MDM has switched to a BUY signal. The PCE, CPI, and PPI numbers have been bullish for the markets as they anticipate these numbers to drop further. GDP has been strong coming in at 4.9% in the most recent quarter. E/acc (exponentially accelerating technologies) such as AI are contributors which, as I've written in prior reports, may postpone or soften any recession. Further, the Democrats will do what they can do keep Biden in the White House. In consequence, the Fed has signalled it is done raising rates. CME FedWatch futures predicts no more rate hikes with the first rate cut in May 2024. Meanwhile, as stealth QE continues onwards, US and global M2 liquidity have been trending higher. Note how the black line below which represents all major central banks had been trending lower for most of this year but then as of October, went sideways, and is now trending higher.
Juggernaut AI-related stocks have shot higher since the bounce showing leadership strength with some hitting new highs. NVDA, GOOG, AAPL, AMZN, META, and MSFT are some examples.
Shortly after the Christmas crash of Dec 24, 2018, the Fed stepped in and said they would cease tightening the balance sheet, ie, would halt rate hikes. This was the market low. Both stocks and crypto rallied in the ensuing months. Recently, the Fed, the Bank of England and the European Central Bank have all signalled the potential end of rate hikes. Since 2022, rates were hiked in record time which caused some banks to destruct due to their long bond exposure. So while central banks try to fight inflation, they are forced to print along the way to rescue banks, service onerous levels of debt, and fund unfunded liabilities such as pensions and IRAs.
An economy that remains too strong or inflation that ticks higher could force the Fed to potentially hike rates again. An economy that starts to deeply falter would force the Fed to lower rates in a hurry. At present, we seem to be in the middle ground due to the manipulated inflation figures thus major stock indices could continue to rally overall at least for now.
Suggested ETFs (Note: Many members buy the standard ETFs or their preferred ETFs. This list serves as a guide as to which ETFs we think may outperform, but the key point is to be on the right side of the market regardless of which ETF or ETFs one chooses.)
1-times
SPY (S&P 500)
QQQ (NASDAQ-100)
BOTZ (Global X Robotics & AI)
2-times
SSO (S&P 500)
QLD (NASDAQ-100)
3-times
UPRO (S&P 500)
TQQQ (NASDAQ-100)
TECL (Direxion Trust Technology)
NOTE: This is a suggested list. Investors may wish to become acquainted with the full range of available ETFs, and should make an effort to understand how these ETFs are created and what their components are, as well as being aware of the downside risks involved, especially with leveraged ETFs. Certain ETFs may be more appropriate depending on one's risk tolerance levels. Typing in keyword 'ETF' into the FAQ keyword search bar or going here https://www.virtueofselfishinvesting.com/faqs/search?p=1&q=etf and visiting this site https://etfdb.com/ can be instructive.