RF's Financial News

RF's Financial News

Sunday, January 7, 2024

This Week in Barrons: January 7th, 2024


New Year’s Resolution  Improve your ability to Make Quicker Decisions.  Great leaders have perfected quick decision-making.  Success is directly correlated to faster and more frequent decision-making. 


Calling all Audience Builders in 2024…  Per Shaan P: 

-       #1 - WHO follows you always beats HOW MANY follow you.  You would rather have 1,000 customers who LOVE your product, than 1m people who kinda like it?  You would rather have half of the Fortune 500 CEOs, than 1m random users.  You're building a ‘magnet’ – not an ‘audience’.  You’re creating content that attracts a specific type of user.

-       #2 - You want to be KNOWN WELL – not WELL KNOWN…  Fame is not the goal, but attracting a small group that knows a lot about you is.  Remember the 4 D's: 

o   Do – People love people who get stuff done.

o   Done – Historically what did you do, but (more importantly) Why did you do it?

o   Deliver – WIIFM (What’s In It For Me) to listen to you?

o   Dorkyness – Show a little piece of the-inner-you every now and again.  If managed correctly, the more you ‘open the curtain’ – the luckier you’ll become. 

-       #3 – CONTENT is King…  A+ content with C- delivery, always beats C- content with A+ delivery.  Don't waste time on sizzle / packaging.  Spend your time living an interesting life – so that you actually have something to say. 


Measuring Productivity covers quite a range:  Per Seth G:

-       I did enough to not get fired.

-       I did enough to get a better job.

-       I solved a problem for a customer / co-worker = everybody wins.

-       I helped to invent something that creates possibilities.

-       I created something for myself and others to use.

-       I did not waste today!



The Market:


Fair Warning Levels:

-       QQQ < $400 ($397):  The first warning of a ton-so-great market environment would be a breakdown in the Nasdaq and the Small-cap Russell. If the Nasdaq100 ETF is below 400, that would put it back below former highs, increasing the vulnerability for further downside, or even a grind sideways.


-       IWM < $200 ($193):  Similar to the QQQs, a failed breakout of the IWM above its most recent highs would increase the vulnerability for further downside.


-       DXY > $102 ($102.4):  If we start to see a stronger US Dollar, that is most likely happening in an environment where stocks are under a lot more pressure.  The Dollar has fallen since peaking on October 3rd – the day the number of new lows peaked on the NYSE.  Recently the Dollar (DXY) has started to rally and that has corresponded with the peaking of new highs on the NYSE.



InfoBits:



-       19 years ago was eBay’s first listing…  a broken laser pointer for $14.83.


-       X’s stock is down ~70% from ATHs…  and now worth $9B in total.


-       Premium smartphones are ~25% of the entire market…  and iPhone controls ~70% of that market.


-       Tesla sold 485k EVs in Q4…  but BYD sold 526k.


-       Streaming video subscribers are churning at ~80% / year.


-       December’s ISM Manufacturing PMI…  remained in contraction territory for the fourteenth straight month as new orders, backlogs, and employment all fell.


-       Job openings fell…  to their lowest level since March 2021, and the level of job quits fell below pre-pandemic levels.


-       13-year-old Willis Gibson of Stillwater, Oklahoma…  became the first human to beatTetris by getting so far in the Nintendo version that he froze the screen. 


-       Global VC deals were down -54% in 2023 vs. 2021.


-       The Mediterranean diet won 2023 Diet of the Year.


-       December’s ADP Payroll report showed…  the U.S. adding 164k jobs – topping November’s 101k.  Wage growth slowed, with those staying at jobs seeing a 5.4% YoY wage increase and job hoppers seeing an 8.0% rise.


-       Our FDA approved a 2-year plan…  that will allow Florida to import certain prescription drugs from Canada at a lower price than in the US.



Crypto-Bytes:


-       The crypto sector pulled back…  on mixed reports that the spot Bitcoin ETF proposals are set to be rejected by the SEC. 


-       Michael Saylor (MicroStrategy CEO) plans to sell…  $216m of MSTR shares to address personal obligations and to personally buy more Bitcoin.


-       ~$44,000 is presenting a difficult level for Bitcoin…  and support on the monthly chart is ~$36,000.  Don’t be surprised to see some flatness and volatility until we get closer to EOM.


-       Argentina recognized Bitcoin for contracts…  marking a significant step in cryptocurrency adoption that will revolutionize contract dealings in that country. 



TW3 (That Was - The Week - That Was):


Tuesday:  After near record closing highs for major averages to end 2023, some profit taking is pushing U.S. futures lower to start 2024.  Some U.S. 2023 gains were: 

-        The Nasdaq 100 soared 54% for its best year since 1999. 

-        The S&P 500 ended 2023 with a 24.23% gain. 

-        The market is expecting ~150bps in FED rate cuts in 2024. 

-        The 10-Year is back over 4% – and the dollar (DXY) is over $102. 


Wednesday:  This market isn't liking what it's seeing thus far in 2024.  You know it’s a risk-off market when the leaders are utilities and healthcare.  I suspect that a lot of fund managers didn't want to sell any of their holdings in December (and pay taxes in April 2024) – so they’re taking profits now and waiting until April 2025 to pay the tax.  


Friday:  So, it's Jobs Friday and the numbers are all stronger than expected.  The Street was looking for 170k new jobs in December and we got 216k.  They were hoping that wages would be flat, but instead they rose 0.4% in December.  And the Labor Force Participation rate even moved higher.  This does NOT bode well for the market's hope of six rate cuts in 2024.  But heading into the open the market is shrugging off the report because the last 3 jobs reports were revised lower, so they figure this one will be as well.  But inside the report, there was some horror.  

