- Things do not change; we change.
- Henry David Thoreau
The Bear Goes On...
The market has no fear as the Dow seems to hit new record highs every week. The industrials have gone straight up since last November at 33,961. Last Friday, it loomed at a new record at 39,475. The SPX copies the move. Last April the price was 385 and last week, a record close of 521. Friday was a down day, the SPX was even higher the day before at 522.
However, we remind you, Dear Reader that beside all the huff and puff of the Bulls, this is not a true rally according to Dow Theory. The transports are still in consolidation. Both indexes need to be in conjunction for a true rally. Big money does not see anything, but cheaper money coming with the Fed offering three rate drops sometime this year. We heard this song before from Sonny and Cher, "The Beat Goes On."
What We See...
Biden signed a revenue package last Friday to keep the government solvent. Throw another $1.2 trillion to the problem. We ask, Did we make $1.2 trillion to cover this debt? Folks, the interest alone for January 2024 from our debt was $184 billion. These idiots have no sense of value. They display no responsibility, character and leadership. By the way, tax revenue dropped by 93% for January. Debt makes our currency cheaper to which gives us inflation.
Then, we read this...
Companies laid off 82,037 employees in January 2024. Unemployment is spreading as we hear that Barclays bank is forming a list of pink slips. Nike is laying off 1600. They see something, but they are not saying what they see. Someone knows. It shows in the charts. Last May, Nike (NKE) was $126 and then fell to $88. It bounced to $123 and last Friday fell to $101 on strong volume. How about another big boy, Apple? It rose to $198 and last week fell to $172. One more? How about the high flyer, Lululemon? This meme stock hit $519 in January 2024, only to bury investors last Friday at $403. Ouch!
Same old, same old
When a merger comes, the buyer always says, "This is good and no jobs will be lost." Then, cost cutting comes and jobs lead the list. We saw this again as Ben & Jerry's announced a merger. Now, they plan to release 7,500 workers. Back to Biden...
He will push his electric vehicle charging stations as part of his reelection campaign. However, Tesla (TSLA) continues to dive lower and lower. We feel $101 is coming. The electric vehicle stock was $300 last July. The #3 carmaker, Stellantis (Dodge) is laying off 400. Mostly from the electric division.
If all of the above does not deter the Bulls, how about this tidbit? US bankruptcies hit a 13-year high in 2023 and the expectation for 2024 is even higher. We add that vacancies in commercial real estate rose 19.6% in the fourth quarter of 2023. The CAPE sits at record highs of 34 and yet, the Bulls worry not. Does John Calipari worry about his $33 million paycheck after his Kentucky basketball team lost again to a 15-seed in the first round of March Madness? Do investors in Digital World worry about evaluation? It is in the billions for a media company that only has $3.4 million in revenues. Do the Bulls read about the pending longshore strike in the port of LA? In a related message, the CEO of Maersk, the largest shipper saying, "Overcapacity is killing shipping rates." We think not. By the way, Maersk chartered the ship that hit the bridge in Baltimore.
On the flipside...
A crazy stat. AI will consume more electricity by 2027 than the nation, the Netherlands.
Germany has legalized pot smoking. If you have not made it a Lenten sacrifice, take a puff and reread the above. Exhale. Thank God for all His blessings. Have a wonderful Easter, Passover, Ramadan or any other follower of a higher power. Take consolance that in this aspect, we have a common understanding and agreement. Even the atheists realize that faith believers make the world a better place...Peace.
