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BA Deere
Honored Advisor

Broader markets

Precious metals have climbed a wall of worry, Dow is strong, Nasdaq is in record territory. Haters will no doubt be strumming their one string banjo on the upcoming "brutal" earnings report.   Ethanol higher priced than RBOB.  The hopper dumps were under the the unload augers and Thursday was the last day  to strip the milk out of the rally cow.   5 and 5 lower corn & beans...15 billion bushel corn production coming, have your surf boards waxed, dudes!

Dicamba, wind & hail, it isn`t in the bin yet.

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16 Replies
sdholloway56
Senior Advisor

Re: Broader markets

Banks will go first and they got a huge windfall as the laundromat for the Big Stormy payments.

The only thing I know is that the return to the broad market will be lucky to be nothing over the next decade.

Into 2025’s seed corn.

Doesnt matter for those with particularly urgent political agendas.

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sdholloway56
Senior Advisor

Re: Broader markets

Generally, gold can be a good hedge but not evidence that all is well.

The broad market has thinned alarmingly with all the money piled into a few big tech lunatic stocks.

The broad NYSE index is where it was 9/17.

Fed expanded the monetary base $3T, all you need to know.

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sdholloway56
Senior Advisor

Re: Broader markets

I thought I’d never see it again but the Naz100/SP500 ratio is back to 2000 levels.

That went on longer than you might imagine. Might even continue through the election, not that it will matter a lot.

Other than setting the stage for another phase of America becoming not great.

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sdholloway56
Senior Advisor

Re: Broader markets

The only legislative achievement of this administration has been the tax cuts. The bit of sugar high faded rapidly and the economy began to stall- the manufacturing sector entered recession last year, partly due to trade frictions. Gwowth was settling back into the New Normal of 2% ish.

So the POTUS pressured the Fed into a volte face on rates and running off the balance sheet and a slug of repos for WS, which resulted in the first bubble. The 'rona popped that one.

Re-enter the fed with an unprecedented monetary blitz, plus huge fiscal action.

Unemployment is unlikely to return to more normal levels for several years, but there's never been a better time to be rich. Not conditions that are likely to engender social harmony, nor to be conducive to the the conduct of actual capitalism.

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sdholloway56
Senior Advisor

Re: Broader markets

By far the best, easiest plain vanilla investment has been the long bond.

Some smart guys say otherwise, but I can't wrap my head around a lot more appreciation with rates at 0.

That would require negative rates, or a terrible, deflationary economy. Which I'm not predicting, exactly. Since the day when Bernanke was groomed and brought in, the Fed's #1 job has been to stop any hint of outright deflation.

The world currently has $270K in debt for every man woman and child and that includes undiscovered indigenous folks in Papua New Guinea. Deflation getting a hold would be like smallpox in a Mesoamerican city.

Since the US and world went debt mad beginning in the 80s, I've continually mused over the end game. Still no closer to figuring it out. But you need to not lose track of the fact that inflation is very hard to get started in a world with this much debt but they will fight deflation tooth and nail. 

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sdholloway56
Senior Advisor

Re: Broader markets

Market cap for AAPL, MSFT, FB, GOOG plus AMZN up $2.7T

Fed expanded monetary base about that much.

Go Main Street!

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rickgthf
Senior Advisor

Re: By now,....

By now, it's pretty obvious that all the government stimulus has been captured by Wall Street but the damage to Main Street is just beginning to be seen.  Commercial rental property has collapsed because it's anticipated that so many small retail & service business will go under as soon as the free money runs out.

  On top of that, all the talk about an early vaccine has pretty much evaporated and we all understand what that means for the consumer economy.

  This is going to get a lot worse before it gets better.

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sdholloway56
Senior Advisor

Re: By now,....

“Good vaccine news” is the new “buy pets.com.”

Nasty flameout in some of the big lunatic stocks today and a big key reversal in the QQQ.

Looks like the pros have ridden the new day trade crowd far enough.

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bruce MN
Advisor

Re: By now,....

Re the new day traders.

I recall very well way, way back in the day as a youngster listening to the old curmudgeons who had lived through the 1929-until The War years whenever there would be a up open, noticeably down close saying “they’re just cleaning out the school teachers and the shoe clerks”.

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