May 1, 2024
By Steve Blumenthal
“All of the following factors appear to be inflationary: ongoing fiscal spending, remilitarization of the world, restructuring of global trade, capital needs of the green economy and possibly higher energy costs due to a lack of needed investment.”
– Jamie Dimon, CEO of JPMorgan Chase
William White painted a mental picture. We are walking down a path, and it is narrowing. If we fall off to the left, we’ll experience deflation. If we fall off to the right, we’ll experience inflation.
I’ve spent the last two weeks watching industry titans present at the 2024 SIC. Soft or hard on the economy? Bullish or bearish on the direction of interest rates? The stock market? A famous quote is attributed to many people, from the Nobel prize-winning Quantum physicist Niels Bohr to legendary baseball player Yogi Berra: “It is difficult to make predictions, especially about the future.” A good place for us to start today.
David Rosenberg, Dr. Lacy Hunt, and Danielle Di Martino Booth are firmly in the recession camp. Jim Bianco, Luis Vincent-Gave, and Felix Zulauf are in the inflation camp. At the start of the year, a loud lone voice, active in the media, called for “no landing.” It was Jim Bianco. Not soft, not hard, but no landing, as in no soft or hard recession. The consensus was calling for six rate cuts in 2024. He continues to predict rising inflation and an ok economy.
David Rosenberg said the economy has mostly stayed the same since January 2020, but interest rates are much higher. He cited the 10-year Treasury yield at 4.5% now vs 1.8% then.
Future political leadership and central bank leadership still need to be discovered. But we must factor in the geopolitical challenges of a multipolar world, as Felix Zulauf calls it. “You better be bullish on Treasury bonds,” he said, adding that the Fed would cut rates by 500 basis points if we get the hard landing. Even if we don’t have a recession, the Fed funds rate will still be too high. It is above the theoretical neutral rate (i.e., the interest rate if there is no unemployment or inflation). Rosenberg said it is an “easy call” to invest in bonds. “It’s just a matter of waiting until the cuts come. The longer the Fed waits, the more cuts will be made.” Robert Huebscher, founder of Advisor Perspectives and vice chairman of VettaFi, wrote a good summary here.
Rosenberg said that if 10-year yields go up 100 basis points this year, investors will lose only 3%. But if rates go down by that same amount, investors will gain 12%. That is true; bonds are far more attractive than in January 2020.
Huebscher said that last year, Rosenberg, at the same conference, forecasted a 99% probability of a “hard” recession and that earnings and multiple contractions would drive equity prices down 30%. There was no recession, and the S&P 500 is up 22.6% over the last year. Further, in his article last year, he noted that the central predictions in his keynotes in the previous four years have been incorrect.
Lacy has been steadfast in his bearish view of the economy. In his recent quarterly letter, he said some people believe inflation will stay with us due to the large fiscal deficits and fiscal policy will dominate monetary policy – meaning the Fed “will be incapable of containing inflation at a pace close to its target.” He doesn’t see the Fed abandoning its inflation mandate and noted that the Fed Chair recently said there is “no wiggle room” on the 2% target. He concluded, “The vast deficits will have the perverse impact of restraining growth and dis-inflate the economy.” He believes inflation will undershoot the Fed’s 2% target, and the unemployment rate will increase. He reminded us that inflation and unemployment are lagging indicators that occur after, not before, recessions end. He remains bullish on long-term Treasury bonds, expecting yields to decline meaningfully.
I find merit in both arguments and realize it is a bold move to bet against Lacy, but what is different from anything we’ve seen in the last 75 years is that we have a rising power challenging an existing power. Generally, geopolitics take a back seat in the investment markets; today, they sit in the front seat, making inflation a persistent foe. I find merit in both arguments but lean toward the inflationary higher-for-longer outcome. Could the 10-year Treasury yield drop to 3%? Yes. Could it rise to 8% before we hit the next crisis? Yes. Could we see both? Yes.
It is hard to reconcile the different fundamental views. The challenge is that getting it right is mandatory regarding the impact on your wealth. There is a way to deal with this. If the market technicals don’t align with your fundamental view, follow the technicals, and if they do align with your view, follow the technicals. We all know that if yields go down, bond prices go up; if yields go up, bond prices go down. That Rosenberg miss was costly. It wasn’t a tiny decline in long-term bond prices since January 2020, as rates went from 1.8% to 4.5%, it was a 60% crash (as seen in the third chart below). Did he trade around the yield moves? I don’t know. But his fundamental view on recession was wrong, and Bianco’s was correct. I believed we’d have a recession in 2023, and rates would meaningfully decline. I was wrong, and the technicals were correct.
