Author Archives: Phoenix Capital Research

Stocks Will Hit New All Time Highs Before February 1, 2024

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By Graham Summers, MBA

The S&P 500 is consolidating after one of its best monthly performances in the last 30 years.

Thus far in November, the S&P 500 is up 8.5%. If the month ended today, it would be one of the top 10 monthly returns for the S&P 500 in the last 30 years. We rode this rally the entire way up, having told our clients to buy stocks aggressively when the S&P 500 was down at 4,200. Suffice to say, they’re quite happy.

And their #1 question today is: so what’s next for stocks?

The S&P 500 is quite overextended, having rallied to a level that is 4% above its 50-day moving average (DMA). Throughout the last 12 months, an extension of this magnitude above the 50-DMA has marked a temporary top for stocks.

The big question now is if stocks correct… or if they simply consolidate here, thereby allowing the 50-DMA to catch up to price, before the market make its next push higher. 

Thus far the market is opting for #2: consolidating. 

The S&P 500 has traded within a 20 point range since November 22nd. The key issue here as far as I’m concerned is that the bears have failed to push stocks down in any significant way, even though there was very low trading volume due to the Thanksgiving holiday.

Think of it this way… stocks are finalizing one of their most aggressive single month rallies  in 30 years, and the bears can’t even generate enough selling pressure to push the S&P 500 down 1%. 

This suggests that the next move for stocks will be up once this consolidation is over. And given that the market is less than 5% from its all-time highs, I believe we’ll see the S&P 500 hit NEW all-time highs some time in the first quarter of 2025, likely before February 1st, 2024.

For more market insights and analysis, join our free daily market commentary Gains Pains & Capital. You’ll immediately start receiving our Chief Market Strategist Graham Summers, MBA’s briefings to your inbox every morning before the market’s open.

And if you sign up today, you’ll also receive a special investment report How to Time a Market Bottom that the market set-up that has caught the bottoms after the Tech Crash, Housing Bust, and even the 2020 pandemic lows.

Even more importantly, you’ll find out what this trigger says about the market today!

This report usually costs $249, but if you join Gains Pains & Capital today, you’ll receive your copy for FREE.

To do so…

https://phoenixcapitalmarketing.com/TMB.html

Yes, You CAN Time the Market… And I’ll Show You How!

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By Graham Summers, MBA

Yesterday’s article caused quite a stir.

It is widely believed that you cannot time the market. This is a myth. You can time the market, but it takes a lot of work and knowledge.

Case in point, as I outlined in yesterday’s article, I accurately called for the S&P 500 to run to 4,600 back on November 2, 2023 when the market was still just at 4,200.

The S&P 500 hit a high an intraday high of 4,557 yesterday. Modesty aside, this was an incredible call, made within a few days of the market hitting its absolute lows before the rally.

This wasn’t luck either. 

Prior to this call, I had been warning clients for weeks that stocks would break down to the 4,100s on the S&P 500 and that this would be a MAJOR buying opportunity. Heck, the literal title to a research note to private clients on October 5th was “Bonds Stabilize… But I Expect a Final Flush for Stocks.”

What happened next is illustrated in the chart chart. Again, I called for the S&P 500 to drop to the 4,100s weeks in advance, then predicted the S&P 500 would run to 4,600 weeks within days of the market bottom in late October.

So my point remains the same: you CAN time the market, but it takes a lot of work and knowledge.

For more market insights and analysis, join our free daily market commentary Gains Pains & Capital. You’ll immediately start receiving our Chief Market Strategist Graham Summers, MBA’s briefings to your inbox every morning before the market’s open.

And if you sign up today, you’ll also receive a special investment report How to Time a Market Bottom that the market set-up that has caught the bottoms after the Tech Crash, Housing Bust, and even the 2020 pandemic lows.

Even more importantly, you’ll find out what this trigger says about the market today!

This report usually costs $249, but if you join Gains Pains & Capital today, you’ll receive your copy for FREE.

To do so…

https://phoenixcapitalmarketing.com/TMB.html

How We Called the Santa Rally Week’s Before Anyone Else

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By Graham Summers, MBA

The following are excerpts from my Private Wealth Advisory market update to private clients written on 11-2-23. At that time the S&P 500 was trading in the 4,200s. It’s at 4,531 today.

The door is open to a Santa Rally to 4,600 or even higher on the S&P 500.

Why?

The Treasury just removed the single largest concern for stocks for the remainder of the year.

