November 8, 2024
(SUMMARY OF JOHN’S NOVEMBER 6, 2024, WEBINAR)
November 8, 2024
Hello everyone
TITLE
Trading One Uncertainty for Another
ELECTION OUTCOMES
John says you lose the entire interest rate-sensitive sectors of the economy
Higher inflation
Higher interest rates
Much higher national debt
Govt. shutdowns on Dem house win
Less regulation – full self-driving in US
No environmental control
Accelerated global warming
Extreme labour shortages at low-end hitting agriculture, restaurants, and construction
Democratic control of Congress in 2026
Ukraine withdrawal
Taiwan at risk
Retreat from international commitments
More concentration of wealth at the top
Earlier stock market top
Earlier recession
Earlier stock market crash
All antitrust actions cease
WINNERS AND LOSERS
Winners
Energy
Financials
Crypto
Tesla
Health Insurance
Vladimir Putin
Losers
All interest rate plays
All Bonds
Housing
Real Estate
Construction
TRADE ALERT PERFORMANCE
November +0.30%
Since inception +729.97%
Average annualised return = +51.62%
Trailing One Year Return = +65.56%
PORTFOLIO REVIEW
(JPM) 11/$195/$205 call spread 10%
(NVDA) 12 $117/$120 call spread 10%
(GLD) 12 $235/$240 call spread 10%(Trade closed/Stopped out).
THE METHOD TO MY MADNESS
On Wednesday, we flip from one type of risk to another.
All interest rate plays looking at big sell-offs as John sees it.
US dollar hits one-year high.
Technology stocks still attractive for long term.
Stand by and wait for the initial election euphoria to pass.
Energy rallies on deregulation, but not oil supply.
Wait patiently now to see where the money flows.
THE GLOBAL ECONOMY – SURE THING
Nonfarm payroll collapses at 12,000, down sharply from September and below the Dow Jones estimate for 100,000.
The headline unemployment rate held at 4.1% in line with expectations.
The BLS noted that the Boeing strike likely subtracted 44,000 jobs in the manufacturing sector, while hurricanes also likely held back the total.
It makes a 25-bps interest rate cut on Wednesday a sure thing.
Personal Consumption Expenditures Price Index Rose in September, up 0.3%, which remains above the central bank’s target.
Q3 GDP comes in weak, with real gross domestic product grew at a hardy 2.8%.
Consumer Sentiment hits 6-month high.
STOCKS – POST ELECTION MELT UP ARRIVES
Money Market Funds see massive pre-election inflows as investors seek to avoid promised post-election violence.
Nvidia tops $3.5 trillion as shares hit a new all-time high at $144.45. It looks like it’s on a run to $150, then $160.
Apple iPhone Sales are lagging, according to a leading analyst, with a drop in 10 million orders expected, down to 84 million units.
McDonald's kills two in E. Coli Outbreak, linked to quarter pounders. Avoid (MCD).
Hedge Funds ramping up risk going into the election with more equity leverage in their portfolios than they had in the beginning of the year, indicating higher risk appetite.
IMF cuts Global Growth Forecast, seeing wars and protectionism posing threats to expansion.
BONDS – ELECTION PLAY
Bonds plunge anticipating a Trump win, with the (TLT) down $10 from the recent high.
If he does win, expect another $10 decline to $82. If Harris wins, expect a $10 rally.
This is the best election trade out there.
It’s a choice between Harris, who will increase the deficit by $2.5 trillion, or Trump, who will increase it by $15 trillion.
Either way, the bond market loses.
Bond Yields soar above 4.32% yield, on fears of massive deficit spending by a future Donald Trump. Estimates of his deficits over four years go as high as $15 trillion.
Buy (TLT), (JNK), (NLY), (SLRN), and REITS on this dip.
FOREIGN CURRENCIES – US DOLLAR REBORN
Dollar hits two-month high on rising US interest rates. Ten-year Treasuries have risen from 3.55% to 4.35%.
Harris rise in the polls is killing the US dollar as the prospect of falling interest rates improves.
Lower interest rates make the US dollar much less attractive to traders and investors.
This may be the last chance to sell short the US dollar at a high price.
The long-term downtrend in the dollar is still intact.
There is no way the dollar can stand up to cuts down to 3.5% by summer.
Buy (FXA), (FXE), (FXB), (FXC), and (FXY)
ENERGY AND COMMODITIES – OIL CRASH
Oil crashes 5% as the Israeli retaliation on Iran avoided oil facilities.
Fusion is going commercial in San Francisco with a German company, Focused Energy.
US Nuclear Regulatory Commission has new nuclear move, sending all stock plays into a tailspin.
It’s a great opportunity to buy (CCJ) and (VST) on the dip.
PRECIOUS METALS – NEW HIGHS
Silver and Gold – consolidating until a post-election upside breakout to new all-time highs.
The white metal is a predictor of a healthy recovery and a solar rebound.
Newmont Mining dives 7% after missing Wall Street expectations for third-quarter profit.
Money pours into Gold ETF’s taking gold up to new highs, at $2,761 an ounce, as hedge funds pour in.
Seasonals for the barbarous relic are now the most positive of the year.
Gold holding up in the face of big interest rate rises shows it only wants to go up.
Escalation of Middle East war is very pro-gold.
Buy (GLD), (SLV), (AGQ), and (WPM) on dips.
REAL ESTATE – PRE-ELECTION FREEZE
Virtually all real estate transactions have ceased over pre-election fears.
But they will resume on any post-election fall in interest rates.
Pending Home Sales jump 7.4% on a signed contract basis, the highest since March.
New Home Sales Jump 4.1% in September at 738,000 seasonally adjusted unit on a signed contract basis
The median home price rose to $426,300.
This despite a roller coaster month on interest rates, falling to 6.0% for the 30-year, then jumping back up to 7.0%.
Existing Home Sales drop 1% in September, a 14-year low, down to 3.84 million units annualized.
TRADE SHEET
Stocks – stand aside
Bonds – stand aside
Commodities – stand aside
Currencies – stand aside
Precious Metals – stand aside
Energy – stand aside
Energy – stand aside
Volatility – sell over $30
Real estate – stand aside
NEXT STRATEGY WEBINAR
12:00 EST WEDNESDAY, NOVEMBER 20
From Lake Tahoe, Nevada
Cheers
Jacquie
