5/15/2025
Optimism Abounds
The Roaring 20s stock market provided derivative support to real estate and automobiles. The Auburn Cord Dueseneberg company would finally close its doors during the following Depression. Duesenberg became part of the lexicon with the phrase, she’s a duesy. It meant the object or project was really something special.
The same thing is happening now. There are now four stand-alone Ferrari dealerships in Texas. Not to be outdone, Lamborghini has also opened stand-alones in the same four cities, Houston, Dallas, Austin, and yes San Antonio. I mention stand alone as historically one just cold not sell enough $250K+ automobiles to make a go of it alone. But no longer apparently.
Shoppers ae bidding up Gulf Coast Properties. Some of the most expensive properties ever now exist on the Miami Beach waterfront. However, there are now more homes for sale in San Antonio than at anytime dating back to 1990. And this includes many for over one million dollars.
Near the peak of the dot.com boom the stars of Seinfeld wanted GE stocks rather than more cash pay. They got what they wanted but GE has never seen those high prices since, and has been taken out of the Dow Industrial index.
The desire for stock is back, from Washington DC no less. Senator Ted Cruz proposes that every child in America get $1,000 at birth to invest in the Stock Market. In a fine irony this is part of the ‘tax cut plan.’ The last minute proposal would cost billions a year.
Trump’s tariffs are finally having an effect rumored all my life. In elementary school I recall The Weekly Reader publication continually predicting that Brazil would be the country of the future. It never happened, until now. Realizing the loss of US soybeans, China’s Cofco Agriculture conglomerate is building the biggest export terminal ever outside China. It will triple the size of the Santos port. China has a 90% stake in the southern port of Paranagua. China Railway is building needed track from farmland to the coast. Cosco Shipping has built a deep water port in Peru for better trade between Asia and South America. Careful what you ask for Donald.
The Magnificent Seven stocks are back accounting for 48% of the NASD and 28% of the SPX, which is how both have recovered this year’s loss. Fixating on a handful of stocks is a signature event at market highs.
Keep an eye on the bond market, The thirty-year Treasury now looks to exceed the 5.2% high yield recorded last year. T Bill rates are back to 4.3% far exceeding the SPX dividend yield around 1.5%. The post April 7 rally has re-kindled bull market expectations. Don’t be so sure about that.