I favor two technical analysis tools: one that is short-term in its signaling and the other that is intermediate-term. I watch them both every day. They’ve done a good job of keeping me on the right side of the interest rate move.
The first is the 10-year Treasury Yield’s Weekly MACD, and the second is The Zweig Bond Model. Ned Davis was a good friend of Marty Zweig, and they created the model in the mid-1980s. These are two of my most important indicators.
10-year Treasury Yield’s Weekly MACD
Trend signals occur when the lines in the lower section of the chart cross. The red arrows indicate a rising trend in interest rates, and the green arrows indicate a declining trend in interest rates.
Source: StockCharts.com and CMG Investment Research
The Zweig Bond Model
You can track this yourself. The model rules are in the upper left-hand section of the chart. The current model is -4 (indicated in the center section). The yellow highlight in the lower right shows the current signal. Some twenty or so years ago, I asked NDR to create the model for me. Ned had written about it in one of his missives, but NDR didn’t have a live model on their platform. I spent some money to have the research work done, and while, like all things in this business, it’s not perfect, it has helped me over the years.
Source: Ned Davis Research
Getting the direction of interest rates correct is the most critical thing we investors can do. Interest rates follow inflation; higher inflation means higher interest rates and higher costs. It affects everything. William White’s path is narrowing. Thinning path indeed: Fall left deflation, fall right inflation. Keep a close eye on the above two charts. Both are currently signaling higher interest rates.
The Impact on Bonds
I noted the interest rate move since January 2020 in the comments above. Here is a look at the price movement of the popular Vanguard Extended Duration Treasury ETF. The red circle highlights the decline in price from the 2020 high to the low made late last year. The green circle showed the gain in price when interest rates dropped toward zero percent during the pandemic, and bonds gained. By the way, Zulauf sees an excellent potential bond trade setting up. A potential move in the 10-year Treasury down towards 3%. That will likely mean recession and can’t be ruled out. If the Fed and fiscal policymakers turn the sugar machine back on high again, the next round of inflation will follow. That’s my base case. As you can see, nothing moves in a streight line. Zulauf uses a form of the weekly MACD as a trend signal.
The salient point is that getting the interest rate direction right matters on many fronts!
Source: StockCharts.com and CMG Investment Research
Last week, I summarized Felix Zulauf’s position on the markets and the economy. I also subscribe to his research service. He sees persistent inflation and the potential for the 10-year Treasury yield to rise to the high single digits. I agree with the arguments that demographics and debt are deflationary, and yes, we are facing a debt crisis; however, wars are inflationary, and it is clear we are moving to what is termed a multi-polar world from the U.S. and its allies-dominated world.
Generally, geopolitics are not crucial to financial markets. When you have short-term events, markets wobble, and shortly after, they return to where they were. Today, geopolitical events MATTER. The peace dividend is gone, and we are at war. Wars are inflationary.
Last night, I left the office around 6:30 and drove to Stonewall to practice chipping and putting. No one was there; it was warm, and the smell of spring was in the air. I plugged my headphones in and listened to Luis-Vincent Gave’s presentation. His perspective was unique and got me thinking. Put him in the inflation camp. I will share my thoughts with you next week.
Grab your coffee and find your favorite chair. Dr. Pippa Malmgren believes we are already in WWIII. It’s a different kind of war. She said there are hard wars in soft places (think satellites, cyber, trade, etc.) and soft wars in hard places (Ukraine, Gaza, Iran, North Korea). My friend Ed D’Agustino did a masterful job interviewing Dr. Pippa and General David H. Petraeus and emceeing the entire conference. To put this more succinctly, General Petraeus put it this way, “We are in an era of renewed great power rivalries, and that is very significant because just 11 years ago, after leaving government and joining KKR and establishing the KKR Global Institute, we were probably in an era that could be described as one of benign globalization. That was a period where geopolitics were not as central to all that we are doing, particularly in the investment world. Barriers to trade, investment, capital flows, and even data flows were all being reduced, and global trade was going up at what almost seemed like a 45-degree angle. Economics drove geopolitics at that point in time, by and large. It’s completely the opposite now. We are in an era of renewed great power rivalries and geopolitics is very much driving economics and investment and so forth. The barriers that I talked about to trade investment capital flows, and data flows have been going up instead of down, and the prospect is that they’re going to go up even more.”
