand. Electricity is now trading at 1,000-times normal market prices. The Texas economy has been demolished. The crisis is so serious that it may take a bite out of Q1 GDP.

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    3. $359 Million GameStop Shares Fail to Deliver,

       as the wreckage of the short-covering spike keeps washing ashore. That means traders were selling shares they didn’t have and could borrow, or lenders failed to find shares. All a definite destabilizing no-no’s and will lead to SEC actions. RobinHood has so far reaped 90 lawsuits from the play.

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    4. Baidu Beats,

      on soaring ad revenues, cloud services, and AI. China’s version of Amazon, Google, and PayPal combined looks to double from here. Keep buying (BIDU) LEAPS on dips. It’s the perfect China domestic recovery play. Its US-listed shares are already up 4X from the March bottom.

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    5. Space X Valued at $74 Billion,

      according to an $850 billion venture capital fundraising round this week. However, Elon Musk’s rocket company won’t go public until men are landed on Mars. The company is also the launching pad for its Starlink global WIFI project, which will cost at least $10 billion to build out. Blowing up rockets is not a good backdrop for an IPO.

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