(THE SCIENCE OF AGEING BACKWARDS MAY BE IN OUR POCKETS WITHIN THE NEXT TEN YEARS)

September 18, 2024

Hello everyone.

Today will be a refreshing change of pace and content, as I think we all have endured a lot of noise about this week’s events.

 

 

So, let’s jump right in.

Ageing.  Or should I say the study and research into ageing backwards is gaining steam?  It’s no longer the stuff of science fiction.  Affordable treatments that could slow, stop or even reverse your ageing are, thanks to new breakthroughs, less than a decade away.  Without even realizing it, you may even be taking some of these pills already.

The biology of ageing essentially causes diseases like cancer, cardiovascular disease, and dementia.  For example, while having high blood pressure roughly doubles your chance of a heart attack, being aged 80 rather than 40 multiplies that risk by 10.  That means understanding the biology behind these enormous risk increases could lead to the greatest revolution in medicine since the discovery of antibiotics.  It could transform not just the treatment but the prevention of disease in the first place. 

The pay-off, if we can identify and treat these underlying causes of ageing, is enormous.  If we could make people in middle age a bit biologically younger with drugs that address the ageing process, we could improve everything from heart health to wrinkles and delay the onset of cancer, dementia, and frailty, all at the same time.

Andrew Steele, in his text, Ageless: The New Science of Getting Older Without Getting Old, reveals how scientists have identified several so-called ‘hallmarks’ of the ageing process – underlying biological and biochemical processes…

So, what are these biological hallmarks, and what might treatments to slow or stop their currently relentless march look like?

According to Steele, the most promising treatments are:

1/ A Miracle Drug from Easter Island

Easter Island, known for its giant stone heads, is also the origin of one of our most promising drugs to improve longevity: rapamycin.

 

 

Discovered in a soil sample returned by a Canadian expedition in the 1960s, it was named after the Polynesian name for Easter Island, Rap Nui.  The molecule, produced by a species of bacterium, is a pharmaceutical Swiss army knife with applications ranging from treating cancer to suppressing transplant patients’ immune systems to help prevent organ rejection.  And we could soon add ‘slowing down the ageing process’ to that list.

It all comes down to the hallmarks of ageing: the accumulation of dysfunctional proteins as we get older.

‘Autophagy’ – which literally means ‘self-eating’ – allows our cells to recycle malformed molecules and turn them into fresh, functional proteins.  Rapamycin can increase our cells’ ability to engage in this anti-ageing spring-cleaning.

Scientists believe that we could improve everything from heart health to wrinkles and delay the onset of cancer, dementia, and frailty.

 

 

2/ Drugs in your Medicine Cabinet

Diabetes drugs known as SGLT -2 inhibitors – canagliflozin, dapagliflozin, or empagliflozin – might be giving you health and lifespan benefits beyond helping with your blood sugar.   These drugs have been shown to improve wider health in patients that take them, and canagliflozin extended lifespan by 14% in male mice.

Other drugs include Metformin and Acarbose – diabetes drugs, and bisphosphonate drugs- usually used to reduce bone loss, weight-loss treatments like semaglutide, commonly known under brand names like Wegovy or Ozempic. 

3/ Bottling Up a Baby’s Biology

An immortal jellyfish (Turritopsis dohrnii) can, in times of stress, simply revert their biology to the junior ‘polyp’ stage and then grow up all over again, seemingly as many times as they like.  In other words, ageing backward isn’t against the laws of biology.  But is it possible in humans?

 

 

Steele argues that ageing biology, as a field, needs more funding to begin human trials for the promising interventions.  If it gets it, Steele says there’s no reason why some of these real anti-ageing medicines couldn’t be approved within a decade, allowing us all to stay healthy for longer.

 

AUSTRALIAN CORNER

 

That’s Wednesday evening, September 18 (Australian time) Hope you enjoyed it.

QI CORNER

 

 

Shaded areas indicate cuts not followed by recessions.

 

 

WHAT IS…?

 

 

SOMETHING TO THINK ABOUT

 

 

 

Cheers

Jacquie

 

(SUMMARY OF JOHN’S SEPTEMBER 11, 2024, WEBINAR)

September 13, 2024

 

Hello everyone.

 

TITLE

“Wake-up Call”

 

TRADE ALERT PERFORMANCE

September: -0.16%

2024 year to date: +33.25%

Average annualized return: +51.62% for 16 years

Since inception: 709.88%

 

PORTFOLIO

GLD 10/$215/$220 call spread 10%

 

THE METHOD TO MY MADNESS

September is living up to its reputation with whiplash type movements, and a double top on the charts.