As I’ve noted previously, one of the most difficult aspects of stock market investing is that the market is a discounting mechanism for millions, if not billions, of pieces of information. The stock market represents the collective decisions of millions of individuals all of whom are thinking about a myriad of data points/ issues… and all of whom have literal money on the line.

However, out of all the millions or billions of pieces of information that the market is discounting at any given time, it typically only really cares about two or three issues at a time. 

Sometimes it’s inflation. Other times it’s what the President is doing (or tweeting). Other times it’s China. Other times it’s what the Fed is doing or about to do. Other times it’s the economy. And so on and so forth.

What makes things even more difficult is the fact that the market changes its focus all the time. It might be really focused on inflation for a few weeks only to then ignore inflation for months on end. Similarly, the market might go weeks without acknowledging anything Fed officials say, only to then care a great deal about a single statement made by a single Fed official during an hour-long Q&A session.

I bring all of this up, because since late-July/ early-August 2023, the #1 thing the market has cared about has been the size of the Treasury’s long-duration debt issuance…

On July 31st 2023, the Treasury announced its financing needs for the third quarter (July through September). The Treasury announced it would:

1)    Need to borrow $274 billion more than previously expected.

2)    Increase its issuance of longer duration Treasury bonds for the first time since 2021.

Regarding #2, the actual increase in dollar terms of long duration bonds that the Treasury needed to issue was relatively small ($102 billion vs. $96 billion). However, the fact that there was increase in long duration issuance, combined with the increase in total debt issuance ($274 billion) was a surprise.

And the bond markets HATE surprises.

Since that time, bond investors have been dumping ALL long duration bonds. This has resulted in long-term Treasury yields rising (bond yields rise when bond prices fall). And because the stock market is priced based on long-duration Treasury yields, this has meant a sell-off in stocks.

The chart bel shows the yield on the 10-Year U.S. Treasury and the S&P 500 from the last QRA announcement on July 31st 2023 until last week. As you can see, the two items have been moving in lockstep.

Which brings us to this week (week of 10-30-23).

On Monday the 30th of October, the Treasury issued its QRA for the fourth quarter of 2023. It surprised the markets (in a good way) by stating that it would borrow only $776 billion (this was $76 billion less than previously expected).

Then, on Wednesday (11-1-3), the Treasury released its Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee.

In it, the Treasury Borrowing Advisory Committee wrote the following (emphasis added)

The Committee supported meaningful deviation from the historical recommendation for 15-20% T-Bill share. While most members supported a return to within the recommended band over time, the Committee noted that the work Treasury has done to meaningfully increase WAM over the past 15 years affords them increased flexibility with T-Bill share in the medium term.

Source: Treasury.gov

As I explained to clients in the remainder of this market update, the decision of the Treasury to rely extensively on short-term T-bills to finance the deficit would ignite a “risk on” rally that will likely last into year-end.

Since that time, the S&P 500 has done this:

For more market insights and analysis, join our free daily market commentary Gains Pains & Capital. You’ll immediately start receiving our Chief Market Strategist Graham Summers, MBA’s briefings to your inbox every morning before the market’s open.

And if you sign up today, you’ll also receive a special investment report How to Time a Market Bottom that the market set-up that has caught the bottoms after the Tech Crash, Housing Bust, and even the 2020 pandemic lows.

Even more importantly, you’ll find out what this trigger says about the market today!

This report usually costs $249, but if you join Gains Pains & Capital today, you’ll receive your copy for FREE.

To do so…

https://phoenixcapitalmarketing.com/TMB.html

Enjoy the Santa Rally… What Comes Afterwards Won’t Be Pretty

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By Graham Summers, MBA

Treasury Secretary Yellen wants stocks and bonds higher. 

The reason is simple.

Next year 2024 is an election year. And Yellen is a playing politics for the Biden Administration. After all, it’s hard to convince voters to re-elect someone when their 401(k)s are shrinking by the week.

This is why Secretary Yellen chose to have the Treasury shift its issuance from its traditional breakdown of 15%-20% short-term debt/ 80%-85% long-term debt to favor issuing more short-term debt for the foreseeable future.

Doing this alleviates some of the pressure on long-term Treasuries as well as stocks which are priced based on the former’s yields. This is THE reason why both assets (stocks and bonds) erupted higher last week after declining for most of the last three months.

