I’ll Be Live Here in 15 Minutes. Let’s All Scream into the Void… The Morning Report is Here.
Not a member? Join us for your first year at 40% off… You get this show and this write up each day… plus access to the Money Printer Pro platform… Good morning: I want to put in front of you that my next podcast will launch tomorrow. This is a really important one. Recently, McKinsey released a report where they did a complete valuation analyis of… the Planet Earth. It’s worth $1.8 quadrillion. Now… I know this sounds weird… but the meat of the report is what matters. They determined that the U.S. is basically just a bubble (one of my arguments for years). The valuation of the U.S. assets trade a massive premium to the rest of the world. And the reason is because we’re a financialized system. In fact, JUST 1 in EVERY 5 dollars that is linked to the wealth that expanded LAST year was tied to the actual physical creation of something that wasn’t there a year ago. So, a new building, company, shopping mall… etc. The other 4 out of 5… were all largely mark ups… with about 2 of those 5 created through the equity market as valuations just climbed. This is the problem… it’s not capitalism. It’s financialization... and the effective massive works program that the U.S. has turned into with people’s careers now explicitly linked to financing, refinancing trading, packaging, regulating, explaining, or protecting all claims linked to that financialization… It’s an absolutely staggering story… and I finished the script over the last 48 hours, and will record it over at What Are We Missing… this afternoon. That said… I’ve titled this episode something different: What Have We Done. This is the story that should be shared ahead of the election… because the cost of housing, food, and living in America isn’t tied to “capitalism.” It’s tied to the ongoing monetary adventure and the persistent expectation of a bailout culture in order to protect the value of the claims and prevent a debt deflation crisis… America is the bubble… and the policy response has been the driver. The evidence arrives tomorrow at 10 am. Five Macro Notes
We start today with a jobs report… and I’ll take you through it at 8:30 am. We’ll look at the Good, the Bad, and the WTF of it … No sense trying to guess what is coming… when the report lands in 15 minutes.
There’s always money in the midstream. Iran published a draft plan to bar US and Israeli ships from the Strait of Hormuz, pushing Brent back toward $83. The desks are now starting to worry about the huge drop in Europe’s winter with gas storage about 18 points below the seasonal average. There is a fat tail waiting here.
The White House just slapped a 15% tariff plus price floors and minimum import prices on polysilicon, where China makes 93% of world supply. Korean solar stocks surged in news, and MP Materials is in play. 4. Credit is Cracking the AI Trade Moving forward, the AI story is a credit one. AI-related bond issuers are seeing wider spreads than their peers. Even hardware and infrastructure will face more scrutiny. This is important because it’s all happening while markets are at an all-time high. More proof of the support markets have from passive flows… and greater questions about the wiring of the system . 5. Debasement is Back The weaker dollar and questionsa bout China stimulus have us back in the pool on gold and silver. I said last week that the fact gold didn’t move despite that huge downturn in AI names in July… that this was bullish. I’ll talk about how to trade and invest in gold moving forward. I’m still very bullish. Traders Focus That all said… we come in green to start, with the market drifting into this morning’s jobs print. We’ve got a little pullback in oil after it started creeping higher yesterday. They’ve stair-stepped crude down all week. Hopefully this doesn’t come with a nasty surprise. The one thing that has my attention early is the 10-year. It’s a little high for comfort at 4.66, and the chart looks like it could want to go higher. That’s our concern first thing.
The jobs print at 8:30 is going to move that number, and where the 10-year goes decides where capital heads today. The whisper is soft after ADP came in at just 44,000. That sets up a weird spot where a hot number is taken as good news and a soft one as bad news. If it runs hot, the 10-year pushes over 4.70, and that’s where you get careful. Financials become the move, since the banks have worked well with yields up here. If it’s terrible, you get a knee-jerk reaction. Probably a recovery, and gold and the materials keep working. A Goldilocks print with the 10-year rolling over, and it’s the semis and software, the highest-beta stuff, that lead. We’re getting a little more clarity on the Hormuz deal too, and we’re looking for the confirmation. That would be bullish. Looking at our breakouts and breakdowns this morning, there was nothing new on the breakdown early, which is worth noting, and a batch of new stuff on the breakout side. Freeport (FCX) remains at the top of the list, up 10% on the week and 14% on the month. First Solar (FSLR) is there too. We highlighted it a couple days ago, and it’s up about 10% since, after Trump signed an executive action putting a 15% tariff and price floors on polysilicon and solar products. If you want in still, this could run to 280 before it hits any resistance, so you could trade a call spread. More likely you see it pull back to the 50-day and retest, so it’s better to wait and sell a spread under 220. That’s where I like it.
