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Hot Tips

  • November 23, 2021

    1. New Home Sales Lag,

      up only 0.8% in October versus 1.4% expected. Some 6.34 million units were shifted. Only 1.25 million homes are for sale, down 12% YOY, representing only a 2.4-month supply. The median price for a home rose to $353,900, up 13.1% YOY, but local markets like Phoenix and Seattle are seeing far greater gains. Million-dollar homes are seeing the greatest gains, with institutional investors pouring into the market to lock in historic low interest rates.

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    2. US Dollar Hits a New All Time High on Powel Renewal,

      and hints that the Fed may accelerate tapering. Bonds were crushed across the board. Markets are now discounting two interest rate rises in 2022, starting in June. Sell (TLT) on rallies, as I did yesterday once again.

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    3. Tesla is Spending $1 Billion in Austin, Texas

      and expects the factory will complete by yearend. The company said it plans to complete construction of its general assembly, paint, casting, stamping, and body shop facilities by Dec. 31. Buy (TSLA) on dips.

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    4. US Consumer Credit Demand Recovers to Pre-Pandemic Levels,

      according to the New York Fed. Rising prices are no doubt a factor.

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    5. Uber Enters Cannabis Business,

      offering deliveries of your favorite weed to your home. The service is available in Canada only. If you live long enough, you see everything.

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  • November 22, 2021

    1. Biden Appoints Jay Powell for a Second Time

      in a major lurch to the middle by the president. It’s the opening shot in the 2022 mid-term elections. I’ll approve your Fed governor if you pass my social safety net. It turned out to be impossible to find anyone more dovish that Jay Powell. The stock market loves it, especially interest rate sensitive financials. The yearend rally continues.

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    2. Expect a Lot of Travel Disasters this Week,

      as a beleaguered airline industry struggles to cope with a surge of Thanksgiving travelers, especially with bad weather forecast on the east coast. The industry has no margin for error, and on my last flight, they were buying back overbooked seats at big premiums. Buy (ALK) and (LUV) on dips.

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    3. Thanksgiving Will Cost 14% More This Year,

      thanks to our runaway rampant inflation, pandemic, and supply chain disruptions. There is a national turkey shortage. It could be more, depending on where you get your turkey. It’s the biggest increase in 31 years, right when we were coming out of the S&L Crisis. The average dinner for ten now cost $53.31. Here in San Francisco, I am a large buyer at that price.

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    4. Oil Dives 3%,

      on surging pandemic fears that might bring another mini-recession. It’s hard to trade an industry that we all know is eventually going to zero. A potential US SPR release is also putting pressure on the market.

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    5. Another $1.75 Trillion Social Spending Bill Passes the House,

      but most won’t see the light of day in the Senate. At best, maybe a few hundred million in spending gets through. Expect to hear a lot about socialism and deficits. No market impact here. 

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  • November 19, 2021

    1. Weekly Jobless Claims Drop to New Post Pandemic Low,

      to 268,000, just fractionally. There are 2 million continuing claims. The great resignation continues.

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    2. Philadelphia Fed Rockets,

      jumping from an expected 24 to 39 in November, a seven-month high. More hugely positive post-pandemic economic data.

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    3. John Deere Strike Ends,

      with some of the best terms for workers in 40 years. They get an immediate 10% raise and $7,500 bonus, larger out-year raises, and big performance bonuses. There is a lot of making up for 30 years of no real wage growth going on here. It points a loaded gun at the head of the “transitory” argument for inflation. Buy (DE) on dips as an infrastructure and recovery play. Also a nice LEAPS candidate.

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    4. Apple Accelerates its Autonomous Driving Program,

      which could be worth $3 trillion just for Apple. I think I was still in high school when they first proposed this. They have some heavy lifting to do to catch up with Tesla, which has a database of $10 billion actual miles driven. Still, Apple was up $5 on the rumor. Buy (AAPL) on dips for the usual reasons.
       

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    5. Bitcoin Drops 15%,

      so it's time for newbies to start dollar-cost averaging on the long side. A fight over the debt ceiling in December could send the cryptocurrency to new all-time highs. 

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  • November 18, 2021

    1. NVIDIA Kills It,

      with revenues up 50% YOY and earnings up 60%. It’s well on the way to becoming the next trillion-dollar company. It’s another Mad Hedge 20 bagger. Buy (NVDA) on dips.

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    2. Biden May Try an SPR Release to Cap Gasoline Prices.

      There are 741 barrels in the Strategic Petroleum Reserve, enough for 21 days of US consumption. It’s sitting there costing money, essentially a government subsidiary for the energy industry. Why have it if the US is now a net energy exporter? The concern has been enough to drop oil prices by 10%.

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    3. Amazon Will Stop Accepting Visa Cards in the UK,

      in a fight over fees. You don’t want to piss off big brother. (V) tanked 5% on the news. Avoid (V) for now.

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    4. Rents for Single Family Homes Up 10.2% YOY,

      and will continue to rise. Miami has the highest rent inflation in the country, and the highest-priced homes are seeing the fastest increases.

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    5. Biden to Pick New Fed Governor Over Thanksgiving,

      with Lyle Brainerd in the front running. Markets might hiccup on a new appointment. Or do we get Powell 2.0? It’s hard to find someone more dovish than Powell, but presidents like having their own man at the Fed owing them favors.

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  • November 17, 2021

    1. Lucid Valuation Tops $89 Billion,

      greater than 100-year-old Ford Motors (F). They have a long way to prove themselves with mass production. The slick CEO talks like they are already there. It’s easy to build a few money-losing $77,400 cars. Making a million is a different story. I think I’ll stick with (TSLA) which I’m buying on dips. Avoid (LCID).

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    2. US to Hit Debt Ceiling Limit on December 15,

      and bonds are already having a heart attack. This is to pay for spending that took place during the Trump administration. This may be your next 5% correction in stocks.

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    3. Dollar Hits 16-Month High,

      on the strength of yesterday’s red hot Retail Sales. It means higher interest rates soon, which is great for the buck. Currencies with the fastest rising interest rates are always the strongest.

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    4. US Manufacturing Hits 2-1/2 Year High,

      up 1.2% in October, also thanks to soaring Retail Sales. The economic data is turning from mixed to fantastic. Stocks love it. Spending is shifting from goods trapped on west coast containers to instantly deliverable services.

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    5. Goldman Sachs Looking for 9% Gain in 2022

      for stocks, thanks to rising interest rates. I’m a little bit higher at 15% with dividends. I’m telling concierge clients that, compared to this year, they are going to have to work twice as hard to make half the profits with more volatility in 2022.

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