Hey There Income Hunters,
It was a wild week for the Consumer Discretionary sector, as Tesla Inc. (Ticker: TSLA) and the travel and leisure stocks took a beating …
Meanwhile the materials sector led by miners and suppliers, including Sherwin-Williams Co. (Ticker: SHW) and Air Products & Chemicals (Ticker:APD) were the best performers of the week.
The market has now shifted from an inflation-is-transitory mindset to the-Fed-has-lost-control-of-inflation psychology.
Yet, even still, investors are not prepared for the impact higher inflation will have on the markets.
There is a massive opportunity to capitalize on the moves that are coming. I have been there and my new POWER INCOME TRADER program is designed to take advantage of inflation for massive trading profits.
Today, I’ll share the hot stocks to watch for the weeks and the key data that could move the markets.
This Week’s Market Movers
The data that matters this week is the Retail Sales and Industrial Production report on Tuesday at 8:30 a.m. and initial jobless claims on Thursday.
US Treasury Supply
20-year bond auction: On Wednesday, the Treasury will issue $23 billion 20-year bonds at 1pm.
Now, after last week’s terrible 10- and 30-year bond auctions that pushed the iShares 20+ Maturity Bond ETF (Ticker: TLT) down 3.3%, the 20-year bond auction may pressure TLT again this week.
Here is the TLT technical setup:
Expect TLT to break the 50 DMA and test the 200 DMA heading into Wednesday. I purchased a TLT Dec 17 148/146 put spread last week looking for it to test the 144 level where I would close the trade.
Real Interest Rate Watch
After the highest inflation report in 40 years, the 10-year real interest rate, which is the consumer price index (CPI) minus the 10-year nominal rate, reached a new low. This ignited a major breakout for silver and gold and also boosted precious metal miners.
Notice the trend higher in CPI versus 10-year and overnight (O/N) interest rates below. As the spread between CPI and interest rates widens, precious metals will soar higher …
This is because investors are forced to move out of bonds and into real assets in an effort to find returns that keep up with inflation.
This is the trend to watch this week. We may get a re-test of breakout levels since both are near overbought conditions.
However, there are plenty of catalysts that would send the precious metals much higher in the weeks and months ahead including:
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- Fed chairman Jay Powell being replaced by a more dovish Lael Brainard, which would mean more spending and inflation
- A more protracted correction in the stock market that would force more the Fed to come to the rescue of the market and retreat from QE taper
- Geopolitical risks
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The Long-term Trend for Precious Metals
Inflation has reached a plateau in the past couple of months that has caused a shift in the psychology of investors …
The Fed’s control mentality has changed as inflation has proved to be anything but transitory and as confidence in the Fed has been tainted by their insider-trading scandal.
Gold has always been much more than an inflation hedge and that will become much more clear in the months ahead.
Gold and silver have always represented “real money,” and when central banks lose control of their currency, precious metals are the true alternative as a store of value.
Check out the historic ratio of gold to the Dow for a glimpse of how much gold will outperform the Dow in the years ahead.
Bring It Home
POWER INCOME TRADER launched ast week and it will help you not only stay ahead of inflation, but exploit it to make incredible trading profits and generational wealth.
I know how to attack inflation and have been killing it this year. It helps that I am one of the few traders working today who traded the inflation of the 1970s and 1980s.
Now I’ve built a system designed to anticipate Fed policy so you can get ahead of the market and crush it consistently.
But demand has been soo huge for POWER INCOME TRADER that we’re closing access for founding members tonight.
Don’t miss out
Live and Trade With Passion My Friends,
Griff