The BIG problem with this is that Secretary Yellen is choosing to rely heavily on short-term debt at a time when the Biden Administration is running its largest deficit as a percentage of GDP outside of WWII.

The U.S. has added nearly $2 TRILLION to the debt in the last 12 months alone. This is happening at a time when the Treasury is ALSO rolling over trillions of dollars worth of debt. 

By relying on short-term debt (12 months of less in duration), Secretary Yellen is setting the stage for an absolute disaster in late 2024/ early 2025. 

Why?

All of this short-term debt will be coming due between now and then. By late 2024, the U.S. will have nearly $35 trillion in debt. And if inflation hasn’t collapsed by then, all of the new short-term debt will need to be rolled over when rates are HIGH.

Interest payments on the debt are already at $800 billion. What do you think will happen to them when the U.S. has $35 trillion in debt and needs to roll over a large amount of this while rates are still in the 4% range or higher?

The long-term end of the bond market has figured it out. Stocks will too eventually.

As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching.

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The Great Debt Bubble burst in 2022. And the crisis is now approaching.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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Warning: the U.S. is on the Verge of Becoming an Emerging Market

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By Graham Summers, MBA

Both stocks and bonds caught a bid mid-week on announcements that the Treasury has decided to issue less long duration bonds that previously expected.

This is GREAT news for risk assets in the short-term. It’s EXTRAORDINARILY BAD NEWS for EVERYTHING in the long-term.

Let’s me explain.

The recent sell-off in both bonds and stocks was driven by one primary concern: that the Treasury would need to issue a gargantuan amount of long-term debt to fund the Biden administration’s profligate spending.

In its simplest rendering:

1) The Biden administration is running the largest fiscal deficit as a percentage of GDP outside of WWII.

2) All of this spending requires the Treasury to issue massive amounts of debt.

Historically, the Treasury’s debt issuance consisted of 15%-20% short-term debt, and 80%-85% long-term debt. The reason for this was to avoid a rate shock should rates change dramatically in a 12-month period (all the short-term debt would come due at a time when rates were much higher).

It was this heavy reliance on long-term debt issuance that resulted in the 10-Year U.S. Treasury collapsing from late July through late October. And since stocks are generally a long-duration asset class, this pulled stocks down as well. 

The below chart shows the 10-Year U.S. Treasury (red line) plotted against the S&P 500 (black line). As you can see, the two were trading in lock-step as soon as the Treasury announced its long duration debt issuance needs for the third quarter of 2023 on July 31st.

The Treasury took note of this collapse, which is why it announced a shift in focus for its 4Q23 debt issuance from long-term debt to short-term debt. 

In its very simplest rendering, the Treasury intentionally removed the #1 concern for the stock market… thereby opening the door to a Santa Rally into year-end. Unfortunately, the cost of this is that the U.S. debt markets will be in VERY serious trouble a year from now.

Why?

Because this is a “one time” trick that cannot be repeated. Sure, it puts a floor under bonds for the time being, but unless the government cuts spending in a BIG WAY, sometime in the next 6-12 months all of this short-term debt will come due and the Treasury will once again need to issue long-term debt.

Mind you, the U.S. is currently adding debt at a pace of nearly $2 TRILLION per year. So you can only imagine the yield investors will require to lend money to Uncle Sam for any time period a year from now when our debt is over $35 trillion and we’re still running a ~$1 TRILLION deficit.

The below chart needs no explanation. Long-term Treasuries have broken their multi-decade trendline. They are now sitting on CRITICAL support. Once that green line goes, the debt crisis begins.

As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching.

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The Great Debt Bubble burst in 2022. And the crisis is now approaching.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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Japan’s Currency Hasn’t Traded Here Since the Late 1980s!

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By Graham Summers, MBA

Japan’s currency is now collapsing.

Japan’s central bank, the Bank of Japan (or BoJ for short) is currently engaged in an open-ended Quantitative Easing (QE) program. In its simplest rendering, the BoJ starts buying the 10-Year Japanese Government Bond any time that bond’s yield rises to 1% or higher.

It’s possibly the boldest QE program in history: a definitive “line in the sand” drawn by a major central bank as far as bonds are concerned. Again, this is an open-ended, unlimited QE program through which a MAJOR central bank does whatever it takes to keep is country’s bond yields from rising.

However, even this program is proving inadequate.

The BoJ has had to engage in previously unscheduled bond market interventions SIX TIMES in the last four weeks. And yesterday, it finally gave in and announced that its “line in the sand” of 1% for the yield on the 10-Year Japanese Government bond is now a “loose upper bound” instead of a definitive cap.

