The lesson taught and largely learned: Buy-the-Dip. Courtesy the Federal Reserve.
Picking winning stocks is not easy otherwise everyone would be rich.
What the chart shows
This chart tracks unemployment trends from January 2019 to August 2024 for all 50 states in the US as a group. It highlights whether their unemployment rate has increased, decreased or remain unchanged compared to the previous month. According to the latest data recorded, 31 states experienced an increase in unemployment, five saw a decrease, and 14 had no change.
Behind the data
The US jobs market is showing signs of softening. The national unemployment rate has climbed from a low of 3.4% in 2023 to 4.2% as of October 2024. This increase has not been spread evenly across states. Rhode Island, South Carolina and Ohio have seen the largest increases in their unemployment rate over the past year, each climbing by more than a percentage point. Conversely, unemployment rates have fallen in Arizona, Mississippi, Connecticut, Wisconsin, Iowa, Maine, Tennessee, Arkansas and Hawaii.
Given that promoting maximum employment is one of the Fed’s dual mandates, continued labor market deterioration could prompt more aggressive interest rate cuts from the Federal Open Market Committee (FOMC).
What the chart shows
This chart compares global trade growth with key shipping rate indices to highlight the relationship between global trade activity and fluctuations in shipping costs, which can serve as a key indicator of supply chain pressures.
Behind the data
Shipping has become a major issue in recent years, impacted by events such as the pandemic, the Suez Canal blockage, and now the latest concern: the International Longshoremen’s Association (ILA) strike. Nearly 50,000 ILA members have walked off the job, halting operations at ports along the East and Gulf Coasts. This disruption has affected the flow of a wide range of goods, from perishable items like bananas and European alcohol to cars, furniture and industrial parts, potentially leading to shortages and price hikes. While many holiday goods have already been shipped, continued delays could drive up prices for perishable products and other imports, further straining supply chains and fueling inflation.
What the chart shows
This chart displays the daily return correlation over the past year between MSCI US and European sectoral indices and crude oil prices (WTI and Brent). It highlights sector sensitivity to oil price movements and shows how crude oil may impact sector performance in the US versus Europe.
Behind the data
The results show strong positive correlations between energy sector equities and crude oil returns in both the US and Europe, with coefficients ranging from approximately 0.5 to 0.6. In contrast, other sectors exhibit relatively low correlations with crude, with some showing small positive or negative coefficients. While crude prices play an important role in energy stock valuations, they appear to have little influence on most other sectors.
What the chart shows
This table presents a heatmap comparing the year-to-date (YTD) and recent performance of various hedge fund strategies – such as absolute return, multi-strategy, systematic diversified, market directional, multi-region, and fundamental growth equity – against global equity benchmarks.
Behind the data
The heatmap reveals that these hedge funds have generally underperformed stock benchmarks like the S&P 500, MSCI World, and MSCI EM indices, possibly driven by factors such as the rise of AI, the resilience of the US economy amid recent softening, continued Fed’s accommodation, and renewed stimulus from China.
So, despite being exposed to higher risks, hedge funds did not necessarily outperform equities during this period.
Mr FFF
Hurricane Milton is en route for Florida, once again reminding citizens of Florida what a stupid state they live in. If not getting wiped out by ‘Canes, they’re getting CHASED AND KILLED by alligators or their faces eaten off by Miami Zombies. I can see how one might want to own a winter home in Florida, to escape the pangs of bone shattering frost. But to live there is another story, totally contemptible behavior choosing to live in the swamp amongst the gators and snakes. To choose Florida as your primary residence, it takes a certain type of person if you know what I mean: a gypsy land traveler without roots to proper areas of the nation.
As for markets, we have BIG SPIKES in crude oil, treasury bond yields and lithium. The fact the US 10yr is above 4% speaks to the hilarity of you losers attempting to buy bonds into a rate cutting cycle: TRICKED AND FOOLED again. This was a crowded traded and now you’re at zero.
The rallies in oil is intriguing and might signal a larger scale rotation into oil during the seasonally excellent period of time for the commodity.
Lastly we have $LAC and other lithium stocks taking off. I took profits on everything at the open and locked in +32bps of gains, which is better than the losses you’re sitting on now. I do see Chinese stocks flying and other low brow denizens of ill repute. I will not be lured back into the vipers pit just so that markets can red candle me to death. Since I have chores to do, people to speak to, I will remain in cash until later on.
From reading the Silver thread, there seems to be a belief that the US will win in Ukraine:
At close to 70 tons, and in some configurations closer to 80 tons, the Abrams is one of the heaviest tank classes in the world and carries significantly more armour than most other tanks.
The first deliveries of the vehicles to Ukraine in September 2023 fuelled widespread projections in the Western world that they would provide overwhelming superiority over Russian armour and allow Ukrainian units to may important breakthroughs – potentially even spearheading an assault on the Crimean Peninsula.
Over 20 of the 31 tanks delivered to Ukraine are now thought to have been destroyed, disabled or captured, with at least one of the kills having been achieved by a Russian T-72B3 tank after the two exchanged fire in the first week of March.
The vehicles were notably deployed to the frontlines only after almost five months in Ukraine, with the tanks first seen deployed on February 23. The first loss of an Abrams tank was then confirmed three days afterwards. After multiple further losses in February and March, the Ukrainian Army in late April withdrew its remaining Abrams tanks.
Losses have remained high, with some recent kills confirmed on July 30, on July 3, and previously in early May, all of which saw the vehicles filmed being destroyed by guided artillery. A more recent kill on August 11 was filmed being achieved by a drone.
Who is Jake Sullivan? He is the National Security Advisor. LOL.
From Robert Gates:
The US dollar is backed by the US Military. Oh dear.
Perpetual war has bankrupted the US. They are not losing, they have already lost. Empires don’t die overnight, they take decades to roll over into obscurity: Rome, Great Britain, etc.
As such, the USD and UST are un-investable. Gold is a zero coupon perpetual bond. The allocation in a 60/40 portfolio would have gold replace the bond component. For the really brave or risk seeking you could add in BTC.
The question is: can the powers that be, Treasury & Fed, avoid a recession? From previous charts it can be seen that stocks suffer their worst drawdowns during recessions rather than war. War is inflationary and can be a boon to stocks as long as it does not break loose into a hyper-inflation. Even then, nominal gains can be made, although real returns are zero or slightly negative, but much better than the currency.
The unemployment data from individual States is not good. Much of the improvements claimed come from government jobs. This is not progress.
The longshoreman’s strike, will if it continues, increase inflation (which is good for the Treasury) and nominal GDP.
Oil prices are still jumping. The US needs them to stay in the $70-$90 range. Outside that range bad things start to happen. Currently at $77/barrel. Not a problem yet and good for shale production which is looking a bit shakey (more later). But bad for everyone else if they keep moving higher.
USD on the move, but looks to be topping out? Yellen really needs this lower. She has many levers to pull to force it lower. Market forces will also drive the USD lower. This is a short that will last years as a trend.
jog on
duc
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