September 18 interest rate cut is an almost certainty, but how much of it is already priced into the market?

The next sell-off is the one you buy into for a post-election rally.

US dollar begins to weaken and could do so for years.

Tech stocks will rally again after a much-needed correction.

Energy is in the doldrums because of recession fears.

Buy stocks & bonds on dips in ALL sectors.

 

THE GLOBAL ECONOMY – WEAKENING

The Fed waited too long to cut interest rates as the economy is now undeniably weakening.

Nonfarm payroll report fades at 142,000

Headlines Unemployment rate stays at 4.2%

Previous two months saw substantial downward revisions.

ADP Employment Change Report hits 31/2 year low, up only 99,000 in August.

Personal Consumption Expenditures price index rises a modest 0.2% in July.

UD GDP Reaccelerates to 3.0% growth in Q2, up from the previous estimate of 2.8%

 

STOCKS – NOSEDIVE

John says if the Fed doesn’t cut by 0.50% in September the stock market will crash

Look for two bottoms on September 18 and October 20.

NVDA dives on fabulous earnings, one of the greatest “Buy the rumour, sell the news” moves of all time.

Broadcom beats and Stock tanks, driven by strong sales of its AI products and VMware software.

Biden blocks Nippon Steel takeover of US Steel, no doubt to save the jobs these deals usually destroy.

Volatility Index soars 50% in a Day, from $14 to $22.

ISM Manufacturing PMI comes in weak, with just 47.2% of purchasing managers reporting expansion in August.

Eli Lily is now a trillion-dollar stock, the first biotech to do so.

 

Suggestions -

Look to buy JPMorgan as it gets closer to the 200MA.  Netflix (NFLX) buy.

UPS- buy/ good LEAPS trade, UNP – China recovery play. Caterpillar (CAT) falling interest rate play – long term hold.

(ROM) Technology ETF – watch for good entry.

 

BONDS – NEW HIGHS

The Yield curve has de-inverted, meaning that short term interest rates have fallen below long-term ones.

Two-year interest rates at 3.72% are now 0.03% lower than ten-year ones at 3.75%.

It’s a clear signal to the Fed that rates must be cut soon.

 

Yield Chasers Post Record Demand for Junk Bonds.

That’s helped make 2024 the busiest year for issuance of new corporate high-yield bonds, with $357 billion sold so far.

Market prices in 50-point basis cut for September, holding on to massive rally.

A cut of only 25 basis points on September 18 could give us a $5 selloff.

The September 6 Nonfarm Payroll Report and Unemployment rate will be crucial.

Buy (TLT), (JNK), (NLY), (SLRN) and REITS on dips.

Also 90-day T-bills at 4.97%

 

FOREIGN CURRENCIES – DOLLAR IS TRASH

Dollar hits seven Month Low, as US interest rates loom.  John says it could be a decade long move.

The Yen Carry Trade is Back, with hedge funds piling back into positions they jumped from only two weeks ago.

It’s a matter of math, John says, now that the Bank of Japan has given up on raising interest rates anytime soon.

What this means is more leverage, risk and volatility for global financial markets.  John loves the volatility.

The prospect of falling interest rates means that the greenback is out of favour.

Buy (FXA), (FXE), (FXB), (FXC)

 

ENERGY & COMMODITIES – CRUDE AWAKENING $60 in play

Crude Oil now down on the Year, after a sharp weekend sell-off.

Blame can be spread amongst a weak China, lost OPEC discipline, and over production.

The bearish Goldman Sachs commodities report was also a factor.

US Oil Production hits all-time high.  In August 2024, U.S. oil production hit a record 13.4 million barrels per day according to the U.S. Energy Information Administration.

Big Oil has become more productive as horizontal drilling and hydraulic fracturing, which is also known as fracking, have seen technological breakthroughs.

The fossil fuel industry benefits from tax incentives, such as the intangible drilling costs tax credit, that are built into the tax code.  The intangible drilling costs tax break is expected to benefit oil and gas companies by $1.7 billion in 2025 and $9.7 billion through 2034.

PRECIOUS METALS – NEW HIGHS

Goldman goes Big on Gold

Central banks in emerging market countries are continuing to buy gold – with purchases tripling since the middle of 2022 amid fears of U.S. financial sanctions and a mountain of sovereign debt.

Goldman is taking a more selective approach to commodity investing, pushing gold but avoiding crude oil and copper prices as China continues to drag.

Silver dives on economic slowdown, enters a sideways range.

A global monetary easing is at hand.

Buy precious metals on the dips because rates are now falling decisively.