The below chart needs little explanation.

In response to this announcement, Japan’s currency, the Yen, broke to new lows. The Yen hasn’t traded at this level since the late 1980s!

This is the end game for every major central bank: the gradual losing control of the bond market… and having to sacrifice your currency in order to stave off a debt crisis. But even that won’t work eventually as the weaker the currency, the less value bonds will have.

As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching.

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The Great Debt Bubble burst in 2022. And the crisis is now approaching.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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The Markets Fell For a Lie Yesterday… But This Won’t Last

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By Graham Summers, MBA

Yesterday, the Treasury announced that it would “only” need $775 billion to fund the budget for the fourth quarter of 2023.

This was considered to be good news.

Back in July, the Treasury had announced it would need $852 billion for the fourth quarter. So the fact the Treasury surprised the markets by needing less was used as an excuse for traders to gun the markets higher.

There’s just one small problem with this…

The Treasury QRA was an obvious lie. There is no way on earth the Treasury only needs $775 billion in refunding for 4Q23. Heck, it needed $500 billion in the last month alone!

Moreover, it’s not as if the government is suddenly becoming careful about spending. The Biden Administration has added $4.6 trillion in debt since taking office. And the pace is actually INCREASING, not decreasing: they added almost $1 TRILLION in new debt between 1Q23 and 2Q23.

So again, the idea that the Treasury can somehow fund everything with just $775 billion in refunding needs in the 4Q23 is a joke. The real amount will be MUCH larger than that.

As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching. 

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The Great Debt Bubble burst in 2022. And the crisis is now approaching. 

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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Will Janet Yellen Give Us a Santa Rally… or a Debt Crisis?

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By Graham Summers, MBA

The fate of the stock market is in the hands of Treasury Secretary Janet Yellen this week.

Every quarter the Treasury announces its financing needs via its Quarterly Refunding Announcement (QRA). In the QRA, the Treasury announces:

1) How much debt it will need to issue total to fund the government for the coming quarter.

2) The amount of new debt the Treasury will need to issue as opposed to simply rolling over old debt.

3) The breakdown of the debt issuance: short-term T-bills versus longer-term Treasury Bonds.

These three items are the MOST IMPORTANT issues for the markets today.

If you think I’m exaggerating this, consider that the last time the Treasury made its QRA was July 31st 2023. That was THE day that stocks topped and bond yields began to skyrocket.

The Treasury will announce the basics of the #1 and #2 in the list above today. But we won’t get the full breakdown of debt (#3) until Wednesday. 

Historically, the Treasury tries to keep the amount of short-term debt issuance to just 20% of total issuance. The reason for this is that if the Treasury relies too heavily on short-term debt to fund spending, it opens the door to a rate shock.

Consider what would have happened if the Treasury had issued 80% of total debt in short-term T-bills in 2021 when rates were at 0.25%. At the time, the move would have looked quite clever as the Treasury would be taking advantage of the fact that rates were so low. However, fast forward a year to 2022, and the Treasury would need to roll over that same debt at a time when rates were now ABOVE 4%! Interest payments would have been EXPONENTIALLY higher and a debt crisis would arrive.

So again, the Treasury usually keeps T-bill issuance to just 20% of total issuance… unless it’s intentionally trying to calm the markets and juice stocks higher for political purposes.

Which brings us to today.

Janet Yellen is ACUTELY aware of the impact that her decisions will have on the stock market. Indeed, the hallmark of her tenure as Fed Chair from 2014-2018 was to implement monetary policy that benefitted stocks, even if the economic data didn’t warrant it.

So the odds favor her doing something to prop the markets up… especially as we enter an election year in 2024.

However, doing this only sets the stage for a debt crisis down the road. If the Treasury relies extensively on T-bills to finance the budget now, that same debt will come due in a year… which opens the door to a MAJOR rate shock at that time, especially if inflation rebounds.

Again, the fate of the stock market is in Treasury Secretary Janet Yellen’s hands today. If she chooses to game the debt markets for political purposes it only delays the inevitable debt crisis… and not by much.

As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching. 

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The Great Debt Bubble burst in 2022. And the crisis is now approaching. 

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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Are We About to Witness the First Major Central Bank Failure in Decades?

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By Graham Summers, MBA

Japan is slowing losing control of its bond market.

