Financial News vs. Noise
Besides a possible recession, I figured the most important issue next year is going to be the Fed’s view on interest rate cuts vs. the market’s view. That started to rear it’s head already as two Fed heads came out and put some cold water on what Powell said on Wednesday. Did Powell think he was misinterpreted and send these guys out to correct the record, or are they on their own? Was Powell premature?
Either way going to be interesting. I continue to think you need more than this to stall the momentum into year end, but I do think this is a problem next year for all those rosy forecasts coming out of Wall Street. If they are trotting out Nikileaks to write about it then maybe it is true?
So with one extra thing to worry about before Christmas I also wonder where the flows are going to be going into year end, and more importantly next year. The big investors were offsides coming into this year by being underweight or short tech after 2022. This year it looks like they have same type of positioning in commodity stocks. So for now, that’s our focus. Precious metals, oil, industrial metals, etc. We added to a few of these spots on Friday. SBSW is a name that Cramer first alerted me to when he told a caller not to buy it, so we did. FinTwit started talking about it yesterday. It’s in gold which you know I like, but it’s also in a bunch of other metals I’ve never heard of.
I picked up NUE in industrial metals as well. I’m fully aware that this could play out as a double or triple top however.
Range resources in energy.
Shippers are also picking up. I was in ZIM the last time it looked like commodities were going to pop, missed yesterday’s move unfortunately and wasn’t going to chase. So I picked up SFL instead, this one is tiny though so I had to buy shares instead of options, which I don’t like doing.
Shipping Stocks Jump on Withdrawals From Red Sea as War Hits Global Trade-Barron’s
Conflict in the Middle East is having ripple effects on global trade. Two shipping companies said on Friday that they are pausing traffic through the Red Sea following attacks on their ships.
People are starting to sniff around China again, so I added to my exposure, picking up NIO.
Cool thing about China is they are going to do whatever they can to stimulate their market. Not a big deal for long term traders, but if you are looking for short term pops this stuff is cool.
China's policy combo gives investors hope for a market rally-Yahoo
I also got some puts on UVXY. Remember the VIX ETPs are basically designed to go to zero.
Barring any fallout from the Fed heads, which could come as people digest their comments over the weekend, I think the strategy is the same:
Buy any dips that the market is willing to give you
Don’t chase stuff
Focus on commodities
I think you want to also buy dips in Magnificent 7 names, but highly doubt you are going to make in 2024 what you would have made in 2023.
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News vs. Noise
Just means investors need to pivot. Fed could be the Grinch who ‘stole’ cash earning 5%. What a Powell pivot means for investors.-MarketWatch
Biggest issues going into 2024-When and how much on cuts, and do we go into a recession? Stuff like this doesn’t look good. As the Fed Works to Slow Economy, Small Businesses Feel the Squeeze Some 30% of small businesses are using credit cards for financing, and their credit-card debt is up 20% from the pre-pandemic years, according to a report.-Barron’s
Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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