July 2024 DDD

[ducati916]

So the 'Retail Sales' number was out:



Trump, definitely the front runner now:



A weak USD is good for US stocks because it is good for UST markets and US debt loads.



NVDA was (-7%+) at one point. Since I'm still short I am enjoying this.

The point however is the bifurcated market:



Confirmed




So for 1 week (Wednesday to Wednesday)



It would be good to know who exactly is driving this flippe-floppe. Hedge Funds?

The macro situation:

From the BIS Report:


The environment of higher interest rates further weakens fiscal positions that are already stretched by historically high debt levels. Indeed, the support from the negative gap between real interest rates and growth rates (that is, r–g) has shrunk in recent years, is projected to stay much smaller going forward and could even turn positive.


Curbing fiscal space further is rising public spending in the coming years, given the needs stemming from the green transition, pensions and healthcare, and defence.


Though financial market pricing points to only a small likelihood of public finance stress at present, confidence could quickly crumble if economic momentum weakens and an urgent need for public spending arises on both structural and cyclical fronts. Government bond markets would be hit first, but the strains could spread more broadly, as they have in the past.
Full: https://www.bis.org/publ/arpdf/ar2024e1.pdf

The above excerpt is the crux of the matter:



So this chart has GDP in blue, 10yr in red. GDP growth is higher.

What has been the result?



Debt/GDP has increased. That is not SUPPOSED to happen.

Which is why the Treasury and Yellen NEED rate cuts. They need INFLATION to reduce the debt/GDP burden that is growing faster and faster as high interest rates (nominal) are too high in real terms for GDP, which has (and needs) an inflationary component to grow, to actually grow enough.

We will get inflation and lots of it because we need it. Well not us, but the powers that be. We'll pay it though.

Which is why cash will again become utter trash.

The only question is: will the inflation be hedged by stocks or not?


jog on
duc

 

[ducati916]

With AXP reporting Friday,

Mastercard:



jog on
duc

 

[ducati916]

Today:



jog on
duc

 

[ducati916]

Have to be quick this morning, early start:



The sell-off is now more broad than it has been. The weakness in the mega-caps spreading to the rest of the market?




I tend to compare time frames:



I tend to trade off the shorter term chart.

The longer term chart (has suggested for a while) that the market was stretched. Of course that has primarily been the mega-caps.



This is SPY v RSP (equal weight SPY). The 'rotation' was completed yesterday (parity). The sell-off will be across the market?

Mr FFF



jog on
duc

 

[ducati916]

Oil News:

Friday, July 19th, 2024

The consistent stream of positive news for oil from the United States, crowned by a largely unexpected 5-million-barrel drop in US crude stocks, has been offset by disappointment in China’s future outlook. The Third Plenum of China’s Central Committee barely saw any tangible pledges, with the lack of constructive takeaways reverberating across commodities. With Friday trading disrupted by the global IT outage, ICE Brent is set to close the week around $85 per barrel.

Tight Cushing Stocks Widen WTI Backwardation. The premium of front-month US crude futures over the M2 contract widened to its highest since October 2023 this week, as high as $1.60 per barrel, as shrinking stocks in the delivery point of WTI in Cushing fell to their lowest reading in three months.

Freeport LNG Cancels Cargoes as Restart Lags. The Freeport LNG export terminal has canceled planned loadings across the third quarter of July as damage from Hurricane Beryl seems to be more impactful than initially thought, with incoming feedgas flows still a fifth of their usual level of 2 BCf per day.

Exxon-Chevron Arbitration Hinges on Interpretation of Control. ExxonMobil’s (NYSE:XOM) legal bid to stop its US peer Chevron (NYSE:CVX) from taking over 30% of the Stabroek block under the $53 billion acquisition of Hess Energy rests on whether the transaction would involve a ‘change of control’ in the Guyanese subsidiary.

Two Tankers Ablaze Off Singapore Coast. Singapore’s maritime authorities are carrying out a search and rescue operation after reports of two vessels catching fire Friday, possibly indicating that the naphtha-carrying Hafnia Mile and the Iranian oil-carrying Ceres I VLCC tanker have collided in the night.