The Bank of Japan (BoJ) is currently engaged in an open-ended Quantitative Easing (QE) program. In its simplest rendering, the BoJ starts buying the 10-Year Japanese Government Bond any time that bond’s yield rises to 1% or higher.

It’s possibly the boldest QE program in history: a definitive “line in the sand” drawn by a major central bank as far as bonds are concerned. Again, this is an open-ended, unlimited QE program through which a MAJOR central bank does whatever it takes to keep is country’s bond yields from rising.

However, even this program is proving inadequate.

The BoJ has had to engage in previously unscheduled bond market interventions SIX TIMES in the last month. The below chart needs little explanation. You can see that yields broke above critical resistance in mid-2023 and have gone vertical ever since.

At this point, the BoJ is now having to engage in direct interventions in its bond market more than once a week. And this is happening at a time when the Japanese currency (the Yen) is about to break to new lows.

As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching.

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The Great Debt Bubble burst in 2022. And the crisis is now approaching.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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Manipulations Will Work… But Only For So Long

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By Graham Summers, MBA

“Someone” saved stocks yesterday.

The day started with the S&P 500 breaking below:

1) The 200-DMA (red line in the chart below).

2) The October lows at 4,223 (purple line in the chart below).

3) CRITICAL support at 4,200 (blue line in the chart below).

This happened as the yield on the 10-Year U.S. Treasury breached 5% for the first time since 2007. As I’ve noted before, a close above this level would induce a collapse in risk assets, including stocks.

That’s when “someone” or “someones” MANIPULATED the stock market, by PANIC buying stocks, forcing the ENTIRE MARKET up by 35 pts in the span of 40 minutes. From that point until 1PM, every single dip was bought with PANIC buying.

How do we know this was manipulation or an intervention?

NO ONE panic buys stocks the moment they break below critical thresholds. There isn’t a single trading shop or trading team in the world in which the head screams “GO ALL IN ON STOCKS” as soon as the market violates a critical level of support.

In the simplest of terms, the manipulators staved off a crisis… for now. But the fact remains that the U.S. Treasury bubble burst in 2022. And the crisis is now approaching.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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Is the Great U.S. Debt Crisis About to Begin?

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By Graham Summers, MBA

The yield on the 10-Year U.S. Treasury is about to break 5%.

As the below chart illustrates, this is a major level. Once we take it out, there’s little if any overhead resistance until 5.25% and then 6%. 

The 10-Year U.S Treasury is the single most important bond in the world. It is the bond against which all long duration risk assets (real estate, tech stocks, etc) are priced. So if it collapses in a panic (meaning its yields skyrocket) then the ENTIRE financial system will panic.

Stocks are already completely disconnected from the realities of the bond market. They won’t be for much longer if bonds continue breaking down.

Is the Great U.S. Debt Crisis about to begin?

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The U.S. Treasury bubble burst in 2022. And the crisis is now approaching.

Smart investors are already taking steps to prepare for this.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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I Guarantee You Most Investors Aren’t Ready For This

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By Graham Summers, MBA

The yield on the 2-Year U.S. Treasury hit a new high yesterday.

Why does this matter?

Because…

1) It indicates the Fed’s fight to tame inflation is NOT done.

2) Stocks are in for a world of hurt in the coming months.

Regarding #1, back in May 2023, the 2-Year U.S. Treasury was anticipating that the Fed would have rates at 3.75% in May of 2025. At the time, this meant the Fed would cut rates at least two times before May of 2025 (rates were at 5.25% in May 2023).

Fast forward to today, and the 2-Year U.S. Treasury has just broken out to new highs of 5.20%. This means the market is now anticipating that the Fed will have cut rates possibly ONCE by October of 2025. Moreover, the idea that rates will be ABOVE 5% instead of BELOW 4% in late 2025 is a HECK of a shift.

Put simply, the bond market is figuring out that the Fed will need to keep rates MUCH higher for MUCH longer. And this brings us to #2 in our list above.

Stocks are in for a world of hurt.

Stocks are priced based on Treasury yields. This is one of the primary reasons why stocks remain down almost 10% from their all-time highs despite the fact the economy is growing. After all, if you can earn 5.25% risk free in bonds for two years, why risk putting your money into much riskier stocks where both the earnings yield AND the dividend yield are lower (4.07% and 1.62%, respectively).

The great crisis of our lifetimes is fast approaching.

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The long term U.S. Treasury bubble burst in 2022. And the crisis is now approaching.