-        Part-time workers SOARED by 762k to the highest on record, 

-        Multiple jobholders ROSE  to an all-time-high of 8.6m, and

-        Full-time workers FELL to levels not seen in a year.  

On the merits of that, they figured this jobs report is not going to stop our FED from cutting rates.  Then the ISM hit and it was lower than feared.  This market is not impressing me as of late. 



AMA (Ask Me Anything…)


The latest financial advisor survey shows:  Per Anthony P:

-        ~40% of all advisors believe we’ll see a bitcoin ETF in 2024.  By contrast, Bloomberg’s ETF analysts peg the likelihood of a January approval at 90%.

-        ~90% of advisors interested in buying a bitcoin ETF…  will wait until after a spot bitcoin ETF is approved.

-        ~20% of current advisors are able to buy crypto for clients.

-        ~100% of all advisors who currently invest in crypto for clients…  plan to either maintain or increase that exposure in 2024.

-        ~90% of advisors…  received a question about crypto from clients last year.

-        ~60% of advisors had ‘some or all’ of their clients investing in crypto…  on their own – outside of the advisory relationship.

-        Crypto ETFs were advisors’ top choice…  when asked what type of crypto exposure they were most interested in allocating to in 2024.

-        ~65% of advisors cited regulatory uncertainty and volatility…  as their top stalls and objections to greater crypto portfolio adoption

-        ~70% of advisors favor bitcoin over Ethereum…  due to the realization that bitcoin is a monetary asset and Ethereum is a highly-competitive tech-platform. 


It would not surprise me to see advisors allocate to bitcoin and then indexes as they begin to enter the space.  Selecting a winner between Ethereum, Solana, Avalanche, and hundreds of other tokens is just outside their wheel house.



Next Week:  Good Markets Gone Bad…


Listen to the Beat of Volatility…  and my big ‘gotcha’ for the week is: ‘I never like it when the SPX is rolling over and the VIX (volatility index) is not moving higher.’  Tip #1: Let the trades come to you, and if they don’t – sit on your hands and live to trade another day.


Finally, Economic Data challenges the 6 Rate Cut scenario…  and our FED’s rate cut display is now only showing a 66 percent chance of a rate cut in March.  I don’t think that particular rate cut will happen, but at least we’re probabilistically moving in the right direction. 


Bonds are starting to fade…  and with that naturally come higher rates (/ZB) and the S&Ps (SPX) moving lower – which all occurred in a very orderly fashion last week.  


The FED speak is going to be exciting and uncontrolled next week…  We could hear them talk about strong economic data forcing ‘rates to remain higher for longer’ – and that will rock markets to the downside and cause a rise in intra-day volatility.  Right now, the ‘speed bumps’ in the road to a higher market are all focused around the economic data.  Nobody cares about the bank earnings that start at the end of next week, but everybody is going to be watching next week’s CPI and PPI numbers. 


Worried about:

-        DOLLAR (DXY) over $102 – tough for markets to digest,

-        APPLE (AAPL) under $180 – (a drop of 10% in a month) is causing a lot of retail investors to get nervous, and 

-        Other Magnificent 7 stocks (AMZN, GOOGL – are also beginning to falter.

-        Tip #2: Markets do NOT tank from over-bought conditions, but rather from being over-sold (as we are now).  An early warning sign of a tanking market would be profit-taking in last year’s big winners = The Magnificent 7.


SPX Expected Move (EM):

-        Last Week: $52 … and we moved ~$70 lower.

-        Next Week: $61 … this seems low.  

-        Tip #3: Wait to sell premium until AFTER our FED starts speaking this coming week. 



TIPS:


Get Long assets that benefit from currency debasement…  as Anthony P. writes:    The US national debt made an all-time-high this week.  That’s a 55% increase over the last 5 years.  We are a nation addicted to printing money, and there’s no end in sight.  The sheer size of the interest payments associated with the national debt, our debt-to-GDP ratio, and our forever inflation – mean that we will need to continue debasing our currency.  That means the generational trade is to be long assets that benefit from currency debasement.

-        #1 = Bitcoin – due to its finite supply and store of value.

-        #2 = Gold – but most of that upside was captured by previous generations.  

-        #3 = Real Estate – that always does well in this type of scenario.  

The set-it ‘n forget-it trade is to get long investment assets that benefit from currency debasement - avoiding many stocks, cash, and bonds priced below inflation.


HODL’s: (Hold On for Dear Life)

-       13-Week Treasuries @ 5.2%

-       PHYSICAL COMMODITIES = Gold @ $2050/oz. & Silver @ $23/oz.

-       **Bitcoin (BTC = $44,100 / in at $4,310)                 

-       **Ethereum (ETH = $2,260 / in at $310)                  

-       **MARA – Marathon Digital = ($24 / in at $12) 

         ?? Time to sell some Covered Calls on an UP-day ??       

-       **ChainLink (LINK = $13.4 / in at $7.78)                 

-       **RIOT – Riot Platforms = ($14.8 / in at $12.5)       

         ?? Time to sell some Covered Calls on an UP-day ??       

-       **COIN – Coinbase = ($154 / in at $125)                 

-       UEC – Uranium Energy Corp ($6.4 / in at $4.8)      

-       AAPL – Apple = ($181 / in at $181)                         


** Crypto-Currency aware


Follow me on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm.


Please be safe out there!


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