Recently, Paul Tudor Jones made headlines stating that the #debt and #deficits would lead the U.S. into #bankruptcy. As such, he would not own #Government #bonds. We look at the data to see if it supports his claims.
realinvestmentadvice.com/resources/blog… The chart below shows the long-term view of short and long-bond interest rates, inflation, and GDP.
Interest rates rose during three previous periods in history.
1-During the economic/inflationary spike in the early 1860s
2-The “Golden Age” from 1900-1929 saw inflation rise as economic growth resulted from the Industrial Revolution.
3-The most recent period was the prolonged manufacturing cycle in the 1950s and 1960s. That cycle followed the end of WWII when the U.S. was the global manufacturing epicenter.
-The current surge in #inflation, and ultimately interest #rates, was not a function of organic #economic growth. It was a stimulus-driven surge in the supply/demand equation following the pandemic-driven shutdown.
realinvestmentadvice.com/resources/blog…

The #BullBearReport is out!
We have suggested a #rally was coming as #markets reached oversold levels. That #rally came with a vengeance following the #FOMC meeting. With #rate #hikes on pause, the #bulls bought everything from #stocks to #bonds. But will the rally last?
Given that the #Fed did little to talk up projections of further #rate hikes, the #market took this as meaning the Fed is likely done hiking rates.
The break of the 200-DMA was reversed on Thursday, and the 50-DMA was breached on Friday. Those actions set the market up for a rally into year-end.

The #BullBearReport is out!
Last week, we suggested a #market #rally was likely after the #correction to the 20-DMA. That rally took the market to a new 52-week. However, #complacency has become elevated. What is the $VIX telling us now?
realinvestmentadvice.com/complacency-se… With the #market back to more overbought levels, some #correction is needed to provide a better risk/reward entry point. Using Fibonacci retracement levels, investors should consider adding exposure at 4250 down to the 200-DMA.
https://t.co/mfrneEKHN5realinvestmentadvice.com/complacency-se…

Today's #blog covers why the #pain #trade is likely higher over the next few weeks as #sentiment improves and too much money is offside.
realinvestmentadvice.com/the-pain-trade… #Bullish optimism is building around:
- #Fed cutting rates
- #Economy will avoid #recession
- #Employment remains strong.
- #Earnings have corrected enough
Risk to that view remains a recession.
realinvestmentadvice.com/the-pain-trade…

Today's #blog is part 2 of our outlook for 2023. Why you will want to own #bonds in the first half and #stocks in the 2nd.
realinvestmentadvice.com/the-2023-inves… The #inversion of 80% of the 10 #economically important yield curves also suggests a recession is likely. The inverted yield curves play an essential role in our 2023 portfolio positioning.
realinvestmentadvice.com/the-2023-inves…

For an #economy to flourish, and create #prosperity for the majority of participants, there must be a strong and vibrant #middleclass. Today's #blog digs into the disappearance of the economic engine.
realinvestmentadvice.com/there-really-i… The shrinking of the middle class is accompanied by an increase in the share of adults in the upper-income tier from 14% in 1971 to 21% in 2021. At the same time, there was an increase in the share who are in the lower-income tier, from 25% to 29%.
realinvestmentadvice.com/there-really-i…

Today's #blogpost discusses #Grantham's recent comments on the #SuperBubble's final act. Is that the case, or is this time different?
realinvestmentadvice.com/superbubbles-t… We find ourselves at the crossroads where #markets and #fundamental realities meet. From this point, the outlook for equities over the next 9-12 months is more #bearish than #bullish.
realinvestmentadvice.com/superbubbles-t…

The #BullBearReport is out.
The #market started with a strong #rally, then #stumbled into week's end. With #oversold conditions still intact and CPI next week, the #bulls have a shot at a rally if #inflation shows some signs of cooling.
realinvestmentadvice.com/market-rally-s… Moving forward, YoY comparisons become more challenging at 0.9%, 0.7%, 0.6%, 0.6%, 0.8%, and 1.2% through March 2023. In August, #inflation will drop to 7.9% from 9% in June. Assuming an avg. 0.2% MoM increase, CPI hits the Fed’s 2% target in June 2023.
realinvestmentadvice.com/market-rally-s…

The #BullBearReport is out.
The #rally runs into resistance and backtracks as #overbought conditions slow the #bulls. Is the run over, or just resting? We review the #FOMC minutes, what it means for #investors, the #technical backdrop and #allocations.
realinvestmentadvice.com/fomc-minutes-e… At 2-standard deviations above the 50-dma, and the 200-dma acting as resistance, the #market pullback, as discussed last week, was expected. Support levels reside just below between 4000 and 4160.
realinvestmentadvice.com/fomc-minutes-e…

Today's #MacroView is out. Why today isn't 1982 and Jerome Powell isn't Paul Volker.
realinvestmentadvice.com/paul-volker-an… The road to 1982 didn’t start in 1980. The buildup of #inflation started long before the #ArabOil Embargo. Economic growth, wages, and savings rates catalyzed “demand push” inflation.
realinvestmentadvice.com/paul-volker-an…