Smart investors are already taking steps to prepare for this.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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Buckle Up, Things Are About to Get MESSY

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By Graham Summers, MBA

The yield on the all-important 10-Year U.S. Treasury is spiking again. As I write this, it’s about to take out its former highs.

There are no shortage of reasons.

First and foremost, Inflation remains HOT.

Mainstream economists have been high-fiving one another because CPI is now 3.7%. Apparently the fact prices are still rising but at a slower pace is some kind of BIG WIN for the Fed. For those of us who live in the real world, the fact that prices are still rising by this much despite the Fed embarking on its most aggressive monetary tightening in decades is not a good thing.

And bond yields know it.

Bond trade based on many things including inflation expectations. In this light, the fact inflation is proving this difficult to slay is yet another reason bond yields are spiking higher: they know the Fed will have to do more.

The second reason why yields are spiking is that there is still too much excess liquidity in the financial system. Banks are still parking over $1.2 TRILLION at the Fed every night. This is a clear signal banks have too much extra capital/ liquidity lying around.

And finally, there’s the the ENORMOUS deficit that the Biden administration has been running since President Biden took office. Indeed, Bidenomics should be renamed SPEND-onomics as the federal government is running its largest deficit as a percentage of GDP outside of WWII.

All this spending requires the Treasury to issue massive amounts of debt. Basic economics tells us that the more of something there is, the less it’s worth. This is why U.S. Treasuries are worth less and hopefully won’t become worthless.

The below chart is truly horrifying. It tells us that the fuse is lit on a $33 trillion debt bomb.

The great debt crisis of our lifetimes is fast approaching.

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The U.S. Treasury bubble burst in 2022. And the crisis is now approaching.

Smart investors are already taking steps to prepare for this.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: 

https://phoenixcapitalmarketing.com/BM.html

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When It Comes to Debt, the U.S. Has Chosen Option Two

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By Graham Summers, MBA

As I noted yesterday, the great debt crisis of out lifetimes is approaching.

The U.S. is now adding debt at an exponential rate. The U.S. racked up its first $10 trillion in debt over the course of 232 years. Following the Great Financial Crisis, it added another $10 trillion in just nine years. The next $10 trillion took only four years.

And by the look of things, the next $10 trillion will take even less than that. The U.S. has added $2 trillion in debt in the last four months. We’re now adding $1.2 billion in debt per hour.

How will this play out?

Well there are three ways to deal with a major debt problem.

1) Pay it back.

2) Inflate it away.

Guess which one policymakers have opted for? 

Why did they spend $8 TRILLION in the span of just 24 months from 2020

Why else is the U.S. running its largest fiscal deficit as a percentage of GDP outside of WWII… despite the fact the economy is still growing!?!

Why else is the Fed providing over $1 TRILLION in reverse repo liquidity schemes to the financial system every single night… despite the fact the financial system isn’t in a crisis?!?

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.To pick up your copy, swing by: https://phoenixcapitalmarketing.com/BM.html

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The Great Debt Crisis of Our Lifetimes is Approaching…

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By Graham Summers, MBA

The great debt crisis of out lifetimes is approaching.

The U.S. has now reached the point at which it is adding debt at an exponential rate.

It took the U.S. 232 years to rack up its first $10 trillion in debt. Thanks to the Fed’s egregious monetary policies following the Great Financial Crisis, the U.S. added another $10 trillion in debt in just nine years as the government went on a spending spree.

It’s added another $10 trillion in a little over FOUR years, thanks to the insane spending the U.S. implemented following the pandemic.

And the pace is only accelerating.

In June of this year, the U.S. had $31 trillion in debt. Today, it’s over $33 trillion. So we’ve just added another $2 trillion in a little over FOUR MONTHS.

And the Fed is confused as to why U.S. Treasuries are collapsing!?!

Basic economics tells us that the more of something there is… the less value it holds. Small wonder then that as the U.S. issues more and more debt, the debt is collapsing in value.

Below is a chart of the long-term U.S. Treasury ETF (TLT). It needs no explanation.

Again, the great debt crisis of our lifetimes is fast approaching.

In 2000, the Tech Bubble burst.

In 2007, the Housing Bubble burst.

The U.S. Treasury bubble burst in 2022. And the crisis is now approaching.

Smart investors are already taking steps to prepare for this.

I’ve identified a series of market events that unfold before every crash.

