9/30/24
The Market
Technical
The S&P continued its move higher. Given its
follow through from pushing above its former all-time, my assumption is that it
will sustain its upward momentum. China’s introduction of easier monetary and
fiscal policies should help both stimulate economic activity as well as provide
additional global liquidity. That said, the US political environment remains
unstable, in my opinion; and that keeps me cautious, which for the moment that
is clearly wrong.
TLT remained unimpressed with either the Fed or the
Chinese easing of monetary policy, Friday’s positive pin action notwithstanding.
I have noted for a couple of weeks that it had been on an upward move that
would almost certainly need some time for digestion. That is probably what is
going on. Nonetheless, TLT is still in good technical shape: it remains (1)
above all three DMAs and (2) in a very short term uptrend.
GLD maintained its upward momentum likely propelled
by the easing in US and China monetary policy (TLT’s performance
notwithstanding), the continued weakness in the dollar and the international
turmoil. At the moment, I see no reason why it should stop. Clearly, I sold my
GDX too soon.
The dollar is trying to stabilize at roughly the
level of retracement to its March high. However, my guess is that it will still
ultimately decline to its December low.
Friday in the charts.
https://www.zerohedge.com/markets/gold-crypto-rip-us-stocks-shrug-shanghai-money-drop
Fundamental
Headlines
The Economy
Week
of review
The economic stats last week were positive with the
primary indicators balanced (two plus, three neutral, two minus). Overseas data
was again overwhelmingly negative. The US numbers continue to fit my ‘muddle
through’ scenario (known affectionately on the Street as ‘soft landing’). As I noted
last week, I think that the risk to this forecast comes from the very weak
international data---how can a slowing global economy not
negatively impact the US? On the other hand, the Chinese bazooka announced
last week could go a long ways to negating the concern.
All to be determined.
That said unless and until somebody in
Washington realizes the inflationary implications of the current horrendously irresponsible
fiscal policy, I believe that either the Fed will have to finance that
policy---meaning that higher inflation is an inevitability---or it
won’t---meaning the federal government will suck capital out of the private
sector, stagnating economic growth.
My forecast remains: (1) the economy ‘muddles
through’ and (2) inflation has likely seen its lows.
Inflation
has not been vanquished.
US
International
Q2 UK GDP growth was +0.5% versus projections of
+0.6%; Q2 business investment was +1.4% versus -0.1%.
August Japanese YoY housing starts fell 5.1% versus
consensus of -3.8%; August YoY construction orders were up 8.7% versus +5.3%.
September German preliminary CPI was +1.6% versus predictions
of +1.7%.
Other
Fiscal Policy
The
impact of the 2017 tax cuts.
Tax Cuts - An Examination Of The 2017 TCJA
Impact - RIA (realinvestmentadvice.com)
A partial solution to the social security funding
problem that has appeal to both sides of the aisle.
Recession
The
latest Q3 nowcasts.
https://www.calculatedriskblog.com/2024/09/q3-gdp-tracking-around-3.html
Bottom line
The latest from BofA.
It is money making time.
https://www.theirrelevantinvestor.com/p/it-s-money-making-time
News on Stocks in Our Portfolios
What I am reading today
Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment
Strategy, Prices Disciplines and Subscriber Service.