Buy (GLD), (SLV), (AGQ), and (WPM) on dips.

 

REAL ESTATE – READY FOR TAKEOFF

Pending Home Sales drop 5% and 8.5% YOY, on a signed contract basis.

Many buyers are waiting until after the presidential election to make a move

Pending home sales fell in all four regions last month.

The positive impact of job growth and higher inventory could not overcome affordability challenges and some degree of wait-and-see related to the upcoming U.S. presidential election.

Manhattan Commercial Real Estate has bottomed, and bottom fishers are swooping in.  Can San Francisco be far behind?

Mortgage Rates Hit New 2024 Low.  The average for a 30-year foxed loan was 6.23%, down from 7.5% high.

Sales of new U.S. single-family homes rocket by 10.6%.

 

TRADE SHEET

Stocks – buy the next big dip

Bonds – buy dips

Commodities – stand aside

Currencies – sell dollar rallies, buy currencies

Precious metals – buy dips

Energy – avoid

Volatility – sell over $30

Real estate - buy dips

 

NEXT STRATEGY WEBINAR

12:00 EST Wednesday, September 25

Lake Tahoe, Nevada

 

 

Cheers

Jacquie

 

(AUGUST INFLATION DATA WILL STEAL THE LIMELIGHT THIS WEEK)

September 9, 2024

 

Hello everyone.

 

WEEK AHEAD CALENDAR

Monday, Sept. 9

10:00 a.m. Wholesale Inventories final (July)

3:00 p.m. Consumer Credit (July)

11:00 p.m. China Trade Balance

Previous:  $84.7b

Forecast: $83.9b

Earnings: Oracle

Apple’s “It’s Glow Time” event

 

Tuesday, Sept 10

6:00 a.m. NFIB Small Business Index (August)

2:00 a.m. UK Unemployment Rate

Previous:  4.2%

Forecast: 4.2%

Goldman Sachs’ Communacopia and Tech Conference

U.S. presidential debate

 

Wednesday, Sept 11

8:30 a.m. Consumer Price Index (August)

8:30 a.m. Hourly Earnings final (August)

8:30 a.m. Average Workweek final (August)

 

Thursday, Sept 12

8:30 a.m. Continuing Jobless Claims (08/31)

8:30 a.m. Initial Claims (09/07)

8:30 a.m. Producer Price Index (August)

2:00 p.m. Treasury Budget (August)

8:15 a.m. Euro Area Rate Decision

Precious: 4.25%

Forecast: 4.0%

Earnings:  Adobe, Kroger

 

Friday, Sept 13

8:30 a.m. Export Price Index (August)

8:30 a.m. Import Price Index (August)

10:00 a.m. Michigan Sentiment preliminary (September)

 

Last Friday, the highly anticipated US jobs data came in slightly lower than expected, with only 142,000 jobs added in August.  The US$ shrugged its shoulders at the number but was still weaker on the week.

This week brings the euro into focus with an interest rate decision from the ECB on Thursday.  Rates are expected to be lowered by 25bps.  US CPI data arrives on Wednesday, with inflation expected to tick lower towards the Fed’s 2% target.

This week will also bring the first presidential debate between Vice President Kamala Harris and former President Donald Trump, an event traders will closely watch as the candidates outline their economic policies.

MARKET UPDATE

S&P500

Corrective sell-off in progress.  The question on everybody’s lips: Is this a new bear market or a corrective move?  At the moment I view the action in the market as a correction, and support around 5,100 should hold.  A sustained break below the aforementioned level would question my thesis and risk a move toward the mid 4,000’s.

GOLD

Gold uptrend persists.  Resistance = $2,530.  Once this level is cleared the uptrend can extend onto the late $2,500s.

As a caution, any sustained break below $2,470, risks a move to around $$2,400.

BITCOIN

Complex Correction in progress.  Resistance = $56,250/$58,500.  With downside pressure dominant at the moment, we could see the $50,000 level tested and even test the mid $44k.

WHAT IS…?

 

 

Beta is a statistical measure of a security’s risk or volatility as compared with the market as a whole.

The market has a Beta of 1.0, and individual stocks are ranked according to how much they deviate from the macro market.  If stock (XXX) has a beta of 1.5, then we would expect stock (XXX) to move 50% more than the market.  So, if the S&P500 moves up/down 1.0%, we would expect (XXX) to move up/down 1.5%.

A higher beta implies greater risk with the potential for higher returns, whereas a lower beta implies lower risk, but also the potential for lower returns.

How do we calculate Beta?

 

 

 

AUSTRALIAN CORNER

Morningstar says the following companies are stocks that investors could hold for life.