Australia’s Largest Oil Project Delayed Again. Australia’s leading upstream firm Santos (ASX:STO) has delayed the Dorado oil project again with an FID now expected for 2025, with the delay potentially linked to a revised project scope which would see peak production lower from the original 100,000 b/d plan.

US SAF Capacity Sees Rocket Growth This Year. The EIA predicts that production of sustainable aviation fuel in the United States could rise by a whopping 1400% this year if all announced capacity additions start up on time, increasing from 2,000 b/d last year to 30,000 b/d in 2024.

Suez Canal Revenue Plunges as Houthis Attack. The annual revenue of the Suez Canal Authority dropped by almost a quarter in its latest financial year to $7.2 billion as Houthi missile strikes in the Red Sea have prompted most Western shippers to avoid the world’s largest manmade canal.

Kinder Morgan Bets on Southeast US Gas Demand. US midstream major Kinder Morgan (NYSE:KMI) announced a large-scale expansion of its 6,900-mile Southern Natural Gas pipeline, adding 1.2 Bcf/day of capacity to the existing 4.4 Bcf/day, saying rising power demand and LNG exports provide ‘jaw-dropping’ opportunities.

UAE Mulls Construction of Second Nuclear Plant. The United Arab Emirates is considering building a second nuclear plant to meet soaring electricity demand in the country, with rumors suggesting a tender for a four-reactor plant could be announced as soon as this year.

Germanium Prices Soar to Records Amidst China Buying. Prices of germanium, a rare metal required for chipmaking, have hit record highs of ¥13,250 per kg ($1,830/kg) this week amidst market speculation that Beijing is boosting its strategic stockpiles by buying around 100 metric tonnes.

Turbine Collapse Sparks US Wind Debate. The Vineyard Wind offshore wind project developed by Denmark’s CIP and Avangrid was shut down until further notice after a turbine blade failure caused debris to wash up across the beaches of Nantucket, sending shares of GE Vernova (NYSE:GEV) down almost 10% on Wednesday.

Nigeria’s Onshore Exodus Turns Nasty. French oil major TotalEnergies (NYSE:TTE) sold its minority share in onshore SPDC joint venture project to a largely unknown Maurities-based investor Chappal Energies for $860 million, only months after Shell sold its 30% stake to a Nigerian consortium for $2.4 billion.

Lack of Chinese Stimulus Depresses Copper. Three-month copper prices on the London Metal Exchange dropped to their lowest in three months this week, at $9,329 per metric tonne, after China’s Central Committee meeting this week failed to provide any tangible details on economic stimulus measures.



So the Japanese selling of UST, under normal circumstances, would have crashed the UST market. However, Yellen and the Fed extended a Yen/Dollar Swap line (detailed earlier in the week) which kept UST market functioning.

Mr FFF





Of course high commodity prices drive high PPI prices drives high CPI prices. Answer, sell a ton of paper contracts to push marginal prices lower. This is of course assuming that the analysts that follow their own markets actually know whereof they speak.

Today:



Market and average stocks having a bad day to end the week.

More in the weekly roundup.

jog on
duc

 

[ducati916]

Summary of the Week

Last week's guesses.




Tech sector semi's coming into a BTD range. NVDA still has a way to fall (hopefully) but being the poster child it may hold up slightly better.

I'll have next week's guesses up later, probably tomorrow.

jog on
duc

 

[ducati916]

For next week:



So my 'boss' thinks that last week was profit taking. Hold that thought.



So 'stuff' will be getting more expensive (again) as you add in additional shipping costs (even though it was added in last time).



Which is why we have the VIX where it is.



A couple of airlines in there. Only if jet fuel costs go down. Sure you have lots of travellers and a strong USD relative to Euro's etc, but what about jet fuel?



A few airlines in there to gauge how they look.

Big earnings to watch: Coke for the consumer, UPS, TSLA, Visa, Bristol Myers are probably the only potential market movers, unless they all suck balls, in which case the market will be lower at week end.

