3/7/2025
Markets Slide
This market is a screaming buy!
Charles Payne on Fox Business Thursday
This column begins with that quote to make a point to readers. We did not hear Charles announce last Friday that the markets were a ‘screaming sell’ and we never will. This is valuable advice for those who did not live through the bear market of 1973-74. The Industrials lost about 50% in two years. Interestingly there was never a crash day, just two years of drip, drip selling.
Mr. Payne’s screaming buy has the Industrials down 220 at 10:22 AM CST this Friday. In a bear market all surprises are to the downside.
The reason one never hears a sell warning from TV business shows is because they are all sponsored by brokerages and mutual fund companies. The mantra simply states it is always time to buy, never time to sell.
Since the January 13 high the Industrials have lost about 2,400 points.
The SPX has give back all its gains post-election last November. The NDX NASD 100 has done the same. The news media blames this due to the on again off again Trmp tariff policy. There is always a qualitative factor to support the technical analysis. But as mentioned here the Buffet indicator of the Wilshire 5,000 divided by the Gross Domestic Product has been about 2.1. It was only .8 at the dot.com peak. We have an over -heated market trading at 23x earnings.
The headlines suggest it is not just tariff wars.
Tesla Fortunes Fall
Walgreens Sold as Salvage project
Macy’s Expects Uncertainty to Ding Sales
HP Lays off 5% of workforce
And then there is the slide in oil prices. From $77.80 January 14, crude now trades at $67.61. It is bouncing just above next support at $66. But the slide suggests lower demand and or the inability to pay higher prices. Energy Service XES has fallen from 88 on January 13 to 69 today. This is not good news for the Permian Basin. This equals the last low of June 2023.
Trump has stopped using Jerome Powell at the FED for a punching bag, for the time being. The reason is that interest rates have corrected from the recent rise in 2024. The Ten-Year Treasury peaked at 4.8% January 13 and has fallen to 4.25%. I suspect that is the end of the correction meaning rates are likely to start rising again.
As mentioned last week, these are the reasons Buffett owns $320 Billion in Treasury Bills. A wise investor would follow his lead.
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