Note:  this list does not cater to those who want stocks for dividend income and doesn’t consider valuation.  In other words, investors need to look at different stocks for income and should wait for a retracement before scaling into any of the stocks listed here.

The filter that was used included:

1. Part of the ASX 300 (well established firms with some history of success, which excludes most small caps).
2. Long runway of growth opportunities (leaning toward companies that have global operations, and/or large markets to operate in).
3. Economic moats (sustainable competitive advantage: network effects, intangible assets, cost advantages, switching costs, or efficient scale).
4. Goods return on capital
5. Sound balance sheet (Not a big reliance on too much debt to generate returns).
6. Don’t rely on exceptional managers to succeed. (The business needs to stand on its merits).
7. Unlikely to be disrupted (you are betting on things that won’t change).

 

James Hardie (ASX: JHX)

Since it pioneered the development of fiber-cement technology in the 1980s, it has dominated the fiber-cement siding category for houses in the US and Australia.  It has a long runway of growth and an economic moat based on brand and scale that should keep competitors at bay, resulting in above-average returns for decades to come.

REA Group (ASX: REA)

Owns realestate.com.au – the premier online listing platform for Australian residential real estate.  Even during the downturn in listings in 2022, it was able to substantially lift pricing – which demonstrated its immense pricing power and moat. 

QI CORNER

Last week…

 

 

 

SOMETHING TO THINK ABOUT

 

 

 

Cheers

Jacquie

 

(HEDGE AGAINST MARKET RISKS WITH GOLD & SILVER)

September 4, 2024

 

Hello everyone.

 

Let’s get real.  August, September & October are usually very tricky months for the stock market.   Or to put it another way, the market is usually awful and moody during these months.  So, expect quite a bit of turbulence during this time.

The market could pull back 7-10% during this time.  The U.S. election is coming up and the Fed meets in mid-September to deliver rate cuts or not.   The environment makes people nervous.  And people become cautious at this time.

The release of the non-farm payrolls data this Friday could cause a lot of volatility.  If the August data comes in hotter than expected, September rate cut expectations might be quickly marked down. 

Still, markets are pricing in a 67% likelihood that the Federal Reserve will cut by a quarter percentage point in September, according to the CME FedWatch Tool.

Stock up on Gold as a hedge against geopolitical and financial risks.

Going into year-end and well into 2025, we should see gold rally toward $3,000, particularly with the near 100% certainty (depending on data) that the Fed will cut rates in September, and possibly again later in the year.

Investment bank analysts at Goldman Sachs point out that emerging market countries are continuing to buy gold – with purchases tripling since the middle of 2022 amid fears of U.S. financial sanctions and a mountain of sovereign debt.

China is weighing on crude oil and copper prices.  Its weak real estate sector provides only limited upside for steel, which presents challenges for iron ore prices.  But this “winter season” cannot last forever.  According to BHP’s CEO, we could start to see a turnaround in China’s real estate sector within the next 12 months. 

Analysts at Goldman expect copper to average about $10,100 per metric ton in 2025, well above this year’s average of $9,231. 

Goldman’s view long term is that metals important for the energy transition away from fossil fuels, such as copper, will ultimately reach scarcity pricing as demand grows, investment declines, and inventories fall.

Recommendation:  Scale into gold and silver stocks on down days over the next eight weeks, particularly if you have no holdings in this sector.

You should be looking at (GLD), (GDX), (WPM), (SLV), (GOLD), & (NEM).

================================================

If you have good profits from any LEAPS recommended earlier this year or last year, consider taking profits.

 

QI CORNER

 

 

 

Cheers

Jacquie

 

(SUMMARY OF JOHN’S AUGUST 28, 2024, WEBINAR)

August 30, 2024

 

Hello everyone.

 

TITLE:  Waiting for the Other Shoe to Fall

 

TRADE ALERT PERFORMANCE

August: +3.56% MTD

Average annualized return: +51.62%

Trailing one Year Return: +52.25%

Since inception:  +710.24%

 

PORTFOLIO REVIEW

Risk Off

(TSLA) 9/$250-$260 put spread 10%

 

THE METHOD TO MY MADNESS

Markets are going into the worst month of the year overbought and begging for a correction.

September 18 interest rate cut now a sure thing, says John, but how much good news is already priced in?

A lot will depend on NVDA earnings out after the close today.

The next selloff is one you buy into.

US dollar is trash and could stay weak for years.

Technology stocks will recover after a much-needed correction.

Energy gets dumped on recession fears if the Fed acts too slowly.

Buy stocks and bonds on dips, but now it’s ALL sectors.

