May 2, 2025
(SUMMARY OF JOHN’S APRIL 30, 2025 WEBINAR)
May 2, 2025
Hello everyone
TITLE – “The Special Recession Issue”
PERFORMANCE –
MTD = 12.69%
2025 YTD = 26.52%
Since Inception = +776%
Trailing one year return = 84.47%
PORTFOLIO –
Risk On
(MSTR) 5/$220-$230 call spread
(MSTR) 5/$250-$260 call spread
(NFLX) 5/$850-$860 call spread
(JPM) 5/$190-$200 call spread
Risk Off
(SPY) 5/ $570-$580 put spread
(GLD) 5/ $275- $285 call spread
(TSLA) 5/$320-$330 put spread (Profits taken)
METHOD TO MY MADNESS
Market looks through the noise to a trade war solution…
Bonds stabilize after Trump backs off Powell firing.
Markets have entered wide trading ranges with a lot of volatility.
Economic data remains consistently weak, capping any upside in stocks.
Recession call is still on, with China in no hurry to negotiate.
US Dollar hits three-year lows on “Sell America” trade
Oil bounces on Iran war risks.
Gold remains golden at new all-time highs, silver ready to play catch-up.
THE GLOBAL ECONOMY – UNIVERSALLY BAD
Negative 0.3% GDP growth, 4.3% March inflation rate point to stagflation.
Jay Powell hints at no rate cuts this year.
Consumer Confidence dives on tariff fears from 57.0 in March to 52.2 in April.
IMF cuts US GDP forecast for 2025 from 2.8% to 1.8%.
Leading Economic Indicators plunge, down 0.7% to 100.5.
Europe lowers interest rates, down 0.25% to 2.25%.
Unemployment fears hit five year- high.
US Inflation Expectations hits 44 year- high.
STOCKS – ROLLER COASTER
Stock markets suffer worst start to a year in history, but still expensive.
Morgan Stanley marks down (SPX) earnings, from $270 to $257 per share.
The Volatility Index ($VIX) spikes to $54.
All Capital gains of the last 13 months wiped out at market lows.
Chaos reigns supreme, with the (SPX) dropping 20% at the lows.
Hedge Funds are still dumping technology stocks, as they still command big premiums to the main market.
Tech leads the downturn on every selloff.
All long-term technical indicators have rolled over, meaning that the bear market could continue until summer at the earliest and next year at the latest.
2025 will be a down year for stocks.
John is looking to buy gold and banking stocks.
Vistra (VST) long term hold.
BONDS – STABILIZING
Foreign Central Banks selling US Treasury Bonds and buying Treasury bills.
Treasury discussed banning sales of bonds by foreign investors or hitting T-bills with withholding taxes.
With Bonds suffering their worst selloff in 25 years no one is rushing back in.
Continuing collapse of the US dollar is keeping away bond investors.
Bond Credit Quality is crashing, as recessions lead to more defaults.
Avoid (TLT), (JNK), (NLY), (SLRN) and REITS.
FOREIGN CURRENCIES
US dollar hits three year low, as the flight from America trade accelerates.
Rising rates didn’t provide any help, meaning the weakness is structural.
15 years of long dollar positions are unwinding.
The Trump economy is forcing investors to flee all US assets, including stocks and currency.
Massive cash flight is running away from the US and into Europe and China.
Buy (FXA), (FXE), (FXB), (FXC), and (FXY).
ENERGY & COMMODITIES – Crash!
Oil crashes down an amazing $13 or down 18% in a week, from $72 to $59.
High dividend paying (XOM) has collapsed by 18%.
It is the sharpest fall in Texas tea prices since the 1991 Gulf War.
Recession fears are running rampant, and no one wants to pay for storage until a recovery which may be years off.
Sell all energy rallies.
A global recession is looming large.
Avoid all energy plays like the plague.
PRECIOUS METALS – Taking a Break
JP Morgan targets Gold at $4000 in Q2, as the “Sell America” trade gathers steam.
Gold tops $3,424, the 1980 inflation adjusted all-time high.
Interest rates seem to be no longer a factor in the gold trading, losing the opportunity cost.
Gold sees first $100 up day in history.
Natural profit taking takes gold back 5%.
Central bank buying and Chinese savings demand continues unabated with China devaluing its currency.
Keep buying all (GLD) metal dips.
REAL ESTATE – Gone Quiet
New Home Sales Jump in March. The median price of a new home sold is down 7.5% YOY thanks to greater demand for lower priced homes. Interest rates delivered a short-term dip in March which they gave back in April.
Existing Homes Sales hit 16 year low.
Sales of previously owned U.S. homes fell 5.9% in March to an annualized rate of 4.02 million, the weakest March since 2009.
The median sales price increased 2.7% from a year ago to $403,700, a record for the month of March and extending a run of year-over-year price gains dating back to mid-2020.
Weekly mortgage demand has plunged 13%.
THE WRAP
Stocks – sell rallies
Bonds – stand aside
Commodities – stand aside
Currencies – buy dips
Precious Metals – buy dips
Energy – stand aside
Volatility – sell over $50
Real Estate – stand aside
NEXT STRATEGY WEBINAR
12:00 EST Wednesday, May 14, 2025
From Incline Village, NV.
Cheers
Jacquie