I detail them, along with what they’re currently saying about the market today in a Special Investment Report How to Predict a Crash.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.

https://phoenixcapitalmarketing.com/predictcrash.html

Graham Summers, MBA

Chief Market Strategist

Phoenix Capital Research

Three Questions to Ask Any Guru Opining on the Situation in the Middle East

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By Graham Summers, MBA

War has broken out in the Middle East.

As usual, everyone is attempting to have an “expert” take on this situation. The reality is that less than one in 10,000 of the people speaking on this stuff have any idea what they are talking about. And unfortunately this goes for the actual experts with degrees and pedigree.

Before listening to anyone opining on this conflict, ask yourself the following three questions:

1) Does this person know what kind of government the country or countries involved has? (parliament, congress, neither, theocracy, etc).

2) Could this person find the countries in question on a map?

3) Can this person name the leaders of the countries in question?

If the answer to all three of these isn’t YES, then ignore anything else this person has to say. If they’re too lazy to even spend five minutes learning the basics, then they’re just another fake guru trying to act like they’re omniscient. 

With that in mind, I’m staying in my lane and focusing on the markets today. I’m doing this not because I don’t care about the people under attack, nor is it because I’m insensitive to the situation… I’m doing this because I’m not an expert on the middle east and have nothing to add in the way of quality insights.

What I did note however was the stock market bounced hard from the initial sell-off yesterday and closed out the day at the highs. This is quite bullish given that the geopolitical situation. 

From a purely technical analysis situation, stocks bounced HARD off the 200-day moving average, or DMA, as represented by the green line in the chart below. The door is now open to a run to the 50-DMA as represented by the red line in the chart below. 

The key however is what happens to bonds. 

The bond market was closed yesterday. So we need to assess how bonds act today now that they’re trading again. If yields break to new highs, then something BAD is coming for the stock market in the next few weeks.

Again, everything hinges on what bonds do. Bonds are the reason stocks rallied from 2020 to 2022. They’re the reason stocks crumbled from March 2022 to October 2022. So whatever happens in bonds will dictate what’s coming for stocks.

The key however is what happens to bonds. 

The bond market was closed yesterday. So we need to assess how bonds act today now that they’re trading again. If yields break to new highs, then something BAD is coming for the stock market in the next few weeks.

Again, everything hinges on what bonds do. Bonds are the reason stocks rallied from 2020 to 2022. They’re the reason stocks crumbled from March 2022 to October 2022. So whatever happens in bonds will dictate what’s coming for stocks.

For more market insights and analysis, join our free daily market commentary Gains Pains & Capital. You’ll immediately start receiving our Chief Market Strategist Graham Summers, MBA’s briefings to your inbox every morning before the market’s open.

And if you sign up today, you’ll also receive a special investment report How to Time a Market Bottom that the market set-up that has caught the bottoms after the Tech Crash, Housing Bust, and even the 2020 pandemic lows.

This report usually costs $249, but if you join Gains Pains & Capital today, you’ll receive your copy for FREE.

To do so…

https://phoenixcapitalmarketing.com/TMB.html

The Bears Failed, Again… So What’s Next For the Markets?

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By Graham Summers, MBA

Try as they might, the bears simply couldn’t get it done last week. 

The S&P 500 spent a few days chopping around its 200-day moving average (DMA) before spiking higher on Friday. Much of this late week rally was short covering, but the fact remains that sellers simply didn’t have what it took to push stocks any lower.

Indeed, the biggest news as far as stocks were concerned was the fact that the tech-heavy NASDAQ simply refused to take out support at 13,000. 

Tech is a long-duration sector of the market… meaning it is heavily influenced by long duration bonds. The reason for this is that your typical tech start-up will take years before it brings a product or service to market and starts generating cash flow. So when you’re modeling a tech company’s future cash flows, you need to be thinking five years out or more. This means comparing a tech company’s future earnings against what you’d earn from owning a risk-free U.S. Treasury over the same time period.

Simply put, the tech sector is heavily influenced by what long-duration bonds do… which is why it’s truly astonishing that the NASDAQ has refused to break down despite the fact the yield on the 10-year U.S. Treasury spiked to new highs. The fact that stock market bears failed to crush tech is really quite bullish and a significant “tell” for the markets.

With all of this in mind, it’s quite possible stocks bottomed last week or will bottom this one. I remain concerned about a number of risks to the markets, but we have to respect price action. And price action tells us that stocks are strong in spite of many issues. 

