Dow Complex Notches New high
There is a strong upward cycle into next week. That cycle has taken the DOW Industrials and Transports to a new high. The Industrials have risen an amazing 883 points just 75 minutes into today’s session. The NDX, NASD 100, has held support at the previous mid-November low and is up 1.21% this Friday morning. The SPX has held above its mid-December low and is up 1.29%
The AI Innovation and Tech ETF is BAI. It just dropped form 36 to 32 and has rebounded to 33.67. The idea is that Artificial Intelligence will take over computer coding making these companies the new version of eight track tape manufacturers. The SOX semi-conductor index has long been the best indicator of the health of the chip makers. It has soared from the April 2025 low of 3500 to 7886. This reflects the mania over AI chips. Nvidia, the leading AI chip maker sold of from 192 to 172 but is also rallying today to 183.
The bearish case is definitely on hold.
I read that various Wall Street types think Trump’s pick of Kevin Marsh will steady the Fed’s independence. It is known that Trump thinks over night rates should be at 1-2%, not the current 3.75%. Anyone who fails to do Trump’s bidding does not hang around for long. Ask any of his four National Security Advisors from his first term. First Brands is an auto parts maker of well known brands like Michelin tires and FRAM oil filters. After running through $1.1 B earlier this month, further loans were not forthcoming. The auto makers themselves have had to furnish financing to keep supply lines open. Now the CEO is under indictment for double selling invoices, some of which were apparently fake.
The ten-year Treasury Note yield bottomed in late November around 3.94%, It has risen to a recent high of 4.3%. the last few days it has backed off to 4.21%. Recall the 39-year low in interest rates occurred in March 2020 with the Note yielding a mere .5%. the rise off that low has been impressive. Given the cycle low, it is hard to see lower rates ahead.
The world is awash in debt. In 1960 global debt was $290 billion. Today it is more than $40 trillion. This is a 135x increase. At the same time the spread between corporate bond and Ten-Year Treasury yields is the lowest in 28 years. There is the lowest fear of default in years while we have more debt than ever.
The good news for the Basin is crude oil at $64.05. Energy stocks have been front and center in the latest trend that trashed chip stocks with war cycles brewing in February look for stronger crude prices
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