CLIFFORD BENNETT
GLOBAL FORECASTER
USA
FOCUS
Quick USA Overview
The US economy is showing signs of fresh exuberance on the Trump election outcome. As correctly forecast here, Risks do remain however.
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You may have been told the US economy is strong. Inflated GDP numbers on the back of runaway massive government spending has been the cover story, As have strong aggregate retail sales numbers which include the spending of the equally runaway rich, while disguising the seizure of spending by the great majority. Now consider a housing industry recession, manufacturing depression of some two years, crashing commercial property values in many major cities, consumer confidence and small business confidence at recessionary and worse, covid lockdown levels. Not to mention the number one cause of death for Americans in their prime, both male and female aged 18-44 years, over-taking heart disease and cancer... is drug over-dose. How could anyone argue the economy is strong or the society healthy?
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Excess spending at all levels of government, plus massive inputs to the military industrial machine is all money that finds its way eventually to the stock market. Stocks have detached from all other fundamental realities.
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In the end, yes, I still see risk of a major top. But when? I called some major corrections well in recent years, but the major high that myself and other seasoned traders have forecast has proven elusive. We are in the midst of a frenzied, psychotic, easy money keep leveraging up market. Meaning both that it is lasting longer than anticipated, and that the eventual true correction could be quite frightening. We will continue to monitor the market for any signs of such an eventuality for you. So keep revisiting.
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Clifford Bennett
Quick Australia Overview
AUS200 8425. 11 December 2024
We did very well to go immediately short again yesterday. And it continues to look very heavy indeed. You could probably even sell more today.
Good morning,
The RBA is behind the curve by a big margin, as is standard practice. I suspect the margin is in the order of 12 months.
Yesterday, as we have been saying had to happen, the RBA finally moved to a more neutral stance. In order to support the economy however, it should probably have already cut rates for the fourth time yesterday. Their high school economics approach of being data driven is a function of the Peter Principle at work. This institutionalises always being late to do anything. Up or down.
It means the normal ebbs and flows of the economy become an exaggerated roller-coaster affair. This is why I am such an avid critic of this defunct organisation and advocate for fundamental change of the institution itself.
This is important from a market perspective, because we have to understand the RBA will be too late to save the economy or the market. Too late, means rate cuts make no difference to the psyche of businesses and the population at that point, and therefore recessions can become entrenched and elongated as a result.
Leaving us with no choice, but to yell warnings from the rooftops to protect your well built portfolios.
Everyone is vulnerable in a significant down-turn period.
Clifford Bennett
snapVIEW 13 December 2024
EURUSD
Hovering near the edge of a precipice here.
Watch today's 3 min morning video TikTok Link LinkedIn Link
Good morning,
US Producer Price Inflation
Accelerated sharply on the month 0.4%, from 0.2%.
This does not mean it will flow through to the CPI however, as price competitiveness is now naturally re-emerging in most industries after having been totally vanquished by the covid crisis.
It is another pause for thought for the FED, but should not stop further rate cuts early next year.
US dollar strength is helping our short EUR and AUD views. Keep an eye on both for any further signs of potential fall away into a vacuum as the Holiday season approaches.
Gold had a sharp correction. It will be a challenging journey higher indeed. Tempted to buy a little here. Even though, there is still some downside momentum on the day. This type of action usually has an equal move, continuance or reversal to upside. Toss a coin, but prefer to be a buyer still.
May not be for everyone as a little late, but selling US Bonds today with a wide stop. Positioning for potential sell off in the new year. Which will not help equity valuations of course.
US500 SOMETHING BIG is about to happen in this market. There are valid arguments on both sides, so will respect the price action as it unfolds either way. More bullish fundamentally for the economy, but the dividends there are probably still a year away. Meanwhile, pre-election stresses will begin to re-emerge. I do favour selling, due to the good run already seen.
Australia is in all sorts of trouble and you have heard it all before from me. Keep selling is my mantra.
Have a wonderful weekend. We are doing reasonably well of late.
Clifford Bennett
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