Investing for Survival: executive orders

Are expectations for 2025 too high? I don’t often disagree with Lance Roberts. Even in this case, it is only a partial disagreement. The thesis in this article is that valuations are too high; and in the case of the Magnificent Seven, I couldn’t agree more. The problem is (as has been pointed out countless times by countless Market observers) those seven stocks are what have caused Market valuations to be so high. How many articles have there been in the last year pointing out that the Magnificent Seven have accounted for the lion’s share of the Market’s advance and that the other 493 (in the S&P) have been laggards?

I think that is about to change. It is time for those 493 to play catch up. I believe that there is a decent chance that 2025 could see the Magnificent Seven doing nothing or even decline where areas of the Market that have dramatically lagged improve. Of course, there is the possibility that the Mag 7 could sell off, perhaps significantly and the rest of the Market remain unchanged or decline modestly. As you can tell by my recent actions, I am ready to accept that risk. To be clear, all my recent purchases have been companies/stocks that were punished in 2024; so selection is critical.

Are Return Expectations For 2025 Too High? - RIA

The latest from John Mauldin.

https://www.advisorperspectives.com/commentaries/2025/01/21/storm-possible

Trump’s effect on crypto.

https://www.reuters.com/technology/trump-effect-crypto-undeniable-will-lure-investment-coinbase-ceo-says-davos-2025-01-21/

News on Stocks in Our Portfolios

What I am reading today

2025 winners of World Sports Photography.

https://www.worldsportsphotographyawards.com/winners-and-shortlists-per-year/winners

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

Tuesday, January 21, 2025

Tuesday Morning Chartology

The Morning Call

1/21/25

The Market

Technical

The mini correction stopped dead in its tracks last week, (1) bouncing off the lower boundary of its very short term uptrend and its 100 DMA, (2) resetting that 100 DMA from resistance to support and (3) pushing through its 50 DMA [if it remains there through the close today, it will rest to support] and the downtrend from its December all-time high. Still, it needs to make a higher high before I feel confident that the worst is over near term.

The significance of a big one day rally (but we have had three in a row).

https://www.marketwatch.com/story/that-big-one-day-stock-market-surge-we-just-had-dont-make-too-much-of-it-83b8bcbe?st=tMbhHA

This week’s bull/bear report.

Technical Bounce On Inflation Data - RIA

Time for a Brazilian butt lift?

https://www.zerohedge.com/the-market-ear/are-you-ready-brazilian-butt-lift

TLT also managed to recover---the difference being that it remains below all DMAs and in very short term, short term, and intermediate term downtrends. I have said several times over the last weeks that TLT is a market in search of a bottom. Whether or not that has occurred is a matter of time. I would do nothing until it is clear that last week’s pin action is more than a bounce in a bear market.

Long rates are too high.

https://www.apolloacademy.com/long-rates-are-too-high/

Gold was up on the week, continuing the surge above the downtrend off its October high. However, it failed to make a higher high. I believe that it probably will make it to its former all time high (and the upper boundary of its very short term trading range), especially if TLT continues to rally.

https://www.zerohedge.com/precious-metals/next-phase-golds-bull-market-has-just-begun

The dollar continued its recovery and further improvement is likely due to (1) the economic numbers are favoring a strong dollar and (2) its longer term technical picture has some positives: it is [a] above its 100 and 200 DMAs, [b] in short and intermediate term uptrends and [c]) has that massive gap down open that needs to be filled.

Friday in the charts.

https://www.zerohedge.com/market-recaps/trump-trade-reignites-dovish-data-drives-everything-higher-ahead-inauguration

Fundamental

Headlines

The Economy

The stats last week in total were slightly upbeat as were the primary indicators (three up, two down). However, three of the positive indicators were not just good, they were off the charts (recall I wrote ‘no misprint’ three time). Overseas the data was quite positive. So, the numbers continue to track a ‘muddle through’ scenario (despite last week strong showing, remember the prior week was negative).

The inflation reports were mixed---one positive, one negative in the US: two positive, one negative overseas. And interest rates backed off their recent surge higher---likely the result of those strong ‘no misprint’ stats. Add in the inflationary implications of the Donald’s stated intention to raise tariffs and cut taxes and you have strong support for my ‘inflation is as good as its going to get’ call.

Bottom line: my outlook remains: (1) the economy ‘muddles through’ and (2) inflation has likely seen its lows.

International

November Japanese machine tool orders were up 3.4% versus consensus of -0.4%.

November EU construction output rose 1.3% versus predictions of +0.6%.

November UK (3mo/Y) average earnings rose 5.6%, in line; the November UK unemployment rate was 4.4% versus 4.3%.

December German PPI fell 0.1% versus estimates of +0.3%.

The January EU economic sentiment index came in at 18 versus projections of 16.9; the January German economic sentiment index was 10.3 versus 15.3; the January German current conditions index was -90.4 versus -93.0.

Other

Update on big four recession indicators.

https://www.advisorperspectives.com/dshort/updates/2025/01/17/recession-indicators-industrial-production-december-2024

Economic policy uncertainty index.

https://www.policyuncertainty.com/index.html

Macro questions going into inauguration.

https://www.zerohedge.com/markets/macro-questions-going-inauguration-goldman-thinks-trump-will-avoid-universal-tariff

Monetary Policy

We still have an inflation problem.

https://www.wsj.com/economy/central-banking/fed-interest-rates-inflation-beth-hammack-87ed422d?mod=economy_lead_story

Fiscal Policy

Reducing spending is the key to growth.

https://www.cato.org/blog/reducing-spending-now-key-growth-not-austerity

The bond market versus Trump.

https://www.ft.com/content/72019cc6-89f9-453c-9955-4cc26be3de3e

Executive orders

https://www.zerohedge.com/political/trump-issue-10-border-immigration-eos-along-dei-trade-energy-and-tiktok

https://www.zerohedge.com/commodities/trump-declare-national-energy-emergency

Tariffs

Goldman of Trump’s tariffs comments.

https://www.zerohedge.com/markets/goldman-views-trumps-day-one-trade-policy-more-benign-tone

Quote of the day.

https://cafehayek.com/2025/01/quotation-of-the-day-4892.html

Tariffs stand in the way of economic success.

https://www.wsj.com/economy/trade/donald-trump-economy-tariffs-60408258?mod=economy_lead_pos1

Investing

The latest from BofA.

https://www.zerohedge.com/markets/hartnett-historic-rout-treasuries-over-trump-cant-allow-bigger-debt-and-deficits

The Market mood is swinging to short term bullish.

https://www.zerohedge.com/markets/market-mood-swinging-short-term-bullish

I agree with the conclusion but not the premise.

https://investorplace.com/hypergrowthinvesting/2025/01/u-s-inflation-slows-why-now-is-the-time-to-buy-stocks/

Are blue skies ahead for crypto?

https://nypost.com/2025/01/16/business/new-trump-ends-crypto-communitys-government-harassment/

Investor Alert

At the Market open, the High Yield Portfolio will buy a one half position in Eversource Energy (ES) and the Dividend Growth Portfolio will Buy one half positions in Amgen (AMGN), Hershey (HSY and Constellation Brands (STZ).

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.

Wednesday, January 22, 2025

Tuesday, January 21, 2025

Tuesday Morning Chartology

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