The #RealInvestmentReport is out!
The #rally that started 3-weeks ago ended abruptly as concerns of #inflation, the #Fed and rising #recession risk spooked #investors. With the Fed set to hike #rates next week, we increased hedges and cash last week.
realinvestmentadvice.com/rally-fails-as… After struggling at the 38.2% resistance level, #inflation, #recession risks, and the #Fed spooked #investors last week. #Market now retesting previous lows. Now back to short-term oversold, looking for a small bounce next week to add to #short #hedges.
realinvestmentadvice.com/rally-fails-as…

A significant #bond #buying opportunity is approaching.
As bond yields surge, history and #techncial analysis suggest that we should look at bonds for both #capital appreciation and a #risk hedge.
realinvestmentadvice.com/surge-in-bond-… In Dec 2018, we wrote why Jeff Gundlach was likely incorrect about 6% yields.
“Rates are at levels that historically led to some sort of event either economic, financial, or both, When that occurs, rates will go to 1.5% and closer to Zero.“
We got to 0.5%
realinvestmentadvice.com/surge-in-bond-…

#RealInvestmentReport is out!
Despite the expected #surge in #inflation early in the week, #bulls picked themselves up to rally #stocks into Friday. We discuss the potential for a short-term #bounce, why the #Fed will make a #mistake, and #postioning now.
realinvestmentadvice.com/despite-surgin… #LessonLearned - don't anticipate the turn in your #technicalsignals. As noted last week, it "seemed" the signal had turned, but it didn't. The #signal is very #oversold, so set up for a short-term #bounce is likely. Caution is still advised for now.
realinvestmentadvice.com/despite-surgin…

#MacroView
#NFIB data says we are only in a #recovery, not an #economic expansion.
While the NFIB data doesn't get much #media attention, it should as it tells you much about what is really happening in the #economy.
realinvestmentadvice.com/macroview-nfib… Reason I pay attention to #NFIB
Sept 2019 - Data rings alarm bells on #recession.
April 2020 - Data says recession arrived.
May 2020 - Data says #economic recovery not as strong as media suggests.
realinvestmentadvice.com/macroview-nfib…

#TechnicallySpeaking - Signs of #exuberance warn of a #correction.
An update of #margin #debt is sending off warning signals that we haven't seen since the last corrective cycle. Also, why this is NOT a #new #bull #market.
realinvestmentadvice.com/technically-sp… Repeat after me: March was not a #bearmarket.
‘Corrections’ generally occur over short time frames, do not break the prevailing trend in prices, and are quickly resolved by markets reversing to new highs."
realinvestmentadvice.com/technically-sp…

The @NFIB #survey doesn't get much #media attention, but it should. Small businesses make up almost 70% of #employment and their #confidence tells us much about the #economy and #smallcap stocks.
realinvestmentadvice.com/nfib-survey-se… In December, the #NFIB survey declined to 95.9 from a peak of 108.8. Notably, many suggest the drop was “#politically driven” by #conservative owners. While there was indeed a drop following the election, the decline continues what started in 2018.
realinvestmentadvice.com/nfib-survey-se…

Recently, Dr. Shiller suggested that #valuations really aren't that high once you fall in the #Fed trap of using #earnings #yields and #low #rates to justify it. The problem is it is a #rationalization to justify overpaying for #assets.
realinvestmentadvice.com/shiller-ecy-ju… The main problem in using low-interest rates as a rationalization to overpay for assets is that you have to also discount #future #cashflows for lower inflation and rates as well.
realinvestmentadvice.com/shiller-ecy-ju…

#RealInvestmentReport is out!
The #bullish #bias kept #market holding above recent #breakout levels, but extensions and deviations from means remain extreme. We could see further weakness next week before the year-end "#WindowDressing" #rally.
realinvestmentadvice.com/irrational-exu… While markets did weaken slightly over the last few sessions, the #market remained above recent breakout levels. However, with a short-term #MACD #sellsignal, and #options #expiration next Friday, we could see further weakness next week.
realinvestmentadvice.com/irrational-exu…

"Despite a few notable hiccups along the way, the bull market continues to prove insanely resilient.” @slangwise
What if? We explore what a 10-60% correction would do to investors and their #retirement. While this #TimeIsNotDifferent, you are.
realinvestmentadvice.com/market-downtur… @slangwise Looking at potential retracement levels, to the lows of 2018, or the highs of 2015-2016 would not be out of the ordinary. A mean reversion event would be the lows of 2016 to the highs of 2008.
realinvestmentadvice.com/market-downtur…

Q3-2019 EARINGS - The Good, Bad, & Ugly.
With the bulk of earnings in we can analyze just how "good" those earnings actually were, and what we should expect next. Also, what #profits are telling us. $SPY $TLT #Earnings #Profits #Recession #Reversion
realinvestmentadvice.com/fundamentally-… Earnings - The Good:
"With 73% of companies beating estimates, it certainly suggests that companies in the S&P 500 are firing on all cylinders, which should support higher asset prices."

However, as they say, the “Devil is in the details.”

REAL INVESTMENT REPORT - $OIL SENDS A CRUDE WARNING. A look at the warning sign being thrown off by the decline in #oil and what it may mean for the markets. $SPY $TLT realinvestmentadvice.com/oil-sends-a-cr… Those suggesting the drop in #oil is only a "supply problem" are looking at economic data which is both lagging and subject to revisions. Oil is telling you the global slowdown is coming home. $SPY $TLT realinvestmentadvice.com/oil-sends-a-cr…