On My Radar:
- WWIII – Dr. Pippa Malmgren and General H. David Petraeus
- Market Returns Since 2000
- Random Tweets
- Personal Note: Even Messi Makes Mistakes
- Trade Signals: May 1, 2024
See Important Disclosures at the bottom of this page. Reminder: This is not a recommendation to buy or sell any security. My views may change at any time. The information is for discussion purposes only.
WWIII – Dr. Pippa Malmgren and General H. David Petraeus
You can find my short summary of Felix Zulauf’s recent presentation, posted in last week’s OMR here. We are in a different ball game with the China – U.S. challenge the dominating issue. Let’s take a deeper dive this week.
Dr. Pippa Malmgren
Dr. Pippa Malmgren pens an excellent piece she posts to her subscribers on Substack. I recently subscribed. It’s just $200 per year. She writes beautifully and will keep us posted.
Here is a quick summary from her April 29, 2024 post:
There is a surreal disconnect between what is going on in geopolitics and what is being discussed about geopolitics. The military establishment now speaks openly about the adversary being a “near” competitor rather than the small, ill-equipped opponents that the US faced in the past. This is weird, given that the practical issue is that Russia is threatening to deploy and use nuclear weapons on Earth and in space, which means they are a peer, not a near-peer. Also, those pesky non-peers always end up forcing the US to withdraw or concede defeat: Iraq, Afghanistan, Houthis, Hamas. People in the financial markets and the military alike spend time comparing military capability, strategy, and tactics, assuming Russia or China can be easily defeated in a tank-to-tank or ship-to-ship scenario. China and Russia know they cannot defeat the US using traditional military means. Their strategy is simple. Force the US to deploy military assets, which will bleed America dry of cash at a time when the US budget deficit is already overwhelmingly too large and perhaps unfixable. Create inflation by any means because the US is very politically sensitive to inflation, especially in the run-up to an important election. Open multiple geopolitical fronts because the US can’t handle a multi-front conflict very well.
This is geopolitical Jiu-Jitsu. Instead of trying to beat the US as if in a boxing match, the idea is to rely on leverage to force the Americans and NATO to respond in ways that are harmful to themselves. By arming and supporting smaller, more aggressive militants, such as the Houthis, Hamas, and Iran, China and Russia compel the US to place the US Navy on high alert in the Middle East, call it Defcon 3, and force them to remain at that level of readiness for as long as possible. Why? Because that costs a bomb. China then sends a few warships to Japan and Taiwan and forces the US to do the same in the Pacific. Why, because that too costs a bomb. Keep this up by having proxies, including Iran, lobbing bombs (the ones that don’t do that much damage) and threatening to escalate. Then, the US doesn’t just stand up military assets but is forced to remain deployed in a state of high alert. The sound of this geopolitical Jiu-Jitsu is Cha-ching. You can hear the cash draining away.
Great writing, scary stuff. Eyes open!
Here’s a concise summary of the key points regarding geopolitical risks from Dr. Pippa Malmgren’s presentation at the 2024 SIC conference:
- Dr. Malmgren described the current global conflicts as a form of World War III, emphasizing that this war is distinct from previous world wars due to its technological nature and lack of widespread direct human casualty.
- She highlighted that the conflict is predominantly occurring in “cold places” like space, the high seas, and remote areas like the Arctic, making it largely invisible to traditional media.
- Dr. Malmgren argued that these conflicts are global, linking disparate regional conflicts in places like Ukraine and the Middle East as part of a broader geopolitical struggle involving the major – U.S., Russia, and China.
- She suggested that these nations are attempting to force the U.S. to negotiate under pressure, particularly concerning the situation in Ukraine, which she believes is being manipulated to affect U.S. domestic politics, especially presidential elections.
- The presentation also touched on the strategic economic and military positioning by Russia and China, noting that these actions are designed to stretch U.S. resources and influence global commodity flows, especially in energy and raw materials.
