January 17, 2025
(SUMMARY OF JOHN’S JANUARY 15, 2025, WEBINAR)
January 17, 2025
Hello everyone
TITLE: Welcome to Dullsville
PERFORMANCE
December MTD: +3.26%
Since inception: 751.8%
Average annualized return: +51.62%
2024 final: +75.26%
PORTFOLIO REVIEW
Risk On:
(TSLA) 1/$330-$340 call spread – 10%
(TSLA) 1/$300-$310 call spread- 10%
No risk off positions.
METHOD TO MY MADNESS
John tells us that this could be the year of the 5% correction, and you need to buy everyone.
Expect an OK first half and a weak second half.
All interest rate plays remain pariahs, including gold, silver, homebuilders, bonds, and REITS.
Deregulation and end of antitrust plays will continue to be bought, including banks, brokers, money managers, nuclear, and Tesla.
US dollar rockets at higher rates for longer.
Technology stocks fade on threats to international business and slowing growth sales.
Energy reaches top of recent trading range on a strong economy.
John says to buy financial as the only sure thing this year.
THE GLOBAL ECONOMY – STRONG U.S.
December Nonfarm Payroll comes in hot at 256,000.
Headlines unemployment rate at 4.1%
CPI comes in at six -month low at 3.2% YOY.
JOLTS soars, coming in at 8.0 million, versus an expected 7.7 million.
US Online sales rose by 3% over the holidays.
Services PMI comes in hot at 54.1
Los Angeles fires to cost $230 billion, with only $30 billion covered by insurance. Inflation will rise as the cost of construction, labour, and materials soar.
Tame PPI boosts stocks, with the Producer Price Index rising 3.3% on an annual basis in December 2024.
STOCKS – CORRECTION TIME
The Trump bump is gone – stock markets have given up all their post-election gains.
John says that bank stocks will be the leaders this year with the MAG7 catching up later.
Bonds are now the big market risk. If we break a 10-year Treasury yield of 5.0% and take a run to 5.5%, the 5% stock correction turns into an 11% stock correction.
Technology was hit very hard.
Cleveland Cliffs Ramps up its bid for US Steel, bringing in Nucor as a partner.
$4 Trillion in Asset Management disrupted by Los Angeles fires.
Elon Musk sued by SEC for insider trading. Stock is up $20.
(Financials are good stocks to buy this year – look at the banks).
John believes we will get a sideways range for around 6 months in tech and then an upside breakout. Tech boom is just getting started. John doubts whether we get more than a 10% correction. John thinks that the first half of 2025 will be strong and the second half weak.
John’s advice:
Buy 5% dips on (JPM) JPMorgan and 10%-20% dips in (TSLA)Tesla.
Buy 90-day T-bills – 4.4%
Banks/financials: buy in the money LEAPS after a down move. Buy call spreads.
(NFLX)Netflix: buy territory/call spread
(PANW)Palo Alto Networks: buy stock/option
(BLK) BlackRock: Buy or option.
(CCI) Crown Castle International: LEAPS candidate – recovery possible.
2025 will offer a limited number of stocks to trade. Think banks/financials, nuclear energy, and Tesla among a few others.
BONDS – THE BIG MARKET RISK
Bonds hit 14-month lows at a 4.80% yield, as fixed-income dumping continues across the board.
“Higher rates for longer” don’t fit in here anywhere. But there may be a BUY setting up for (TLT) at 5.0%.
Bond yields have rocketed 130 basis points since September.
National debt tops record $36 trillion and could rise another $10 trillion.
TIPS are making a comeback.
FOREIGN CURRENCIES – U.S. dollar surges
Dollar hits two-year high, on rising U.S. interest rates, and higher highs beckon.
Ten-year U.S. Treasuries have risen from 3.55% to 4.80%, a 14-month high.
Higher for longer interest rates mean higher for longer US dollar.
Don’t sell the US dollar until the next recession is on the horizon.
Avoid (FXA), (FXE), (FXB), (FXC), and (FXY).
ENERGY & COMMODITIES – A RALLY AT LAST!
Oil finally rallies, but only to the top of the recent range with the Gaza peace deal back on the table.
China ratchets up the trade war, banning the export of crucial metals essential for all tech applications.
Strategic Petroleum Reserve at multi-year lows, but Biden has stepped in as a buyer.
Blame a weak China, lost OPEC discipline, and overproduction by Iraq.
Avoid the worst-performing asset class in the market.
IEA predicts price declines this year.
Unlimited new drilling and opening of federal lands will crash oil prices.
PRECIOUS METALS – STRUGGLING TO RECOVER
Gold has recovered half of its post-election losses on the central bank and Chinese flight to safety buying.
Interest rates higher for longer is a death knell for precious metals, with gold down 8.3% after November 5.
The opportunity cost of owning gold is about to rise sharply.
Gold has become the only way the average Chinese can save as they can no longer speculate in real estate or copper and don’t trust the Chinese Yuan, so there is support lower down.
Central banks in emerging market countries are continuing to buy gold - $5.3 billion this year.
Avoid (GLD), (SLV), (AGQ), and (WPM).
REAL ESTATE – POOR OUTLOOK
High rates could leave real estate dead in the water for all of 2025.
However, a strong economy is allowing commercial real estate to recover in New York and San Francisco.
LA fires are creating a massive housing shortage there, with 12,000 homes burned. Higher housing prices and rents are a consequence.
Mortgage demand grinds to a halt on 7.17% rates for the 30-year fixed.
TRADE SHEET
STOCKS – buy the next big dip
BONDS- sell rallies
COMMODITIES- stand aside
CURRENCIES – stand aside
PRECIOUS METALS – stand aside
ENERGY – buy nuclear dips
VOLATILITY – sell over $30
REAL ESTATE – stand aside
NEXT STRATEGY WEBINAR
12:00 PM EST Wednesday, January 29, 2025, from Salt Lake City UT.
Cheers
Jacquie
