As expected… Trump won, even winning the popular vote. Equities have naturally seen a ‘Trump bump’, with the US equity market breaking new historic highs.
The mainstream cheerleaders are (somewhat ironically) delighted, touting #everythingisfine even louder than before the humiliating defeat of Harris.
The US/western economy is unquestionably slowing, with recessionary signs all over the place. Regardless of the remainder of the year, conditions are ever more difficult for the broken consumer. For many… there will be no Thanksgiving, nor a Christmas.
Two key charts…
The Sept’18th rate cut merits as the ultimate equity sell signal, with the Fed cutting by another -25bps to 4.50-4.75%, as of Nov’7th.
The US 10yr/2yr spread stands at +11bps.
The sustained uninversion merits as a second powerful equity sell signal.
Again… to be clear though, having printed a new hist’ high of SPX 6017, the m/t trend has to be seen as bullish.
Bears arguably need to see a monthly settlement under the monthly 10MA (5463 as of Nov’15th), to have provisional confidence the m/t trend has been broken.
At some point… the music stops. Right now, that doesn’t appear likely until the flip side of Jan’1st 2025. The patient… yours truly included, will remain so.
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