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Good morning, The U.S. dropped bunker busters on an ammunition depot in Isfahan. Israel struck military sites in Tehran and near the Caspian Sea. Iran hit a Kuwaiti oil tanker near Dubai, causing a fire. And then the Wall Street Journal reported that Trump told aides he’s willing to end the war without reopening Hormuz. Futures are gapping up about 1% this morning on that WSJ report. Oil is pulling back from overnight highs but is still elevated. WTI at $103.69, Brent at $107.59. The number that caught my eye this morning is Oman’s crude official selling price for May... it nearly doubled from April. $124.05 versus $68.15. That’s not the futures market guessing. That’s the physical market telling you this disruption is real and it’s not going away anytime soon. Goldman put out a note saying gold could hit $5,400 by year-end on central bank buying of 60 tonnes a month. Gold is already at $4,608. Yesterday was rough in the places that matter. The tech sector death-crossed... the 50-day moving average crossed below the 200-day. The last time tech had five consecutive losing months was September 2002. This is the worst quarter for U.S. stocks in nearly four years. Powell said there’s “little chance of contagion” in private credit and that inflation is contained. Meanwhile, Ares is capping redemptions, Apollo did the same, and Morgan Stanley is warning about 8% default rates. But sure... contained. On the screener, energy still owns the entire top of the board. APA, CF Industries, Devon, Phillips 66, Marathon, Halliburton, Valero, Exxon... all strong acceleration. At the bottom, financials are getting destroyed. Visa and Mastercard are dead last. Berkshire is crashing. The war is the only trade that works. After the Morning Brrr, we shift to Money Printer Pro... full breakout and breakdown tables, the Tesla short update, and what the overnight oil spike means for today’s open. Full transcript at the bottom if you’d rather read than watch. Stay positive, Garrett Baldwin Transcript I hope you’re having a good day. March 31st, last day of the quarter. Let’s just dive right into it. The market is doing what the market does. We’re up a little bit this morning. We’re going to talk about the stocks that are in breakout mode versus breakdown mode, we’ll talk about futures and ongoing concerns about the war. All right, let’s do it. Futures are up this morning, 1%. The IRGC saying that Hormuz is theirs. Trump saying he’s willing to end the war without reopening Hormuz. We’ll see what happens there. But the IRGC immediately said it is under their control and any movement will be hit with missiles. Overnight, the U.S. dropped bunker busters on Isfahan. Israel struck Tehran and the Caspian Sea sites. Iran hit a Kuwaiti tanker near Dubai. Saudi intercepted 10 drones, and there was a power outage in east Tehran. Iran’s desalination plant on Qeshm Island was destroyed. Oil pulling back from overnight highs but still elevated. WTI sitting at $103, Brent at $107. We’ll talk about what’s going on with Omani crude as well. And the tech sector death crossed yesterday. This is the worst quarter in four years. Once again, this is a reminder that we are on the backside of the liquidity cycle. If you’ve been following us, we’ve been talking about this and the likelihood that this weakness will persist, that we’re going to see lower highs and lower lows along the way, coming on the backside of the peak of that cycle according to the Global Liquidity Index by CrossBorder Capital back at the end of the third quarter. This morning, however, the market wants to believe in de-escalation. The VIX fell to 26.75, and Goldman has an update on gold. You can see across the board, roughly $5,450 on the S&P 500, the Dow at $41,926. Gold at $4,608. Goldman raising its price target to about $5,400 by year end. I’m on board with that. I just continue to advocate that you sell spreads to the downside on miners and look to take advantage if the stocks pull back — companies like Wheaton or any of the royalty companies like Franco-Nevada. You sell spreads. You look for about an 80% probability of profit, a 20% return, and you’re willing to take delivery of that stock. However, if the stock moves higher or trades sideways, the value of that contract will go down. You could buy it back. Simple way to make money on that. The dollar at 104.25. Obviously we’re keeping a close eye on that. There is a dollar shortage internationally right now as nations scramble to obtain dollars to then turn around and get access to oil that is priced in dollars. Bitcoin at $66,800. So we dropped bunker busters last night. Two thousand pound penetrator munitions. Israel struck military sites near the Caspian Sea. Trump has threatened to blow up electricity plants, oil facilities, and possibly desalination infrastructure if Iran doesn’t open up the Strait. He said he’d be willing to end the hostilities even if Hormuz stays shut. Iran’s parliament has approved tolls on ships transiting the Strait of Hormuz. Italy denied the United States use of a naval base. Russia warning that the crisis could spill over into a wider conflict. WTI at $103. Brent at $107.59. Oman’s crude official selling price for May nearly doubled from April — $124.05 against the $68 level that we saw back in early February. That’s the physical market saying this is not going away. And again, we are deeply concerned about the infrastructure in the region. It’s going to take a very long time to rebuild and reopen this. That is why we’re keeping such a close eye on the midstream here in the