September 13, 2024
(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