So I'll be back with my guesses for next week later.

jog on
duc

 

[divs4ever]

For next week:

View attachment 181174View attachment 181173View attachment 181172

So my 'boss' thinks that last week was profit taking. Hold that thought.

View attachment 181171View attachment 181170View attachment 181169View attachment 181168

So 'stuff' will be getting more expensive (again) as you add in additional shipping costs (even though it was added in last time).

View attachment 181167

Which is why we have the VIX where it is.

View attachment 181166

A couple of airlines in there. Only if jet fuel costs go down. Sure you have lots of travellers and a strong USD relative to Euro's etc, but what about jet fuel?

View attachment 181165View attachment 181164

A few airlines in there to gauge how they look.

Big earnings to watch: Coke for the consumer, UPS, TSLA, Visa, Bristol Myers are probably the only potential market movers, unless they all suck balls, in which case the market will be lower at week end.

So I'll be back with my guesses for next week later.

jog on
duc

interesting to see the analysts are so pessimistic of Tesla and Texas Instruments , Telsa has a habit of wrong-footing analysts while Texas Instruments ( if i invested in US companies ) would appeal to me 'on the selling shovels to miners ' concept

 

[ducati916]

Odds & Sods:



SBUX becomes interesting with an activist investor onboard.





Obviously coffee prices must have an impact. I remember reading somewhere that coffee production is in crisis currently.

jog on
duc

 

[ducati916]

This chart shows the relationship between the Shanghai Containerized Freight Index (SCFI), China Producer Price Index (PPI) and the US CPI.

In the top pane, we see how changes in Shanghai’s shipping rates precede China’s PPI by about six months. Since the global financial crisis (GFC), the correlation between the two indexes is 0.78, indicating a strong positive relationship.

In the bottom pane, we then see how changes in China’s PPI could be a leading indicator of the US CPI by about seven months. The post-GFC correlation here is 0.58, indicating a moderate positive relationship, plausibly via global supply chain and global trade.

All this suggests that changes in shipping rates in Shanghai can predict future inflation trends in China and the US.

This is 'Fiscal Dominance'. FD is driven by very high debt and high interest rates that compound that debt faster than GDP growth. GDP growth is driven by (i) actual productivity growth and (ii) inflation.

Inflation needs to be higher to lower the debt/GDP ratio.

Answer: lower interest rates to drive higher inflation.



Problem:

Anyone that could refinanced at the ZIRP and NIRP levels (mortgage borrowers) or termed out their debt (big corporations BUT NOT the US government LOL) so that rising nominal rates by Powell and the Fed did not really hurt them badly, if at all.

The only major player who did not term out (take new debt at 10yrs+ duration) was the US Treasury. Yellen loaded up on short term debt, which is why the high interest rates are compounding the debt so fast...all new issuance is at the short end.

So although the stock market is seemingly cheering lower rates...is it really?

Lower rates will make zero difference to the major players who termed out their debt. In fact, it may even be detrimental as any cash held will receive LOWER returns and in fact even losses as inflation takes hold and no more Fed Reverse Repo.

Mortgages are unlikely to refinance:



It is highly unlikely (at this point) that rates will return to NIRP. They may do eventually, but for the moment, mortgage refinancing is not going to stimulate the economy.

Big problem. Huge problem.

What will do well? Gold and if it's not a con, BTC.

Meanwhile positive start to the week:



Mr FFF:









MSFT software is absolute shite:

Global computer collapse is a chilling look at what’s to come

When CrowdStrike CEO (soon to be ex-CEO) George Kurtz said Friday morning that “this is not a security incident or cyber attack,” you should not have been reassured.

nypost.com

Luckily switched to AAPL years ago. Not that it is really about retail, more the huge systems.

MOVE looks to have bottomed out:



Which suggests UST market volatility on the way.

Watch USD



Short covering driving the bounce or a big player in need of USD? If we get back to 105 the market will already be selling off or about to.

