(SUMMARY OF JOHN’S JANUARY 10, 2024, WEBINAR)
January 12, 2024
Hello everyone.
Title: Exhaustion
Performance:
January 2024 - +3.43% MTD
2024 YTD - +3.43%
Since inception - +680.03%
Average annualized return - +52.08% for 15 years
Positions:
NVDA 2/$450-$460 call spread
NVDA 2/$460-$470 call spread
MSFT 2/$330 - $340 call spread
BA 2/$190 - $200 call spread
AMZN 2/$130 - $135 call spread
DAL 2/$35-$38 call spread
Each trade is 10%.
Total Net Position: 60%
The Method to My Madness
Markets need to digest the massive moves of the fall before they can move forward, which could take months.
Both stocks and bonds delivered the biggest moves in history.
All economic data is globally slowing, but modestly.
Oil prices and commodities are now trading as one, selling off on a slowing economy.
The tech bull market is back and will continue for years.
Buy stocks and bonds but only after substantial dips.
Commodities and industrials are a second-half play.
John says oil and commodities are discounting a recession, while tech stocks are discounting a boom.
The Global Economy – Slowing Down
Non-farm payroll was hot at 216,000 and better than expected.
The headline unemployment rate maintained a near 50-year low at 3.7%
JOLTS falls in December, nudging lower to 8.79 million.
Weekly jobless claims drop to 202,000, a two-month low.
US Bankruptcies rose by 18% in 2023 and are expected to rise again.
The Auto Business is booming, at 15.6 million units delivered in 2023, a four-year high.
Private Payrolls rise by 164,000, in December, far above estimates and a big jump from 101,000 in November.
Stocks – Indigestion
Was October 2023 a 2009-type Bottom?
If so, we could be looking at rising stocks for another 13 years, making my own Dow 120,000 forecast look conservative.
Certainly, the fundamentals are there, as long as we don’t get another pandemic, or 100 other things that could go wrong.
Santa delivered big time with a monster December rally.
70% of corporate profits went into stock buybacks in 2023.
Nippon Steel pays a huge premium for US Steel (X), retiring our LEAPS at maximum profit.
According to John, we could have another bottom in the S&P500 in two to three months. From there we could see a 10-15% move, at least. Additionally, John comments that individual stocks will continue to rally this year.
We could get three to six rate cuts this year.
No recession or high unemployment in election years.
Bonds – Taking a Break
Bonds could be the Big Trade of 2024.
After the sharpest 19-point two-month rise in market history, markets are taking a break.
The Federal Reserve will cut interest rates sharply in 2024.
Markets are discounting six times, but three are more likely.
Swap contracts are pricing in almost six quarter-point cuts and see a more than 70% chance of a quarter-point policy-rate decrease in March.
Junk bond ETF’s (JNK) and (HYG) are holding up extremely well with a 6.50% yield and 18-month high.
John is looking for an $18-$28 point gain in 2024 with interest.
Buy (TLT) on dips.
John believes we could see the TLT rise to between 110 – 120 by the end of the year. Look for an 18-28% return on Bonds.
Foreign Currencies
Falling interest rates guarantee a falling dollar for 2024.
Bank of Japan eases grip on bond yields, ending its unlimited buying operation to keep interest rates down.
Japan is the last country to allow rates to rise.
Expect the Japanese yen to take off like a rocket.
(FXA) will rally with the coming bull market in commodities.
Buy (FXY) on dips.
Energy and Commodities – No friends
US gasoline prices hit a three-year low on recession fears and replacement concerns by EVs.
Copper to rise 75% in 2024, according to industry analysts.
There is a BUY setting up here in energy when the global economy reaccelerates on a lower interest rates world. Watch (XOM) and (OXY).
New export terminals create a boom in natural gas (UNG) up 45% in three weeks.
Buy (FCX) on dips.
Buy (CCJ) on dips.
Precious Metals – A new 10-year bull market
Gold to hit a new high in 2024.
With fundamentals of a dovish pivot in the U.S. interest rates, continued geopolitical risk and central bank buying are expected to support the market after a volatile 2023.
Spot gold posted a 13% annual rise in 2023, its best year since 2020, trading around $2,060 per ounce.
Investors are picking up gold as a hedge for 2024 volatility.
Gold is headed for $3000 by 2025.
Silver is also a great buy and will also make new highs in 2024 and 2025.
Russia and China are also stockpiling gold to sidestep international sanctions.
Wheaton Precious Metals (WPM) Buy LEAPS and make 400%.
Most gold and silver stocks could double this year.
Real Estate – Coming Back
Pending Home Sales were unchanged in November.
Real Estate is far stronger than people realize.
Mortgage rates are now solidly in the mid-6% range, but the supply of homes for sale is still very low.
REMAX CEO Nick Baily says the market is short 4.5 to 5 million homes which will take a decade to build.
Home prices hit new all-time highs, with nine consecutive months of gains.
Refi demand rockets, as interest rates plunge to four-month lows.
Tight supply and still-strong demand have kept pressure on home prices, which continue to hit new highs.
(CCI) – Buy call spreads.
Trade Sheet
Stocks – buy any dips.
Bonds – buy dips.
Commodities – buy dips.
Currencies – sell dollar rallies, buy currencies.
Precious metal – buy dips.
Energy – buy dips.
Volatility – buy $12.
Real estate – buy dips.
Jacquie’s Post luncheon in Melbourne, Australia, January 10, 2024.
Cheers
Jacquie