 

THE GLOBAL ECONOMY – NEW STIMULUS

Jay Powell says the “time to adjust policy is here.

Where did the 818,000 jobs go?  Monthly job gains fell from 250,000 to 175,000.  Is the message that the Fed waited too long to cut rates?

Goldman Sachs cuts recession risk to 20%

Consumer sentiment drops, to an eight-month low.

Price Index is a snore, at 0.2% MOM and 2.9% YOY.

US Producer Price Index fades, coming in at a weak 0.1%.

China Loan demand hits 15-year low.

UK grows by 0.6% in Q2, a far cry from the US 2.8% rate.

 

STOCKS – RECORD RALLY

Stocks mount record rally, up 11%, bringing the Magnificent Seven back to the fore.

Risk is now high, and you can still get 5.01% for 90-day T-bills.

The next dip is one you buy.

However, the bull market is finally broadening out with a big focus on interest sensitives like housing, builders, emerging markets, and small caps.

$6 billion poured into US equity funds last week.

Now it’s volatility that’s crashing, down a record $49 points from $65 to $14 in 9 trading days.

Global EV sales jump 21% YOY, in July thanks to a large rise in China.

Buy on dips: Netflix (NFLX), Caterpillar (CAT), Deere (DE), VISA (V)

 

BONDS – FROM STRENGTH TO STRENGTH

Market prices in 50-point basis cut for September, holding on to massive rally.

A cut of only 25 basis points on September 18 could give us a $5 sell-off.

The September 6 Nonfarm Payroll report and Unemployment rate will be crucial.

(TLT) could make it to $110 by yearend, keep all LEAPS.

It’s not too late to buy derivative fixed-income plays.

Buy (TLT), (JNK), (NLY), (SLRN), and REITS on dips.

 

FOREIGN CURRENCIES – DOLLAR IS TRASH

Dollar hits seven-month low, as US interest rate cuts loom.  It could be a decade-long move.

The Yen carry trade is back, with hedge funds piling back into positions they baled on only two weeks ago.

It’s just a matter of math, now that the Bank of Japan has given up on raising interest rates anytime soon.

What this means is more leverage, risk, and volatility for global financial markets.   I love it!

The prospect of falling interest rates means that the greenback is toast.

Buy (FXA), (FXE), (FXB), (FXC).

 

ENERGY & COMMODITIES – RECESSION DRAG

Oil collapses to $71 a barrel, taking the rest of the commodity space down with it.

Cut off of 1 million barrels/day of Libyan production gives oil a brief respite.

This is despite the support from multiple Middle Eastern wars.

No one wants to pay for storage during a recession, especially with the current high interest rates.  The worst-performing asset class of the year just got worse.

Weak Chinese economic data was the gasoline on the fire.

Replacement by EV’s and the shift out of cars into planes are big factors.

Copper flips from shortage to surplus, as the Chinese economic recovery drags on.

 

PRECIOUS METALS – NEW HIGHS

Gold pennies new all-time highs as Chinese have no other savings alternative.

Silver takes a break from economic slowdown, and enters a sideways range.

Miners have started to outperform metals for the first time in years, indicating an increase in investor leverage.

A global monetary easing is at hand.

Buy precious metals on the dips because rates are now falling decisively.

Buy (GLD), (AGQ), and (WPM) on dips.

 

REAL ESTATE – SALES BUMP

Mortgage rates hit the new 2024 low.  The average for a 30-year, fixed loan was 6.46%, down from 6.49% last week.

Existing Homes sales jump in July for the first time in five months, up 1.3% to 3.95 million units.

Inventory is up a whopping 20% YOY.

The median home price rose to $442,000, up 4.2% YOY, with some 27% of sales all-cash buyers.

Sales of home over $1 million are up 26% YOY because the supply is up over 30%.

New-home construction dives, in July to the lowest level since the aftermath of the pandemic as builders respond to weak demand that’s keeping inventory levels high.

Total housing starts decreased by 6.8% to a 1.2 million annualized rate last month.

 

TRADE SHEET

Stocks – buy the next big dip.

Bonds – buy dips

Commodities – stand aside

Currencies – sell dollar rallies, buy currencies

Precious Metals – buy dips

Energy – avoid

Volatility – sell over $30

Real Estate – buy dips

 

NEXT STRATEGY WEBINAR

12:00 EST Wednesday, September 11 from Lake Tahoe, Nevada

 

JACQUIE’S POST HOUSEKEEPING

The August Monthly Zoom Meeting will be next Tuesday, September 3^rd.  I will be sending out the Zoom invitation today.

 

Cheers

Jacquie