United States. Once again, shipping companies, companies that are moving things through pipelines, things that are being stored. Kinder Morgan is a perfect example. The IRGC saying that Hormuz is fully under their control and any movement will be hit with missiles and drones. The markets want to believe in peace, but the physical market for crude is pricing for war. The tech death cross yesterday. This is the fifth consecutive losing month in the tech sector, and it’s not shocking given the fact that we are on the backside of the liquidity cycle. Higher beta stocks, all of the stocks tied up in the Mag 7, all of those AI names — all under pressure. The sector’s 50-day moving average crossed below its 200-day moving average on Monday. That is what is considered the death cross. The last time we had five consecutive losing months was September 2022. You will recall, something broke. It was the British economy experiencing the gilt crisis. That was where we were seeing pension systems dumping bonds, leading to higher yields, leading to more forced selling. It created a spiral where ultimately the Bank of England was raising rates at the beginning of a week and printing money the following Friday. So we have to pay very close attention to the fact that if something breaks in credit, we are likely going to see some sort of monetary accommodation at some point. This is the worst quarter for U.S. stocks in nearly four years. Once again, very significant similarities to 2022 on the backside of that cycle. It was supposed to be a banner year for Wall Street. We had people coming out saying we’re going to 7,200, we’re going to 8,000. Well, now investors are just hoping to avoid a global recession triggered by this massive run-up in energy prices. Recession odds still remain high. Goldman saying 30%. Moody’s at 48.6 — pull that number out of a hat. Wilmington Trust at 45%. Now, Jerome Powell has said there’s little chance of contagion in private credit, and I will be the judge of that. Inflation pressures appeared contained for now. No immediate need for further hikes, said Powell. Little chance of contagion in private credit markets. The Fed is not coming to the rescue is effectively what he is telling everybody. No cuts, no hikes. You’re on your own, everybody. He’s going to ride off on a horse into the sunset. The BIS, however — the Bank for International Settlements — says otherwise. Powell says no contagion, but the BIS report said banks are warehousing leveraged loans and hoping to offload them before conditions change. Ares had capped their redemptions at 5% after withdrawals hit 11.6%. Apollo did the same. Cliffwater blew out. Morgan Stanley saying that default rates could hit 8%. So when the Fed chair says there’s little chance of contagion, that’s where you start looking for contagion. On the momentum side, I just want to briefly point this out. This is what our Money Printer Elite members have access to. This is all of the momentum stocks ranked. Top of the board: Apache, Dell, CF Industries, Devon, Archer Daniels, Phillips 66. What is it telling us? Supply concerns in oil, food, fertilizer, downstream refineries, upstream oil and gas. Albemarle joining the list as well. On the downside, MasterCard, Visa, Berkshire Hathaway, Intercontinental Exchange. We just saw a significant insider buy from CME Group today. But look at these names as well. It’s all telling us the same thing — concerns around the consumer, concerns around debt. I want to stress something. Somebody sent me a note last night and said, you do realize that all of the stocks that are breaking down are up today. Yes. Zoom out and look at the chart over the month. One day does not make the market. And I continue to advocate — when we get some level of monetary support, these are the things I’m going to buy. MasterCard and Visa and Berkshire and their huge moats. That’s where I want to ultimately be. But for right now, we are in the process of lower highs and lower lows. If momentum returns to the market, yes, that’s fine. But financials are paying for this war. Berkshire Hathaway’s chart looks very gnarly. That said, I am a long-term holder of Berkshire Hathaway and a very long-term holder of Visa. Three things to watch today. WTI spiking again after that tanker was struck near Dubai. Brent opens above $120 this week? Well, the S&P is likely going to continue to correct. We have to keep an eye on oil prices. Société Générale saying that $150 is on the table. The tanker strike changes the risk calculus overnight. March consumer confidence is coming out this morning. So is the February JOLTS data. Both will tell us whether the labor market is holding or cracking. Moody’s has the recession odds at 48.6%, Goldman at 30%. The data today either confirms or denies those recession calls. And of course, Nike will be reporting earnings. Hey, we’ve got three shows. We’ve got a lot going on here. Morning Burr — this is your free show. After that, I will record Me and the Money Printer. Then Money Printer Pro, where we do a deep dive. We’ll cover the BIS. We’ll talk about the stuff that nobody wants to read. Money Printer Pro comes out right before the bell as well, including the breakout stocks, the breakdown names, and our reader, which you can access 24 hours a day at MoneyPrinterPro.com. All right, everybody. I’m going to wrap it up. I hope you all have a great trading day. Any questions, of course, just put it in the comments section, and we will go from there. Stay positive. About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.
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