Hot Tips

  • January 19, 2021

    1. Joe Biden Becomes the 46th US President at 12:00 Noon EST on Wednesday,

      the public is not invited, and there will be no big parade. The swearing-in will take place at the recently sacked Capitol surrounded by 25,000 National Guards. Terrorist threats are high. Many events will take place on television during the week. I can’t wait for the restoration of my SALT deductions.

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    2. Biden to Federalize Cov-19 Response,

      sending the National Guard to set up clinics nationwide. You will be visiting your local sports stadium or high school gym soon to get your vaccine shot. Los Angeles has a million cases, and one in ten Arizonans are infected. If 4,000 deaths a day won’t convince you to get inoculated, maybe 10,000 will. The sooner the pandemic ends, the sooner stocks can go up more.

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    3. Empire State Manufacturing Index Dives,

      from 6.0 to 3.5, approaching recessionary levels AGAIN. Better keep an eagle eye on coming releases. If they continue this bad, they might give us a decent buying opportunity for stocks.

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    4. Index Funds are Getting Trashed,

      substantially trailing the S&P 500, as single-story stocks dominate the market. It’s become a stock pickers market in the extreme, with no more obvious example that (TSLA), up 1,000% in 9 months. Small caps, IPOs, and cyclicals are getting all the action, leaving the (SPX) in the dust.

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    5. Biden Economic Plan Boosts Growth Forecasts,

      according to Goldman Sachs. Prospects have jumped from 6.4% to 6.6%, the highest in a half-century, on the back of a massive Covid-19 package.

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  • January 15, 2021

    1. US Budget Deficit Soars,

      to $573 billion in Q4, up 61% YOY. For the full calendar year, the deficit reached a mind-blowing $3.3 trillion, triple the previous year. Almost all the increase went to spending on pandemic-related benefits.  It’s another nail in the coffin for the bond market. Keep selling the (TLT), even on small rallies. This could be the trade of the century.

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    2. Bill Nygren’s Two Favorite Stocks,

      one of the top value investors in the country, are KKR& Co. (KKR) and (FISV) Fiserv, the Wisconsin-based financial services firm. If you believe in the Golden Age scenario, as I do, these look like great picks.

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    3. Retail Sales Fall in December,

      down an unimaginable 0.7%. To see retails sales down at Christmas is unimaginable and is no doubt due to the pandemic that closed malls. More evidence of a double dip in the economy. Will the stock market continue to look through?

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    4. There Were 3.2 Million New American Pets in 2020,

      as pandemic-locked up consumers bought new friends, so the pet service industry is booming. Many pets now eat human grade food and have full health insurance, better than many real people. That’s why Petco (WOOF) went public today. Cancer is the number one cause of death for dogs as euthanasia becomes a thing of the past. Buy Zoetis (ZTS) on dips, the top pet health care company. As for me, my pets are my kids. 

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    5. Your Next Cadillac May Fly,

      says GM CEO Mary Barra. It’s single passenger, flies 55 miles per hour, and is all-electric. Looks like one of those far, far in the future things that will never happen. GM will probably not live long enough to see it. But then I thought that about pocket super computers 50 years ago, today known as iPhones. If the Germans had One iPhone, they would have won WWII. They always give me the same response: damn!

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  • January 14, 2021

    1. Weekly Jobless Claims Deliver a Horrific Print,

      up 181,000 to 965,000, the worst since the spring. Covid-19 is clearly the reason. Stocks could care less and pushed on to new all-time highs, up eight days in a row. It really is a “Look Through” market.

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    2. Fed Beige Book Comes out Cautious,

      with the pandemic still a huge weight on the economy, which improved modestly. The national data are a total mish mash. There was a huge shift in online sales over Christmas. A lot holds on the Covid-19 vaccine.

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    3. No Rate Hike Until 2% Inflation for a Year

      said Fed Governor Clarida. It could be a long wait as indicated by yesterday’s 0.4% report.

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    4. The US CPI Rises,

      up 0.4% in December versus 0.2% in November, driven by jumping gasoline prices. I wouldn’t know about the gas because I drive a Tesla. That’s still a miniscule rate. Labor costs were hammered by the soaring pandemic as seen in the disastrous December Nonfarm Payroll Report. Still, inflation may be a big H2 issue.

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    5. Do You Know the Two Airlines Below?

      If so, I know a lot about you. You long for a straight razor shave, you remember telephone operators, and you probably have more hair growing in your ears than on your head. You also had a lot of money to spend in the 1980s. I frequently flew both first class on Morgan Stanley’s tab. Braniff specialized in flying to South America from New York and Florida. TWA was created by Howard Hughes and placed the biggest order in history for Lockheed Constellations, some 50 Connie’s in all. A reader sent them in and asked if I recognized them.

  • January 13, 2021

    1. A Trump Self-Pardon May be Imminent,

      as well as additional pardons for family, friends, donors, and past convicted Republicans. He better hurry, as he has to works these in between today’s impeachment and next week’s national mass insurrection. If markets go down on the news, buy the dip as they have been so few and far between. Get your cash lined up.

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    2. Bonds Rally Briefly,

      off an $8 oversold dump. Rallies in the (TLT) will be few and far between. Fixed income got a lift thanks to the best Treasury bond auction action in more than a year. Some $38 billion in ten-year bonds were placed. Finally, yield-starved bond investors are getting a modicum of income, 36 basis points higher than they were getting six weeks ago.
      Sell every rally, even the little ones.

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    3. Oil Hits One-Year High,

      a strength of economic recovery which starts six months down the road. Avoid the next buggy whip industry. We are one Saudi production increase away from a crash.

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    4. Netflix is Launching a Movie a Day, for all of 2021.

      It’s disrupting legacy Hollywood, which Covid-19 has brought to a screeching halt. The stock has seen a sideways correction since tech peaked in sideways. Buy at the bottom end of the recent range.

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    5. US Air Travel Down 61%,

      in November YOY, and that includes the big Thanksgiving bump. A trend up will start later this year, but airlines will still emerge from the pandemic with tons of debt.

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  • January 12, 2021

    1. A Second Insurrection is in Play for January 20

      according to the FBI, with armed demonstrations planned in the capitols of all 50 states. Don’t plan on traveling that day. Public access to the capitol building has ceased for the foreseeable future. Washington is now an armed camp, with 15,000 National Guard called in. The FBI is attempting to arrest the ring leaders as fast as possible. Market will keep seeing this as a buying opportunity, the fires under the market are burning so hot.

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    2. Tech is 2% of US Employment but 38% of Profits,

      says my old friend Jeffrey Gundlach of Double Line. Bitcoin is a bubble, inflation will be 3% by June, and bonds (TLT) are beyond terrible. Stocks are expensive but could run for a long time.

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    3. The V-Shaped Recovery is in Tatters,

      says my old Morgan Stanley colleague Steven Roach. The Covid-19 relapse is a killer. The December Nonfarm Payroll Report was a disaster. Traders are focusing too much on zero interest rates as the holy grail. The US dollar has another 20% of downside.

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    4. Bitcoin Drops 25% in a Day,

      on pure profit-taking. The $1 trillion market just became a $750 billion market. The feeling that this is a bubble is growing widespread, up from $5,000 since March. Yes, it may go higher, but not with my money.

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    5. Tesla’s Model Y Small SUV Taking Over the China Market.

      The small SUV built in Shanghai on the Model 3 chassis; Elon Musk is planning body designs specifically for the Chinese middle class consumer. The problem for the many Chinese EV startups currently seeing stock bubbles is that they have to compete against Tesla.

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