(SUMMARY OF JOHN’S MARCH 6, 2024, WEBINAR)
March 8, 2024
Hello everyone,
Title: Who Needs the Fed
Performance
March: -0.25%
Since inception: +679.5%
Average annualized return: +51.30% for 16 years
Trades
(AMZN) 3/$155-$160 call spread 10%.
(SNOW) 4/$150-$155 call spread 10%.
(TLT) 4/$87-$90 call spread 10%.
The Method to My Madness
Overheating risk is rising.
Domestic plays have come back to life; is a sector rotation at hand?
It’s been a great week for falling interest rate plays, including bonds, precious metals, energy, and even uranium.
The economic data is showing a global slowdown, except for the U.S. which is in good shape for now.
Buy stocks and bonds but only on substantial dip.
Commodities & industrials are a second half play.
The Global Economy – Heating Up
The soft landing is in the pipeline, according to the G-20 finance ministers in Sao Paulo.
Upside risks include faster-than-expected disinflation.
Core PCE comes in cool, at 2.8%, as expected.
University of Michigan Consumer Sentiment dips, from 79.6 to 76.9 in February.
The Fed may drag out the end of quantitative tightening.
Weekly Jobless claims up 13,000 to 215,000.
Q4 GDP is revised down from 3.3% to 3.2%.
The Conference Board bails on Recession Call.
Stocks – Is the Rotation at Hand?
US stocks now account for 70% of Global Stock Market capitalization, thanks to the ballistic move in big tech.
In his annual letter to Shareholders, Warren Buffett says there is Nothing to Buy.
Analysts are raising their year-end targets. John’s target is now at (SPX) 6000.
Big tech continues to dominate, with NVDA earnings at $22 billion YOY, up 225%.
Regional Bank – New York Community Bancorp, is in trouble.
European companies are flocking to the US to List.
Bonds – A Great Week
The bottom may be in for Bonds.
90-day T-bills at 5.25% still offer an attractive alternative.
Markets are discounting three rate cuts starting around mid-year.
Junk Bond ETFs (JNK) and (HYG) are holding up extremely well with a 6.37% yield.
John is seeing an $18-$28 point gain in (TLT) during 2024.
Buy (TLT) on dips.
Foreign Currencies – On Top Again
US$ holds three-month highs.
Falling interest rates guarantee a falling dollar for 2024.
Buy currencies now to position yourself for a US$ fall.
Energy & Commodities – Range Bound
A global commodity rally has dragged oil up.
Slow Chinese growth still drags on the global oil market.
Natural gas rallies 10% on the week.
US continues to dominate markets with 13 million barrels/day production.
Electrification of the US economy will continue to be a driving theme.
There is a “BUY” setting up here in energy when the global economy reaccelerates on a lower interest rate world. Watch (XOM) and (OXY).
Precious Metals – Signs of Life
Precious metals have a great week on slightly falling rates.
Investors are picking up gold as a hedge for 2024 volatility.
Gold is headed for $3000 by 2025.
Silver is the better play with a higher beta.
Russian and China are also stockpiling gold to sidestep international sanctions.
Real Estate – Getting Ready for the Spring
Existing home sales jump 3% YOY.
Construction spending dives in January in a shocking data release, the worst since October 2022. A jump in mortgage rates from 6.40% back up to a restrictive 7.0% is probably the cause.
New Home Sales weaken.
But demand for new construction remains underpinned by a persistent shortage of previously owned homes.
Toll Brothers rocks, taking the shares up 6% with extremely strong demand for new homes on the horizon. The gale force demographic tailwind continues.
Trade Sheet
Stocks – buy any dips.
Bonds – buy dips.
Commodities – buy dips.
Currencies – sell dollar rallies, buy currencies.
Precious Metals – buy dips.
Energy – buy dips.
Volatility – buy $12.
Real Estate – buy dips.
Next Webinar
12:00 PM EST Wednesday March 20 from Silicon Valley
Cheers,
Jacquie