Is the market simply bouncing due to short covering?

It is a very choppy market with significant political uncertainty causing flippe-floppes on an almost daily basis. Eventually a 'trend' will re-emerge.

If however you are of the mind that 'rate cuts' will re-establish the higher trend, I'm not so sure. For S&P500 companies, it is likely a headwind, nothing to be gained.

Trump could well lower corporate taxes. That would be bullish for stocks, except for the fact tax recovery would fall, driving deficits higher. The issue is sovereign debt.

jog on
duc

 

[divs4ever]

Trump could well lower corporate taxes. That would be bullish for stocks, except for the fact tax recovery would fall, driving deficits higher. The issue is sovereign debt.

lower corporate taxes but cause costs to rise via tariff consequences , seems to be the plan

will that shift cause the US to be more self-reliant ( from raw material to finished product )

i guess time will tell

i understand the strategy .. but will it work ( will industry follow the dangled carrot ? )

sovereign debt , i am guessing they will just try to inflate it down to a trivial amount in vaporous book-keeping

( nobody seems interested in cutting government expenditure/borrowing )

 

[ducati916]

Oil News:

The Asian oil market witnessed a much-needed recovery in trading after the region’s main benchmark grade Dubai weakened so much against Brent and WTI that arbitrage flows from other continents became hardly workable.

- Following an extremely disappointing June performance, China’s state-owned oil companies Unipec and PetroChina have boosted spot purchases of Middle Eastern oil that are set to arrive in September-October.

- Heading into July, Chinese buyers nominated the lowest Saudi Arabian volumes since March 2020 at 36 million barrels, however resurgent nominations for August (44 million barrels) and high spot trading activity indicate things are set to improve.

- According to market sources, Chinese buyers might also ratchet up crude imports to satisfy Beijing’s mandate to add 8 million metric tonnes (60 million barrels) of oil to newly built SPR storage sites across the country.

Market Movers

- Global oil majors Shell (LON:SHEL) and ExxonMobil (NYSE:XOM) sold their NAM Offshore joint venture in the Dutch North Sea to Canada’s independent upstream firm Tenaz Energy for a mere $180 million.

- Colombia’s state oil firm Ecopetrol (NYSE:EC) is reportedly in talks with Occidental Petroleum (NYSE:OXY) to potentially buy a 30% stake in shale producer CrownRock in a deal worth $3.6 billion.
- Argentina’s state oil firm YPF is in negotiations with US midstream major Energy Transfer (NYSE:ET) regarding potential financing for a cross-country oil pipeline that would connect the Vaca Muerta shale play to the coast.

Tuesday, July 23, 2024

The withdrawal of US President Joe Biden from the re-election campaign has left the oil market confused, with oil prices weakening to their lowest in a month as ICE Brent dropped below 82 per barrel. It is not for lack of potentially bullish signals that prices have been lower. Normally, Israel’s attack on Yemen and promises of retaliation as well as China cutting its short-term interest rates would trigger some sort of response, but not now.

Dark Tanker Flees After Singapore Collision. The Ceres I VLCC tanker that collided with product tanker Hafnia Nile last Friday fled the collision scene and was found in the South China Sea and detained by Malaysian authorities, along with two tugboats towing the vessel northwards.

China Buys Even More Russian Crude. China’s imports of Russian oil have risen by 5% year-on-year to 2.23 million b/d despite lower imports in June, consolidating Russia’s position as the number one crude supplier as demand for Saudi Arabian oil dropped by 13% year-over-year to 1.62 million b/d.

ExxonMobil Fully Quits Malaysia’s Upstream. Once a leading producer in Malaysia that has been present for more than 130 years, US oil major ExxonMobil (NYSE:XOM) has agreed to sell its oil and gas assets in the Asian country to state oil firm Petronas, equivalent to 15% of national output.

FTC Extends OPEC Probe to Occidental. Extending its initial investigation into Pioneer CEO Scott Sheffield, the US Federal Trade Commission is probing executives from Occidental, Hess, and Diamondback over their communications with OPEC officials, citing potential collusion between the sides.