- Dr. Malmgren expressed concern about the potential for cyberattacks targeting U.S. infrastructure as part of this broader strategy of geopolitical warfare, emphasizing the vulnerability of global shipping and port systems.
- Lastly, she discussed the implications of these geopolitical tensions for global economic stability, highlighting the intertwined nature of political and economic strategies in shaping international relations and conflict.
- Malmgren noted a growing disinterest among Americans, especially the youth, in being involved in global geopolitical conflicts.
- She highlighted the increasing unease in Europe about potential conscription, reflecting a general wariness towards military conflicts among the younger generation.
- Malmgren discussed her move back to Washington, D.C., due to her belief that the upcoming U.S. presidential race would be historically significant, not merely due to traditional candidates but because of the potential disruption from a third-party candidate, Robert Kennedy.
- She mentioned a significant shift in the U.S. political landscape, with a substantial number of Americans identifying as independents, which she believes could dramatically impact traditional electoral politics.
- Malmgren suggested that the rise of independents and the potential candidacy of Robert Kennedy could lead to a contingent election where the House of Representatives might decide the presidency, a scenario not seen since the early 1800s.
- She expressed concerns about a highly contested election outcome, echoing sentiments that the results might not be universally accepted, potentially leading to unrest.
She concluded discussion of several geopolitical risks and potential futures:
- Peace Dividend Possibility: Malmgren discussed the potential for a significant peace dividend similar to what occurred after the fall of the Berlin Wall, suggesting that a resolution in Ukraine could trigger a similar economic and innovation boom. She emphasized the importance of preparing for this potential outcome despite current fears and uncertainties.
- Innovation vs. Inflation: She proposed that in the context of a peace dividend, innovation would likely outpace inflation, leading to economic growth and new opportunities. This optimism contrasts with the dark tone of the geopolitical realities she discussed earlier.
- Concerns About Chinese Actions: Malmgren responded to a question about young male Chinese crossing the U.S. southern border by connecting it to broader geopolitical strategies, including potential attacks on U.S. critical infrastructure. She implied that such movements could be strategic rather than random.
- Global Influence and Espionage: The discussion covered global concerns about China’s activities, including setting up police stations in Canada and infiltrating governments. Malmgren highlighted ongoing global legal actions against Chinese nationals for espionage and theft of intellectual property.
- Reactivation of SMERSH: She mentioned Russian President Putin’s announcement about reactivating SMERSH, a Stalin-era organization aimed at assassinations and rooting out traitors, suggesting it indicates a readiness for more direct and violent forms of conflict.
- Invisible Wars and Modern Espionage: Malmgren likened current geopolitical tensions and espionage to the Cold War-era invisible wars, suggesting that much of the conflict and strategic maneuvers are not visible to the public but are nonetheless significant and impactful.
These points collectively emphasize the complex and often hidden nature of modern geopolitical conflicts, the potential for significant shifts in global stability, and the importance of being prepared for both negative and positive outcomes.
That concludes my notes from Dr. Malmgren’s presentation.
General David H. Petraeus
General Petraeus served in the US Army for 37 years and held six consecutive general officer commands. He also served as director of the Central Intelligence Agency of the United States and recently coauthored Conflict, an excellent book that became a New York Times bestseller. Today, he’s a partner at KKR and chairman of the KKR Global Institute.
- General David Petraeus discussed the increasing trends of protectionism and industrial policies, leading to what he terms “slowbalization,” characterized by fluctuating globalization and rising regionalization.
- He emphasized the significance of geopolitics in the current era, highlighting the foresight of Henry Kravis and George Roberts, co-founders and co-CEOs of KKR, who established a global institute 11 years ago to analyze and mitigate geopolitical risks during investment diligence processes.
- The creation of the Global Institute at KKR has been influential, setting a standard in the industry that other companies, including Goldman Sachs with its similarly named Goldman Global Institute, have followed.
- Petraeus expressed a view from a Western perspective, suggesting that the U.S. and its allies face a multitude of complex challenges not seen since World War II, with a particular focus on managing relations with China and addressing threats from Russia, North Korea, and Iran.
- He also mentioned ongoing global issues like Islamist extremism, cybersecurity threats from various actors, climate change impacts, domestic populism, and human migration, all adding to the complexity of global geopolitics.
