Here's the Deal - October 20, 2024

Economy: In Slowdown

Market Cycle: Bullish

_{Week 42 of 52 for 2024: 81% of the way through 2024}

Weekly Note:

It was a relatively quiet week for the economy, and that's actually a good sign. Calm economies tend to be better for most people. Major slowdowns typically start when the market gets overly optimistic, but we’re not at that stage yet. If we see another quarter or two of strong GDP growth and rising markets, we might begin to approach that point.

For now, the spotlight is on the upcoming elections and earnings season. Nothing that happened this past week has really altered the economy’s current path. In fact, many companies are reporting earnings that are better than expected, albeit on low expectations.

We did however get another 2-year anniversary this week after last week’s 2-year birthday of the current Bull Market. As this gem of a consensus was published on Oct 17, 2022.

Oops.

It’s fun to make fun of things like this, because some of the people that made these predictions and did not admit they were wrong are straight up lying to you. They are either intentionally doing so to separate you from your assets when they are at there lowest price, or they are merely pretending to be experts but are not even good enough analysts to know when their thesis becomes wrong. Either way, their opinions are not worth your most important asset, you’re time.

Even though the economy is still feeling the effects of the pandemic responses and are more challenging to navigate compared to 2013-2019, that doesn't mean it's shrinking. And let's be honest, it’s nowhere near the most difficult economic period we've seen in the last 40 years, let alone the past 55.

It’s common for the economy and markets to show strength during the early stages of an economic slowdown. However, there are growing signs that the current credit cycle is starting to turn. One strong indicator is how well treasuries and gold typically perform leading up to a recession. For example, gold is currently up about 35%, and treasuries are up around 12%. At the same time, stock market indices are also up by roughly 35%, creating an interesting dynamic.

So, it’s wise to start preparing for a potential recession. You likely have about a year to get ready, but there's no harm in being prepared early by building up your cash reserves. If a recession doesn’t happen, you’ll still be in a great position to redeploy your cash into the economy at the best possible time for the most benefit.

While it was a boring week on the economic front, the action was decisively in the stock markets. And boy-oh-boy, did they ever deliver.

Top Economic Stories of the Week:

Most Important Data Drops from the Past Week:

This Week in Markets

Here’s the thing about raging Bull Markets: they are notoriously difficult to jump into once they’ve gained momentum. Why? Because they rarely pull back as much or as often as most anticipate. Instead, the market tends to keep climbing when people expect it to pause or correct. And lately, that’s exactly what we’ve been seeing unfold.

We are now reaching a point in this Bull Market where those less experienced or unaware of market dynamics are starting to label seasoned investors who’ve been bullish for the past two years as "perma-bulls." Let me clarify: that’s not the case. We simply recognized the signals the market was sending and adjusted our positions accordingly around mid-to-late 2022. When the market shifts and signals it's time to turn bearish, we will do so at that time. Just as every consistently profitable trader and investor has done for decades and centuries.

For now, however, the indicators continue to support the presence of an ongoing bull market in stocks. This week brought even more confirmation of that upward momentum.

Remember when I said some stocks and commodities look primed for 2-4x’s gains and you thought I was crazy?

Come on, be honest. That had to sound insane, right? I mean, if I didn’t spend the past 4 ½ years devoted to piecing together all of my experiences about the true nature of markets and the economy, I would’ve thought it sounded batty as well.

However, markets went nuclear this week. Literally. As nuclear energy, exploded to the upside on massive volume this week.

While space exploration names also continued their moves higher, in what is more than likely new long-term uptrends for both sectors. I pointed some of these names out a few weeks ago in Here’s the Deal.

It was the kind of week that makes you fall in love with trading and investing.

Unfortunately, I was working on a post about how the nuclear sector was setting up and how to take advantage. But alas, the markets decided they didn’t want to wait. Fortunately, I’ve been talking about LTBR and SMR for months.

These are the types of moves you expect to see, in stocks like these, at this moment in time. The good news is that there will be others, so be on the look out for a post on small-cap/growth stocks this week.

You also want to keep your eye on Bitcoin and Solana here as crypto is putting in those nice round bottoms on the weekly charts that you love to see.

Finally, I’d be remiss if I didn’t also wish a Happy Anniversary to the Black Monday stock market crash on October 19th, 1987. On that day the Dow fell 22.6% while the S&P 500 Index dropped 20.4%. My most vivid memories of it was the Minnesota Twins en route to winning their first World Series, because I was 7-years old at the time.

Which reminds me of something Kirby Puckett told the ‘91 Twins team en route to their ‘91 WS Championship.

“Guys, I just have one announcement to make: You guys should jump on my back tonight, I’m going to carry us.”

To which I say to you; Jump on my back, I’m going to guide you through the rest of this credit cycle and into the next. You’re days of wondering what is happening in the economy and missing out on uptrends in stock markets are over.

It’s an amazing time to be alive. Don’t waste it by actively searching for things that piss you off.

The Week Ahead

Economic Data to watch:

Earnings to watch:

WTF of the Week

What SpaceX accomplished this week by catching a rocket of this size is absolutely insane. It’s almost as crazy as the people who continue to bet against Elon Musk or do not give him credit for being the greatest innovator of our time. More proof that current political discourse is nothing but a mind virus.

On a side note: Andrew here is an Arizona guy that captures and sells some incredible photos of the galaxy and now SpaceX launches. I’ve been following him for several months and his content is incredible.

Quote of the Week

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