Woodside Risks It All With Tellurian Deal. Australia’s largest oil producer Woodside Energy (ASX:WDS) agreed to buy US LNG developer Tellurian (NYSEAMERICAN:TELL) for $1.2 billion including debt, at a more than 75% premium to its last closing price, taking over the embattled Driftwood LNG project.

Turkey Explores for Oil in Somalia. Turkey will send its navy to support its exploration effort in Somalia’s offshore sector, deploying the Oruc Reis surveying vessel at the end of September to carry out seismic appraisal after the two countries signed a military pact and Turkey got three exploration blocks.

Europe Slaps Duties on Chinese Biofuels. The European Commission is set to introduce anti-dumping duties on biodiesel and hydrotreated vegetable oil (HVO) from China, with the levies set either at 23.7% or 36.4% depending on the companies’ level of cooperation, although Brussels didn’t include SAF.

White House Renews Iraq’s Sanction Waiver. The Biden administration has renewed a waiver from US sanctions on Iran to allow Iraq to import natural gas and electricity from its eastern neighbor, the 22nd renewal of the authorization that will be valid until mid-November 2024.

Chevron Farms Out Suriname Stake to Qatar. Qatar’s national energy company QatarEnergy signed a deal with US oil major Chevron (NYSE:CVX) to purchase a 20% stake from the latter’s Block 5 production sharing contract in offshore Suriname, the fourth license that Qatar enters in the country.

Hedge Funds Turn Turbo Bullish on Gold. Hedge funds’ bullish wagers on gold soared to the highest in more than four years by mid-July, with net long positions surpassing the 220,000-contract mark just as the bullion posted an all-time high of $2,483 per ounce last week.

Nigeria’s Government Turns on Its Only Refinery. Nigeria’s Parliament has set up a committee to investigate allegations of dirty fuels after the country’s midstream regulator accused the Dangote refinery, the only functional plant in the country now, of not meeting diesel sulfur restrictions.

Earthquake Disrupts Chile’s Mining Operations. A 7.4-magnitude earthquake rocked northern Chile last week, triggering power outages across the region where most of the Latin American nation’s lithium and copper production takes place, although the pricing impact remained muted.

TMX Mulls Taking on Debt Before Sale. Canadian oil pipeline operator Trans Mountain is considering borrowing in the bond market to refinance some of its $18.4 billion outstanding debt before the Canadian government finds a buyer to sell it to, despite the recent launch of TMX.


Full: https://magazinebailliegifford.com/lessons-from-bessembinder/lesson-one/




Hanging onto a losing position: good or bad idea?

Owning a stock when disaster strikes

Why I decided not to sell CrowdStrike

www.downtownjoshbrown.com

But financial conditions are not getting looser everywhere. Bankruptcy filings by larger corporations reached the highest level in 13 years. There is some trouble at the low end of the junk-bond market and the leveraged-loan market. And Commercial Real Estate is stewing in an epic mess, entailing countless defaults and massive losses for equity and debt investors and for banks, with the result that credit has tightened around its neck, so much that refinancing maturing loans got very difficult or impossible, leading to numerous repayment defaults, and many multifamily construction projects are now on hold because they cannot get financing.

But the higher end of junk bonds is in la-la-land. Spreads of BB-rated junk bonds have narrowed to just 1.75 percentage points as of Friday’s close, according to the ICE BofA BB US High Yield Index released today, the narrowest since 2007! BB-rated bonds are at the top end of the junk-bond spectrum (here’s our corporate bond ratings cheat sheet). In other words, BB-rated debt has moved even deeper into la-la-land, under massive demand from investors.


Mr FFF



jog on
duc

 

[ducati916]

So yesterday was a bit of a blood bath. Yesterday I was also covering for a colleague at work which meant another (very) early start. So by the time I had managed all of my positions...time to head out.

This is what yesterday looked like.



Today, a bit calmer.

Is there any particular reason for this volatility?



