Things are Setting Up…

A lot of information has spewed forth during the first 100 days of Trump.

1. First, the animal spirits have come back, the index indicator I follow hit its recent high at 2.94 during the Biden rally in December, then declined to 2.40 on the Trump crash on April 9, and today climbed to a high of 2.88, settled back a bit to 2.86 at the moment at 9:30 AM CDT. A bit of short term euphoria.
2. Talk is building by the bulls for an S&P run to 7300 to 7700 level. Based on this little bounce that we have seen so far from the April 9 lows, it is apparent that AI and NVDA will be key to this kind of further run if it occurs, and of course along with Hollywood type hype out of the Whitehouse.
3. In the meantime, forward buying by corporations and consumers has served to hold back the inflationary impact of the tariffs. So, it will probably take a couple of months to see what the new inflation environment has in store.
4. Trump’s alliance with the Saudi’s is holding down oil costs, so that helps keep inflation under control. Sorry, all you U.S. small time drillers that are now forced to sell at breakeven or less, the Saudi’s will come to your rescue and cut production as soon as Trump has his tax cuts in place.
5. My long-term bottom line at the moment is looking at the recession / depression to be pushed back to the fourth quarter 2025, after the euphoria of the blow-off market top in stocks and the recognition that AI is not compatible in a negative growth environment.
6. During this first run-up from the April 9 lows we saw our Climate Tech portfolio rise 39 % into yesterday’s highs, so our short hedges worked as the NDQ was up only 22 %. As of the last two days, the model has increased the leverage on the short hedge side as things are a little frothy.
7. At this very moment stocks will probably take a breather as inflation concerns start to build again. Support in the Nasdaq 100 will be found around the April 29 lows of 17,300.

2025 Forecast Update;

With the first quarter real numbers on GDP, monetary numbers and prices now out, I am updating the January 7th 2025 forecast piece on the front page of the website. Trump’s tariff rampage kind of pushed everything back about six months, but I still see the same overall 2025 pattern, euphoria followed by implosion.