Eaton (ETN) and ITW are back on the list. The names that make the electrical gear and equipment have held up the whole way, sitting on big backlogs with long lead times to build. The ones that got beaten up are the bigger, more cyclical machinery and power names, Generac (GNRC), Caterpillar (CAT) and Cummins (CMI). They’re capex-heavy, so they sold off harder, and those are the turnaround plays we flagged a week ago. You can add Liberty Energy (LBRT) to that list now. It took it on the chin on the 23rd over its move into the power business. That looks like an overreaction, tossing the baby out with the bathwater when the capex story hit the front page. If the 8-day crosses the 20 and it reclaims the level above, there’s about $3 of recovery to the 50-day EMA, a 15% move.
We almost had a trade set up on Nvidia (NVDA) yesterday, but it lacked the volume to confirm. We could get that later today, so we’re looking for a reason to get in. We’ve got weekly options expiring today, so there’s plenty to trade. On our triples, there’s still a lot of healthcare exposure, and that’s where I’d look if the market stumbles a little today. Boston Scientific (BSX) is one of our strongest setups this morning. It’s been on our list a few days, first popping up Tuesday. The 8-day crossed the 20 seven days ago, and there’s insider buying. It’s digging out of a hole, so you’re fighting a headwind until you’re over 53.50. The top trade score on our board this morning is Gartner (IT), the research and consulting name. It was on our list yesterday too, with an 8/20 cross nine days ago, rising volume, and cheap on our triples screener this morning. They beat and raised their outlook.
Further down, Farmland Partners (FPI) just got a fresh cross. It’s just under $10 at 9.94, which is a significant level. The last time it broke 10 with an 8/20 cross, it ran about 32% up to 13. There’s resistance around 10.33 and then 10.75. It’s not a fast mover, with a beta of 0.68, but the setup is there.
Utilities are nearing oversold. They’ve been beaten down through this whole run. When the XLU digs out, and we get a positive cross on the MACD, we’ll start looking at names like Constellation (CEG). Right now the metals are what’s running, with the debasement trade back in focus. The dollar’s back under 100. The Treasury is helping buy yen while Japan keeps printing it. All of it is inflationary. Gold is starting to run, silver is up almost 5% this morning. Energy Fuels (UUUU) is up about 7%. The next one I’d watch on the launch pad is Alcoa (AA). It’s moving slowly, but if the metals keep working, this chart looks like the rest of them. You could see it get back to 55, up around the 50-day SMA, about 15% from here.
It all comes down to where the jobs number lands at 8:30. Watch that 10-year. When the print hits, I’ll be live so we can go through it together, and that’ll dictate where our focus is today and where the best place to trade around VWAP will be. I’ll see you in a couple minutes, and we’ll go through the jobs numbers. Market outlook
Momentum -- Steady
Stocks slipped Thursday, the first down day in a week, and it was a mild one. The S&P and Nasdaq barely moved. Selling remained mostly in cyclical names, while technology held up. The reason was oil, and it had flipped from Wednesday. That day, crude falling on the Hormuz de-escalation carried the cyclicals to their highs. Thursday it ran the other way. Iran and Oman drafted a temporary shipping route through the strait, but Tehran warned it still isn’t secure. Crude jumped almost 3%, and yields rose with it to 4.67% on the 10-year. That was enough to push stocks lower. The trend cooled without breaking. All three of our readings are still green. The Nasdaq and small caps eased off their highs, though, and the daily pulse turned negative. Leadership flipped for the second day running. The cyclicals that led the market up on Wednesday led it lower on Thursday, while technology held steady through both. Momentum firms back up this morning. The pulse that rolled over Thursday has snapped back positive across all three readings, and the premarket comes in broadly green, with only energy soft as oil backs off. So the cooling is looking like a single session, with the trend steadying underneath it. All of that comes in ahead of the jobs report, which lands before the bell and sets the day’s direction from there. Insider Buying: Seeing Some Improvement
Top Insider Buys of Last 10 Days - Form 4 Documents
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