The curve is starting towards un-inverting. With the looming rate cuts it may well un-invert. Historically when this happens, bad stuff follows.

Second:



Bankruptcies are accelerating. Banks are not lending. They are buying UST paper. The Fed will always bail them out if it goes t1ts up and meanwhile they earn 4%+.

Also just a few days ago:



UST market vol. was moving higher. Quick, get the banks to provide some additional liquidity.



Systems trading: https://www.priceactionlab.com/Blog/2024/07/go-systematic/




Full: https://www.theblock.co/post/307063...over-1-billion-in-trading-volume-on-first-day

and

https://www.theblock.co/post/306703/heres-everything-you-need-to-know-about-spot-ethereum-etfs

https://www.theblock.co/post/306970/ethereum-etfs-hit-300-million-in-trading-volume-in-first-hour-of-being-live-on-the-market

jog on
duc

 

[divs4ever]

caution , the US is going back lower

Dow	39,935.07	81.20	0.20%
	S&P 500	5,399.22	-27.91	-0.51%
	Nasdaq	17,181.72	-160.69	-0.93%

 

[ducati916]

CEO of NVDA signing titties. LOL. Thinks he's rock star.

jog on
duc

 

[Garpal Gumnut]

Thanks @ducati916

I’m not all that impressed with Mr.Fly’s trading atm. I believe he still expects to catch a big move.

That would have worked 12 months ago but that bus has moved on. If he continues in to a consolidating market even with reasonably large swings he may get some unwelcome surprises.

If there is a crash and he happens to be on the correct side of the trade well and good.

Sometimes it’s better to have a break and go fishing (for fish).

gg

 

[ducati916]

Oil News:

Friday, July 26th, 2024

A rollercoaster of the week has left most market watchers guessing as to what might be coming up next for oil. Canada’s wildfires, continuously decreasing US oil stocks, and GDP figures in the States coming in well above expectations should have lifted sentiment, but the signals went mostly unnoticed amidst a widespread tech stock selloff and a commodity-wide disappointment in China. ICE Brent is set to finish the week below $82 per barrel, marking the third straight weekly decline.

Democrats Seek to Ban US Talking To OPEC. US Democratic lawmakers introduced a bill to hold energy companies accountable if they are found by federal regulators to have colluded with OPEC, suggesting such firms should be no longer eligible for new oil and gas leases on federal lands and waters.

Europe in Deadlock Amidst Ukraine Transit Row. Hungary and Slovakia have asked the European Commission to launch a consultation procedure with Ukraine after the latter sanctioned the two countries’ main Russian pipeline oil supplier Lukoil, raising the risk of potential refinery halts in Central Europe.

Shell Loses Interest in Scottish Wind. UK-based energy major Shell (LON:SHEL) is planning to sell development leases it won to build up to 5 GW of floating wind farms off the Scottish coast, potentially liquidating its participation in a joint venture with Iberdrola’s subsidiary Scottish Power.

Brazil Prepares to Buy Back Its Own Refinery. Brazil’s state oil firm Petrobras (NYSEBR) is finishing up due diligence for a bid on the 300,000 b/d Mataripe refinery that it sold only three years ago to the Abu Dhabi sovereign fund Mubadala for $1.65 billion, seeking to unwind the Bolsonaro-era divestments.

OPEC+ Overproducers Present Their Compensation Plans. Just in time before the August meeting of the JMMC, Iraq, Kazakhstan and Russia, the largest overproducers of OPEC+, presented their compensation plans to reduce production by a collective 2.284 million b/d between now and September 2025.

India’s Refining Giant Gets Exempted from Venezuela Sanctions. According to Bloomberg, India’s largest private refiner Reliance Industries has received approval from the Biden administration to resume importing crude oil from Venezuela despite the reinstatement of sanctions in April 2024.

Chinese Investors Cut Stakes in Indonesian Smelters. Chinese mining companies are seeking to reduce their stakes in Indonesian nickel smelters to make their products eligible for EV tax credits in the US as the IRA restricts tax cuts to those with not more than 25% ownership by a foreign entity of concern, which applies to China.

