(SUMMARY OF JOHN’S AUGUST 30, 2023, WEBINAR – “HIGHER FOR LONGER.”)
September 1, 2023
Hello everyone,
Webinar Title: Higher for Longer
John believes there is an upside move coming as there is big money on the sidelines waiting to buy the next dip.
September 12-14th Summit – highly educational, prizes, please join us.
San Diego September 6 Luncheon – Join John and other concierge members at a waterfront restaurant.
Trade Alert Performance: -4.70% for August. Stopped out of long position in TLT before sell-off down to 92. Now have a cushion of cash.
92.45% trailing one-year return.
48.15% average annualized return.
No Positions – 100% cash.
Method to My Madness
John is looking for TLT to get down to around 92 where he will issue LEAPS.
He has ignored all the hype about sells on Tesla.
Funds have shown record underperformance this year.
The next big dip is the one you buy, with $5.6 trillion in cash sitting on the sidelines.
John argues that stocks could rally for 6-9 months after that. Looking for a hot economy for 2024.
Tech is completing a sideways “time” correction and will lead the next leg of the bull market, now 10 months old.
Bonds may have bottomed – buy LEAPS on the next dip.
Precious metals and commodities should be at the top of any “buy” list to cash in on an economic recovery.
Housing is starting a comeback, 20% of the U.S. economy.
Oil is getting ready for an upside breakout to $100/barrel.
Patience is a virtue – let the market come to you.
Global Economy
Powell says it’s “higher for longer.”
August Non-Farm Payroll is expected to come in at a weak 175,000.
September 10 – Inflation Read – if we get a rise in inflation, we could get a sell-off. May be a good entry point.
Industrial production rises – 1.0% in July, the second best read since January.
Chinese profits continue to slump – down 6.7% YOY in July. Youth unemployment exceeds 20%.
Strikes threatening Detroit, as the United Auto Workers call for a vote, demanding a 40% wage increase over four years.
Market Timing Index – chopping around 50. Do nothing territory.
Possibility of black swan in September/October.
Stocks
Weekly Jobless Claims down 10K - strong economy.
On John’s travels, he noted that a large proportion of London’s cabs have gone electric.
John is in cash – no trades. Waiting for the next big dip.
Waiting for the Fed to make its move. Will rates be Up, Down, or Paused?
Berkshire Hathaway (BRKB) posts record profit – with profits up 38%.
Microsoft – looks to double in the next three years.
Advised all members to take profits on U.S. Steel.
John’s BRKB LEAPS are up 50%.
S&P – looking for a lower low and then a year-end rally to take us up to 480 or 500.
A drop of 17+% down to 380 is possible if the inflation number is bad.
Time correction on Apple, Meta, and Netflix.
Nvidia (NVDA) hits an all-time high. The target is 1000.
John believes UPS could be fully automated in five years’ time making all staff redundant.
Looks like a good entry point on FCX.
Walt Disney is out of favour.
Health Care is a buy here.
Morgan Stanley – a great buy here.
Japanese stocks are making a killing off a weak yen.
Bonds - Looking for the Double Bottom
10-year Treasury yields hit a new 16-year high at 4.38%.
The U.S. Budget Deficit is climbing once again increasing Treasury Bond Sales.
The whole falling interest rate/rising bond price trade has been delayed for six months which is thanks to the Fitch downgrade and hotter-than-expected economic growth at 2.40% for Q2.
Keep buying 90-day T bills, now pushing a 5.31% risk-free yield.
Still looking like 3.50% 10-year yield by end of 2023.
Junk Bonds ETFs (JNK) and (HYG) are holding up extremely well with a 6.5% yield.
Bonds (TLT) still likely to hit $110 by year-end.
A hot inflation number will be a big negative.
Foreign Currencies
“Higher for Longer” gives an adrenaline shot for the US$ taking it to new 2023 highs.
Yen headed to new multi-year lows at $150.
Investors flee to safe-haven short-term investments.
“Higher for Longer” delays the first rate cut to March or even June.
Collapse of the dollar is now a 2024 story.
Aussie dollar collapse prompted by slowing Chinese economy not buying their energy or commodities.
Buy FXE, FXB, FXA on big dips. Avoid (FXY).
Aussie now at around 64.74 – headed for parity.
Energy and Commodities – on a roll
Natural gas is now trading in new higher range awaiting a breakout.
An Australian strike shut down on LNG export facility still looming.
Russian output down 800,000 b/d since January due to sanctions and sinking tankers.
Unilateral Saudi 1 million b/d cut in June worked.
Oil trading at new higher range at $78-$85.
China expects LNG price spike later this year due to coming supply shortages and a recovering economy.
Buy all energy on dips.
FCX – Buy
Precious Metals
“Higher for Longer” knocks the wind out of the precious metals rise.
Interest rate rises in Europe and Australia aren’t helping either.
Gold headed for $3000 by 2025 but will back off from new highs first.
The drivers for the gold rally will be falling interest rates and the demise of crypto.
Silver is the better play with a higher beta.
Russia and China are also stockpiling gold to sidestep international sanctions.
Severe short squeeze in copper is developing, leading to a massive price spike later in 2023 once the Chinese economy comes back online.
John will visit Ukraine in three weeks’ time. He will issue a report and video on Ukraine war.
GOLD stock shows great new LEAPS opportunity.
Real Estate
Existing home sales drop again demolished by record high mortgage rate.
July saw sales decline by 2.2% to a six-month low on sales of 4.15 million units.
Home resales, which account for a big chunk of U.S. housing sales fell 16.6% on year-on-year basis in July.
China’s largest real estate developer goes bankrupt, crushing Asian stock markets along with it.
July Housing starts come in steady at up to 4.0% at 1.45 million.
Building permits were unchanged. June numbers were revised down big.
Home builders’ sentiment dives on record mortgage highs, down 6 points to 50 in August.
Trade Sheet
Stocks – buy big dips at the bottom of the range.
Sell big rallies to hedge holdings.
Bonds – buy dips.
Commodities – buy dips.
Currencies – sell dollar rallies, buy currencies.
Precious metals – buy dips.
Energy – buy dips.
Volatility – sell short over $30.
Real Estate – buy dips.
Wishing you all a great weekend.
Cheers,
Jacquie