For more market insights and analysis, join our free daily market commentary Gains Pains & Capital. You’ll immediately start receiving our Chief Market Strategist Graham Summers, MBA’s briefings to your inbox every morning before the market’s open. Since 2015, Graham has shown investors a win rate of 75% meaning they made money on three out of every four positions closed.

And if you sign up today, you’ll also receive a special investment report How to Time a Market Bottom that the market set-up that has caught the bottoms after the Tech Crash, Housing Bust, and even the 2020 pandemic lows.

This report usually costs $249, but if you join Gains Pains & Capital today, you’ll receive your copy for FREE.

To do so…

https://phoenixcapitalmarketing.com/TMB.html

Stocks Bounce…But Is the Bottom In?

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By Graham Summers, MBA

Bonds finally bounced yesterday. However, the bounce was relatively weak and didn’t signal the “all clear.”

Simply put, things stabilized. But they didn’t actually improve much. And market leading indicators suggest this correction isn’t over yet.

High yield credit typically leads stocks both the upside and the downside. It bottomed weeks before stocks did in October 2022. And right now, it’s telling us the S&P 500 could easily go to 4,100.

Breadth is another market leading indicator I watch. And it is also telling us stocks are not finished falling just yet. Again, I don’t trust this bounce in stocks at all.

Again, the long-end of the Treasury market has completely collapsed. Banks and financial entities are sitting on hundreds of billions of dollars worth of losses. As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching. The time to prepare is NOW, before it hits.

As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching. The time to prepare is NOW, before it hits.

I’ve identified a series of market events that unfold before every crash.

I detail them, along with what they’re currently saying about the market today in a Special Investment Report How to Predict a Crash.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.

https://phoenixcapitalmarketing.com/predictcrash.html

Graham Summers, MBA

Chief Market Strategist

Phoenix Capital Research

If This Were a Stock… You’d Think “GAME OVER.”

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By Graham Summers, MBA

Everyone is applauding the short-term deal to keep the government open for another 45 days.

Well, everyone except the bond market, that is.

The bond market, specifically, the market in U.S. sovereign bonds or Treasuries is the single most important market in the world. Everyone focuses on stocks, because stocks are “exciting” and the best investment for obtaining wealth. 

However, the dirty little secret of the investing world is that MOST if not all of the gains from stocks are the result of the bond market. Remember, Treasuries are the bedrock of our current financial system; the yields they pay are the risk free rate of return against which all risk assets (stocks) are priced.

So if bonds blow up, you can kiss the stock market goodbye.

And thanks the the insane amount of spending the Biden administration is engaged in, bonds are about to blow up. Indeed, Bidenomics should really be retitled “debt-o-nomics” because it’s debt, not any kind of economic know-how from the Biden White House that is driving all of this stuff.

Case in point, the U.S. is currently running its largest deficit as a percentage of GDP in history outside of WWII. Bear in mind, this isn’t during a recession. The Biden White House is spending like this while the economy is technically still growing!

Basic economics tells us that the more of something there is, the less value it has. And thanks to the Biden Administration’s spending insanity, the U.S. is issuing a LOT more Treasuries. And that means… you guessed it… Treasuries are being valued as worth less.

Below is a chart you won’t see on CNN or the Mainstream Media. This is a 40+ year chart of the 30-Year U.S. Treasury. If this were a stock, you’d look at this chart and think “GAME OVER.”

As I keep warning, the Great Debt Crisis of our lifetimes is fast approaching. The time to prepare is NOW, before it hits.

I’ve identified a series of market events that unfold before every crash.

I detail them, along with what they’re currently saying about the market today in a Special Investment Report How to Predict a Crash.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.

To pick up your copy, swing by:

https://phoenixcapitalmarketing.com/predictcrash.html

Best Regards

Three Charts Every Investor Needs to See Today

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By Graham Summers, MBA

Stocks broke down badly over the last two days.

The line in then sand for the S&P 500 was 4,460. Stocks broke through it on Friday. They failed to reclaim it yesterday. This is quite bearish.

Unfortunately, there’s more room to go for this drop. High yield credit which usually leads stocks is showing us what’s coming.

The picture is even uglier when we take a look at market breadth. Again, this usually leads the index.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

Normally this report would be sold for $249. But we are making it FREE to anyone who joins our Daily Market Commentary Gains Pains & Capital.

To pick up your copy, swing by:

https://phoenixcapitalmarketing.com/BM.html

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