- The overall message stressed the importance of understanding and managing geopolitical risks in business, particularly in evaluating potential company acquisitions or investments.
- Petraeus expressed high regard for a female colleague, agreeing with her view that certain countries are trying to make the world safe for their governance models, which contrast with Western values like democracy and human rights. This includes China, Russia, Iran, and North Korea.
- He described a global competition where these countries propagate their governance models, attractive to other nations with similar authoritarian inclinations.
- Petraeus highlighted the “weaponization of everything” theme, indicating that various elements, including data and traditional defense mechanisms, are being weaponized.
- He discussed the need for diverse manufacturing and assembly locations, noting Apple’s move to establish plants in India and the concept of “friendshoring” and “nearshoring” to rely on more trustworthy partners.
- Petraeus mentioned significant increases in defense spending by Japan and Germany, reflecting broader security concerns and opportunities for businesses.
- He discussed the rocky future of US-China trade relations, anticipating more protectionism and industrial policies in the U.S. regardless of electoral outcomes.
- Petraeus emphasized the mutual dependencies between the U.S. and China, highlighting their significant trade relationships and China’s reliance on U.S. agricultural products.
- He expressed hope for a mutually beneficial relationship with China but noted challenges due to Beijing’s recent policy decisions.
- Regarding Ukraine, Petraeus believes it will stabilize its defense lines and continue to challenge Russian forces, indicating a long and difficult conflict ahead without realistic prospects for negotiations.
- He underscored the importance of supporting Ukraine as part of a broader strategy to maintain deterrence, particularly in the context of U.S. and Western relations with China.
- Petraeus linked global events, like the withdrawal from Afghanistan and the Syrian crisis, to perceptions of U.S. resolve, stressing the interconnected nature of global military and diplomatic actions.
- He doesn’t believe Putin would stop his expansion efforts if Russia were to win Ukraine.
Ed D’Agostino’s ending question to the interview was outstanding and I loved the General’s answer:
Ed asked, ” General, I’m going to take the liberty of asking you the last question. You have a positive outlook. You seem generally optimistic. You’re pleasant. You’re kind. Knowing what you know, and I suspect you’ve heard things that most US citizens can’t even imagine, given your various roles throughout your career… how do you compartmentalize or just stay positive when you are sometimes surrounded by so much negativity or outright threats? How do you manage that?”
General David Petraeus answered, “Well, first of all, I am [by] nature actually a qualified optimist—again, a thoughtful, positive outlook on life, but it’s founded on enormous belief in our young people in particular. This is why I always teach. I’m the Kissinger Fellow at Yale, where I lead a graduate seminar in great power competition. I’m an investor in startups, about 28 or so of them, many multiple rounds. And I do it because I get inspired by great leaders who have impressive big ideas, and appear to have the ability to scale those, and to lead an organization as it grows around that big idea. I believe in the inherent attractiveness of our system, of our institutions, however flawed they may be, which is why we have Silicon Valley, Silicon Alley in New York. It’s why we had the energy revolution in the US. Only in the US has there been the kind of revolution that we experienced here, which saw us go from what was supposedly peak oil production to now nearly three times that. And it’s because of our system, our people, innovativeness, creativity, and all the rest—despite, again,
all the daily challenges and travails and so forth. So at heart, that, I think, is what provides a degree of grounding while also recognizing that the world has gotten more challenging. It is, in certain respects, scarier, if you will, but we have to be clear-eyed about that. Again, you have to deal with the world the way that it is, not the way you’d like it to be, even as you may try to guide, to influence, to get it in a certain direction. So at the end of the day, again… and I felt this way on the battlefields, although there I would say, I’m neither an optimist nor a pessimist. I’m a realist. And the reality in Iraq is that it’s all hard all the time, but hard is not hopeless. I think that’s the way you have to approach it. Now, you can’t be panglossian about this. If it’s really bad, you have to acknowledge it’s really bad. We had really bad days during the surge in Iraq. But then you have to have the fortitude to press on. You have to pick the rucksack back up and put one foot in front of the other, knowing that the strategy is correct and that it is going to produce results. And it did in the surge, despite going through the period that I predicted to Congress, I said, “It is going to get much harder before it gets easier. We’re taking areas back from bad guys, and they’re going to fight us for it.” And they did, and we defeated them and drove violence down by nearly 90% just in the 18 months of the surge. And it kept going down for the subsequent three and a half years. So again, I think you have to have faith in what it is you’re doing, in the strategy you’re pursuing, while also certainly always questioning it, welcoming constructive feedback, keep iterating, keeping people inside the tent that are willing to tell you that your idea may not be as powerful as you think it is. But at the end of the day, our system’s a pretty extraordinary one, again, for all of the flaws, the turmoil, the politics on Capitol Hill, and everything else.”