Equinor Wants Less UK Exposure. Norway’s national oil firm Equinor (NYSE:EQNR) is considering cutting its 80% stake in the UK’s largest untapped oil field Rosebank, saying it would prefer to bring the share in line with that of other assets as Britain’s new Labour government is set to hike windfall taxes.

India Eyes Riches of the Indian Ocean. The UN-backed International Seabed Authority has issued two deep-sea exploration licenses for India (out of a total of 31), with New Delhi planning to start mining by the end of the decade despite having no previous seabed mining expertise.

White House Eyes 2035 Ban on Single-Use Plastics. The White House announced a new goal to phase out federal procurement of single-use plastics in food service operations, packaging, and events by 2027 and to eliminate the material from federal operations by 2035, triggering the ire of the US polymer industry.

Russia Wants to Build a Refinery in Cuba. Revisiting long-lost ties from the Soviet era, Russian authorities have suggested that the country’s state-owned enterprises could build a refinery in Cuba, a country that mostly burns its 50,000 b/d of heavy crude oil production for power generation.

Italian Oil Major Expands in East Africa. Italy’s national oil company ENI (BIT:ENI) was awarded the Angoche A6-C offshore block in the country’s northeast, with the African country’s state oil firm ENH taking 40% in the project, seeking to replicate the success of the $7 billion Coral South LNG project.

Iron Ore Plunges on China Weakness. The disappointment from China’s Third Plenary continues to weigh on industrial metals with iron ore dipping below the psychological level of $100 per metric tonne on the Singapore Exchange, worsened by negative steel margins and Beijing mandating new quality standards.



Mr FFF



Weekly



So a few takeaways:

The US is re-shoring their manufacturing base.

(a) this is good for the US long term;
(b) short term will be inflationary;
(c) will require significant amounts of energy and raw materials (commodities);
(d) infra-structure and energy stocks should do well, ETF (PAVE), Energy stocks ETF XLE

Add into that mix another 4yrs of Trump, which will likely engender a weakening of the USD (necessary), tax cuts (higher deficit spending) both of which are highly inflationary. The resumption of tariffs across all manner of industries (inflationary).

Rate cuts from the Fed and/or YCC which is inflationary.

Essentially a secular and high inflation.

Stocks will act as an inflation hedge to a point.

The difficulty will be: https://smeadcap.com/missives/the-d...516&utm_content=316798246&utm_source=hs_email

Probably a more active hands on approach might be called for.

jog on
duc

 

[divs4ever]

The difficulty will be: https://smeadcap.com/missives/the-d...516&utm_content=316798246&utm_source=hs_email

LOL they( the big funds ) have been trying to convince us of that for years

basically so they can loot the market and claim victory laps on the rises caused by real inflation , M&A activity and company buy-backs

take the performance of VAS in the last 13 years ( just the standard unit price and divide the difference by 13 ) ( i suspect other ASX focused index funds will be very close to the same ) THEN adjust for ( the dodgy official ) inflation

sure active managers have been mostly unspectacular in the same time but 'a rising tide floats all boats '

and the silver living is active managers ( funds ) normally sell at a nice discount ( to NTA )

 

[ducati916]

Pretty much the month is in the bag



For the month






jog on
duc

 

[ducati916]

Spoke too soon, next week, last few days of July, is shaping up to be huge.



Earnings are all market moving events.



Then we have unemployment data all week and the Fed on Wednesday.



Healthcare and Tech are loaded with earnings this week, should have additional volatility. Also in there is Energy with 2 big earnings. Will good/great earnings out of MSFT et al halt the tech slide? A tradable bottom? Bad earnings...collapse?

Rate cuts are at 5% this meeting, 88% for the September meeting. If they are early?

I think the consensus are rate cuts = higher market.

The yield curve could un-invert and that has (historically) been a bad thing for the market. It could get funky if the Fed cuts early as a surprise.

On early rate cuts, pegged at 5% currently:



5%...done deal?

jog on
duc