The market is on auto pilot with clear skies ahead! The economy is doing so good that all analysts and fund managers are downright giddy. They also find excuses to believe that a rate cut is happening this year. No they see it in FIRST HALF of 2024. Astonishing how the mind can make a slight adjustment to include even a healthy housing market with rate cuts. THIS FED would never ever lower rates without a real recession already here.
The last piece to the economic strength is HOUSING, a big-ticket item. It is recovering very nicely. Earnings however has baked in multiple rate cuts this year. With China finally getting its act together and the PPI finally spiking higher we have a prescription for an early 70's style rebound in inflation.
The inflation data for next month will set the stage for an extended rally or one that is cut short and destined for a dramatic drop in early July. I have no idea how inflation behaves in the coming months but do know it certainly will NOT allow the FED to LOWER RATES! The VIX is now at 14 again so complacency is in the extreme realm. Like all past blow off tops this one should be the same. You can guess when the 90 degree move up occurs and for how long but the pattern seems pretty darn clear. We either get a double top formation lasting a few months or a spike move followed by no preparation for a starling crash. The latter is rare and should require some external data or event that triggers such a mass exodus.
So for now July is the next likely trigger point. If we survive that month intact October becomes an odds-on favorite seasonality month to experience a generational crash. This is similar to the dot.com froth, Pandemic dismissal. AI, Bitcoin, protectionist legislation against China reminds me of a nation that believes they have all the cards and doesn't have to share or be worried about future consequences.
All this as TRUMP the preemptive favorite to win the next election has no money to secure a bond and will likely lose the Hush Money case before election. This as his Hitleresque style pledge becomes more exposed by himself with favorable outcomes. Seems finally the news agencies and Democratic Party are resigned to the fact that FACTS, IMMORAL ILLEGAL behavior has no bearing on the next election. the PUSSY MAGNET lover of ruthless dictators and desire to side with the evil axis seems to have no one consciously seeing any future danger for themselves. It is as if a Pandemic is a concept far removed for our soil and will remain so. We gladly gleefully jump over a thousand-foot cliff and expect the laws of physics to revert to a road runner comic strip.
In other words, folks, how in the world do we not see this coming? Like the 12-year reign of HITLER the actions and promises by Hitler on day one was well known and the ability to deceive ourselves for so long is testament to our long-twisted road of pure luck that we survived this long. The odds of this next mistake allowing us to beat the odds is very slim and almost non-existent.
What a perverse story line us humans have written into history. It is almost as if by design, divine providence. Just when we are on the brink of a revolutionary leap in science and knowledge our primitive emotional baggage will manage to destroy us as we approach God-like powers. The very thought of TRUMP as the front runner has to seal our fate regardless of the outcome. He now represents an ideology that people crave, and it requires no specific person to carry it forward. The whole GOP on all government levels have already figured this out. Banana Republics are not equipped to rule the world and struggle to rule themselves. This is now who we are. ENJOY the moment!