This is not a recommendation to buy or sell any security. It is for educational discussion purposes only. Opinions are subject to change. Consult your advisor.
Market Returns Since 2000
I’m sharing the following few charts as a simple reminder of the time markets can spend underwater. I came across them this week. Note how it took almost 17 years for the Nasdaq to recover from the 2000-2002 and then 2008-2009 bear markets. The charts look at the nominal prices of the Dow, S&P 500, and NASDAQ, excluding dividends, so the time period is a little shorter.
Source: AdvisorPerspectives
This next chart looks at the “real” return, which means after inflation is taken into consideration. If inflation is likely to be with us for the balance of the decade, especially if the major developed countries continue to print and spend and to print and monetize the debt, we all lose to inflation. Returns should be considered on a “real” basis. Inflation is awful!
You can find the full article on returns since 2000 at AdvisorPerspectives.com.
Buffett Indicator: The Latest Data
Just a quick reminder that the stock market remains overvalued.
From AdvisorPerspectives, “With the Q1 GDP advance estimate and the April close data, we now have an updated look at the popular “Buffett Indicator” — the ratio of corporate equities to GDP. The current reading is 204.7%, up from 184.4% the previous quarter. The Buffett Indicator, also known as Market Capitalization to GDP Ratio is a long-term valuation indicator for stocks that has become popular in recent years, thanks to Warren Buffett. Back in 2001, he remarked in a Fortune Magazine interview that “it is probably the best single measure of where valuations stand at any given moment.” It is a measure of the total market value of all publicly-traded stocks in a country divided by the country’s GDP and can be used as a way to assess whether the country’s stock market is undervalued, fair valued, or overvalued.”
Source: AdvisorPerspectives
This is not a recommendation to buy or sell any security. It is for educational discussion purposes only. Opinions are subject to change. Consult your advisor.
Random Tweet Market Returns Since 2000
I “like” and “retweet” posts I find interesting. I enjoy X because I can easily follow people I like to keep On My Radar.
You can follow me on X (formerly Twitter) @SBlumenthalCMG.
Not a recommendation to buy or sell any security. For discussion purposes only. Current viewpoints are subject to change.
Personal Note: Even Messi Makes Mistakes
“Keep your chin up, chest out, we all make mistakes.”
Stepson Connor graduates from Penn State on Sunday. Grandma Pat is flying up from Florida, and Susan, Pat, and our family will travel to Happy Valley to celebrate our boy “C.” He will move to Ohio State country in June to start an agriculture job with Cargill. Not that he needs any more Penn State swag; I’ll hit the local stores. However, he should be careful when wearing it in the land of scarlet and grey. As you probably know, I’m an over-the-top Penn State fan. And I embrace fans from other schools -the nice ones, anyway. Some can be, well, not so kind of heart. The same is true everywhere, including at Penn State. I suspect there are a few with equally strong opinions in Ohio. Oh, I love the college rivalries, and Ohio State has had our number for years (in football). Keep your head on a swivel, Connor, and “Fight on State… Rore Lions Rore.”
Golf with friends is planned for tomorrow, though the weather looks iffy. The right move is to get the rest of the backyard furniture out. There is much to do around the house. I’ll shoot for both.
Susan and I have been enjoying morning coffee on our back patio. Everything is in full bloom; the birds sing, and we are happy.
Yesterday, she shared another short video clip with me via Instagram. Make sure you unmute.
Click on the photo watch.
Chin up, chest out. Ever forward.
Hope you are doing something fun for yourself!
Thanks for reading.
With kind regards,
Steve
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– Charlie Munger
Notable this week:
The 10-year Treasury yield is nearing 4.75%. The Zweig Bond Model and Weekly MACD sell signals weeks ago were prescient, the Daily and Weekly MACD for the S&P 500 Index remains in bear market trend signals, and Gold remains in a bull trend signal.
