- To master love, you have to practice love.
- Miguel Ruiz
We believe the above quote is appropiate for all of us to incorporate into our lives as a new year's resolution. Yes, it is good to watch our health with better eating and living habits. Yes, it is good to set a goal for ourselves. However, by seeking to put our best foot forward, we will be generating a more positive environment. We receive a better mental frame of mind as St. Francis reminds us, "It is in giving that we receive."
Bull Market?
The stock market hit new highs in the Dow and S&P 500. This would indicate a new bull market. However, according to Dow Theory, the industrials and the transports must be in conjunction. The transports are a long way from their last high. In addition, the old Wall St. adage about the "January Barometer" says the first week results sets the tone for the year. It was down. However, it is up for the month.
Bottom line: Disharmony. This translates to a wait and see. Maybe later today after the Federal Reserve announces the results of their meeting, we will glean a better insight. If no action and that is the prevailing thought, you can follow King $Dollar. This effects everything and the market goes inverse to the dollar price.
Economy?
The government would like us to believe that a strong stock market reflects our economy. It does not. Recent news about layoffs are tripping over into various segments from retail, Macy's to energy, Solar Edge to tech, Salesforce and Microsoft to service, UPS. Existing home sales for 2023 was at a 30-year low. Then, the government reported that unemployment fell to 3.7%. We do not believe this stat. Apparently, Jeffery Gundlach does not believe it either. He makes this observation, "88% of our states report rising unemployment." This does not jive. Nevertheless, most analyst say that the August low of 2022 will not be tested. Of course, this is an election year. History says the stock market rises in the last year of a president's term (President Cycle). With that in mind, we read two quotes from our leading financial institutions. Goldman Sachs says, "Trump will win." JP Morgan Chase says, "Biden will withdraw from the election." Talk about influencers?
Speaking of influencers, the IMF says, "Commercial real estate is under its worse drop in price and value during the last two years." We say that the worse is still to come. One strong indicator was Chinese real estate developers failed to repay oversea bonds. The value is over $100 billion.
Here is some other interesting notes. For the last 60 years a chart shows that the S&P rises in January and falls in February. In the declines in February, the fall is more prominent in the President Cycle year. Sebastian adds this: A four year chart on gold related to election years reveals gold fell in 2012, rose in 2016 and fell in 2020. If this is valid, this points to gold rising in 2024.
Harry Dent
This is someone whom we pay attention too. He is a financial bestseller. His theory on economics is based on demographics. China will not like his work, but it seems all industrialized nations are under the same problem, population decline. Harry sees a big crash coming. He says to look for market tests of price levels for proof. If NASDAQ falls below 10,088, look out! He adds the first of three down waves appeared in the August low of 2022. He adds Bitcoin should fall below $40,000 and all the way to its first pricing point.
Conclusion: This is a leap year and under the Chinese zodiac, its most favorable sign. Let us put forth Miquel's words to work and practice love, end war and violence and be grateful for the little things in life like the sun's warmth, smiles on faces, a safe home with food on the table. Peace.
