Hi All
Look at our score card. Our Newsletter portfolio went up by 16.9% in May 2025. A few weeks ago when the tariff issue became known, the market took a great hit. As I said then that was an amazing opportunity for traders and investors. Most people got scared and sold their “good” stocks. All the stocks I bought a few weeks ago are up 50% to 80%. This kind of volatility is “heaven sent” for traders. Hopefully this trend will continue till Trump leaves the WH. On 5/30/25, Jamie Dimon, the most respected CEO (JP Morgan) stated that “he expects trouble or a major crack in the bond market. You will see people panic and sell. We will make money”. Even Trump said that he takes Jamie Dimon seriously. I agree with Jamie Dimon 100%. Imagine what might happen; bond yields going up to 10% to 15% and most people selling stocks to buy bonds which could lead to a 66%(per Elliot Wave) to a 90% correction in the stock market. Thinking about that opportunity makes my mouth water! I have 50% in cash and I bought some put options on the S&P500 that expire June 2026 (in 12 months)- to short sell the market. When the bond market falls sharply, as I have done in the past, I will use options to make money in the bond market. Jamie Dimon is correct on another point-when most people act foolishly, we could make money. The Pentagon warned that China is close to invading Taiwan. The market is not taking that seriously as in the story “boy who cried wolf”. China has a monopoly on rare earth minerals and due to their embargo, US auto manufacturers have started closing down already. Trump banned Nvidia from exporting the most powerful chips to China. All those chips get manufactured in Taiwan. When China invades Taiwan, all those chips will belong to China and they will ban sales to the US. It could happen. When Herbert W Bush was President, China banned all rare earth exports to Japan and it was panic time for the west. We decided to get self-sufficient in rare earth minerals; but nothing was done about it. How about the crack in the bond market predicted by Jamie Dimon? China can unload all their US Treasuries and the bond yields will rise to 10% to 15%. When our banking crisis happened around 2008, Russia urged China to do this at that time. We have to stay calm and act prudently. I am talking about “emotional intelligence”. Since Trump took over the WH, the US dollar has gone down in a significant manner – it went down from Biden’s $110 to the current $99. Foreign investors and US investors are selling US assets and buying foreign assets. I think that they are being foolish. When US markets crash, they will come back. I have seen this movie in the past. Bond yields in Japan, USA, UK have been rising lately-especially in Japan. This is very bad for the global economy.
Carley Garner is an American commodity market strategist and futures and options broker and the author of Trading Commodity Options with Creativity, Higher Probability Commodity Trading, and A Trader's First Book on Commodities, published by DT publishing an imprint of Wyatt-MacKenzie. On 6/3/25, Carly predicted that oil will keep going down but the US dollar will change its direction and have a “rip off’ rally.
On 5/7/25, the Federal Reserve kept interest rates unchanged as they feared inflation with Trump’s tariffs and the possibility of having “stagflation” (inflation + recession) in the future. Remember the 1970s?
Jeffrey Edward Gundlach is the founder, CEO, and CIO of DoubleLine Capital, a fixed-income investment firm. He's known as the "King of Bonds" and a leading bond market expert. With respect to the Fed decision, Gundlach stated the following on 5/7/25:
· The yield curve is reinverting.
· Unemployment is rising.
· US Govt. interest charges $4 Billion per day.
· Junk bond rates going up- scary!
· No volatility in the gold market. Now it is an asset class due to global conditions. Expect the price of gold to rise to $4,000.
· Harvard selling their bonds for their ash flow needs-more than $1Billion.
· By the end of 2025, expect inflation to be above 4%. (When Biden left, it was 2.5%)
· US Treasury and the Federal Reserve might do “yield curve control”.
· Stay away from C Grade or lower bonds.
· By December 2025, the Feds might cut rates due to liquidity issues.
· Money will come out of the US and go in to Europe and overseas markets.
· During 2025, Europe has outperformed the US market.
· The US dollar will keep going down.
· Long term rates are going up.
· Treasury Sec talked about extending the duration of the bonds owned by foreigners and decrease the rates paid on them-if this happens, the bond market will crash.