The dashboard of indicators and charts with explanations is updated. Notable is the Weekly MACD Bear Trend Signal on the S&P 500 Index.
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This document is prepared by CMG Capital Management Group, Inc. (“CMG”) and is circulated for informational and educational purposes only. There is no consideration given to the specific investment needs, objectives, or tolerances of any of the recipients. Additionally, CMG’s actual investment positions may, and often will, vary from its conclusions discussed herein based on any number of factors, such as client investment restrictions, portfolio rebalancing, and transaction costs, among others. Recipients should consult their own advisors, including tax advisors, before making any investment decision. This material is for informational and educational purposes only and is not an offer to sell or the solicitation of an offer to buy the securities or other instruments mentioned. This material does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors which are necessary considerations before making any investment decision. Investors should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, where appropriate, seek professional advice, including legal, tax, accounting, investment, or other advice. The views expressed herein are solely those of Steve Blumenthal as of the date of this report and are subject to change without notice.
Investing involves risk.
This letter may contain forward-looking statements relating to the objectives, opportunities, and future performance of the various investment markets, indices, and investments. Forward-looking statements may be identified by the use of such words as; “believe,” anticipate,” “planned,” “potential,” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular market, index, investment, or investment strategy. All are subject to various factors, including, but not limited to, general and local economic conditions, changing levels of competition within certain industries and markets, changes in legislation or regulation, Federal Reserve policy, and other economic, competitive, governmental, regulatory, and technological factors affecting markets, indices, investments, investment strategy and portfolio positioning that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties, and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Investors are cautioned not to place undue reliance on any forward-looking statements or examples. All statements made herein speak only as of the date that they were made. Investing is inherently risky and all investing involves the potential risk of loss.
Past performance does not guarantee or indicate future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by CMG), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from CMG. Please remember to contact CMG, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. CMG is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice.
No portion of the content should be construed as an offer or solicitation for the purchase or sale of any security. References to specific securities, investment programs or funds are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell such securities.
This presentation does not discuss, directly or indirectly, the amount of the profits or losses realized or unrealized, by any CMG client from any specific funds or securities. Please note: In the event that CMG references performance results for an actual CMG portfolio, the results are reported net of advisory fees and inclusive of dividends. The performance referenced is that as determined and/or provided directly by the referenced funds and/or publishers, has not been independently verified, and does not reflect the performance of any specific CMG client. CMG clients may have experienced materially different performance based upon various factors during the corresponding time periods. See in links provided citing limitations of hypothetical back-tested information. Past performance cannot predict or guarantee future performance. Not a recommendation to buy or sell. Please talk to your advisor.
Information herein has been obtained from sources believed to be reliable, but we do not warrant its accuracy. This document is general communication and is provided for informational and/or educational purposes only. None of the content should be viewed as a suggestion that you take or refrain from taking any action nor as a recommendation for any specific investment product, strategy, or other such purposes.
In a rising interest rate environment, the value of fixed-income securities generally declines, and conversely, in a falling interest rate environment, the value of fixed-income securities generally increases. High-yield securities may be subject to heightened market, interest rate, or credit risk and should not be purchased solely because of the stated yield. Ratings are measured on a scale that ranges from AAA or Aaa (highest) to D or C (lowest). Investment-grade investments are those rated from highest down to BBB- or Baa3.
NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE.
Certain information contained herein has been obtained from third-party sources believed to be reliable, but we cannot guarantee its accuracy or completeness.
In the event that there has been a change in an individual’s investment objective or financial situation, he/she is encouraged to consult with his/her investment professional.
Written Disclosure Statement. CMG is an SEC-registered investment adviser located in Malvern, Pennsylvania. Stephen B. Blumenthal is CMG’s founder and CEO. Please note: The above views are those of CMG and its CEO, Stephen Blumenthal, and do not reflect those of any sub-advisor that CMG may engage to manage any CMG strategy, or exclusively determines any internal strategy employed by CMG. A copy of CMG’s current written disclosure statement discussing advisory services and fees is available upon request or via CMG’s internet web site at www.cmgwealth.com/disclosures. CMG is committed to protecting your personal information. Click here to review CMG’s privacy policies.