Asides

The media has officially called the election for Joe Biden, despite the fact he has yet to actually win anything.

As I’ve noted previously, unless President Trump formally concedes, Joe Biden is NOT the President elect until December 14^th at the earliest (that’s when states formally cast their electoral college votes).

Note that the words “media” are not used anywhere in the above paragraph. The media has no say in how elections turn out. And similarly, they have no idea what they’re talking about in terms of who will ultimately win the election.

I say this because the media has begun to claim that every market rally is due to Joe Biden saying or doing something. The media is literally acting as though Biden is now directing the stock market as President of the United States.

But the global markets actually say otherwise.

Regardless of your political affiliation, I believe that practically everyone can agree that President Trump was the first anti-China President in the last 40 years. He most certainly was more anti-China than Joe Biden, who was openly critical of President Trump’s trade war and tariffs. 

And then of course, there is the fact that the Biden family has received millions if not billions of dollars in financing from Chinese business and government-linked entities over the years.

With that in mind, I want to point out that China’s stock market is struggling to make new highs. It initially exploded higher the day after the election when the media called the win for Joe Biden (blue circle), but since that time, it’s basically flatlined (red circle).

If Joe Biden was definitely winning the Presidency, which would mean an end to the Trade War between the U.S. and China, shouldn’t China’s stock market be exploding higher?

With that in mind, I stand by my original forecast that President Trump will end up winning this election. And our clients are already preparing for this with our new special report titled…

The MAGA Portfolio: Five Investments That Will Make Fortunes During Trump’s Second Term.

In it, we detail five unique investments that we expect will produce the most extraordinary gains during President Trump’s second term.

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Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

If you want to get your head around the ultimate outcome of the 2020 Presidential election, you should ignore the media, experts, pundits, and focus on one thing.

 The energy sector.

Unlike the pundits, experts and shills in the media, energy investors LOSE money if they’re wrong. They have “skin in the game” so to speak. And because of the distinct differences between the Biden and Trump campaign’s views on oil, the energy sector is an incredible barometer for how things are going with the election.

From a 20,000-foot perspective, this Presidential election is about globalism vs. nationalism.

Globalism, as represented by the Biden campaign, represents the dominant economic trend of the last 40 years. Its key features involve:

1)    The outsourcing of Americans jobs to cheaper, international labor markets.

2)    The U.S. relying extensively on other nations for its energy, commodity, and other needs.

3)    The U.S. as one of several key nations that set global policy via international bodies (the U.N. the G-7, etc.).

By way of contrast, Nationalism, as represented by the Trump administration, represents a complete refutation of Globalism. Its key features involve:

1)    That the domestic production of resources deemed critical to the U.S. economy is a matter of national security.

2)     That outsourcing weakens the U.S. economy from a strategic perspective as it shifts its industrial and manufacturing supply chains to other nations. 

3)    That the U.S. is THE dominant force in the world and as such can set global policy regardless of what other nations desire.

In far simpler words, a Biden win would be BAD for oil production in the U.S., while a Trump win would be GOOD for oil production in the U.S..

With that in mind, take a look at this chart.

Going into election night, the energy sector was in a decided downtrend (blue line) as it looked like Biden would be the presumed winner. However, on election day this trend began to end with energy stocks actually breaking out of this downtrend briefly (red circle).

This suggested that in point of fact, President Trump would potentially pull another historic upset.

We all know what has since happened: the media has declared Biden the winner despite a number of voting irregularities surfacing (and that’s putting it mildly). The media has made it clear that it believes Biden won.

But what is the energy sector telling us?

Energy stocks are up 15% since election night. That is an incredible move. And if you find that surprising, consider the following.

The energy sector is top performing sector since election night.

I don’t know about you, but it sure seems as if energy investors are predicting a Trump win. Nowhere in Joe Biden’s campaign platform does he advocate for the increased production of oil in the U.S.. In fact, on his website he actually endorses the Green New Deal, which advocates for the U.S. completely moving off of fossil fuels!

With that in mind, what do you think energy stocks are telling us today?

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The U.S. is in very serious trouble.

The integrity of the U.S. election has been damaged, possibly irreparably. There has been clear and obvious fraud. And everyone who isn’t a partisan hack knows it. Regardless of your political views, it is very clear that NONE of this looks appropriate.

In the last five days we’ve seen:

1. Multiple states stop counting votes on election night.
2. Multiple states find tens of thousands of votes that benefit Joe Biden to a degree that is statistically impossibly.
3. Clear examples of dead people voting.
4. Counties in which more people voted than were registered.
5. States called for Biden when a ridiculously low percentage of votes were counties (Virginia 1%, Arizona 7%, etc.).

Regardless of whether you’re a Democrat or a Republican, you cannot with a straight face say that this doesn’t look suspicious. And that’s putting it mildly.

The bigger issue, outside of who actually wins the election, is the fact that the election system has been compromised. That is a MAJOR problem for the Republic.

And the markets know it.

This is why the $USD is rolling over and plunging: capital is reacting to the discovery that the U.S. is now closer to a banana republic than a legitimate first world nation.

That move doesn’t seem like a big deal, unless you understand the significance of the currency markets.

The financial media like to focus on stocks because they are an extremely volatile asset class. This volatility makes stocks seem “sexy” because entire fortunes can be made… or lost… within a matter of weeks.

However, the reality is that stocks are actually one of the smallest asset classes on the planet.

Globally, the stock market is around $80 trillion in size.

That sounds like a huge amount… until you realize that the bond market is more than THREE times this at $244 trillion.

And the currency markets dwarf even the bond markets!

While it’s impossible to know their full size (every currency trade involves two currencies, so the net size is impossible to measure), we do know that the currency markets trade an astonishing $6.6 trillion per day.

To put this into perspective, the New York Stock Exchange – the single largest stock market in the world – typically trades just $200 billion in volume per day.

Put simply, the currency market, based on volume alone, is 33 times larger than the stock market. The U.S. dollar ($USD) is the reserve currency of the world. And the $USD, is the 800-lb gorilla in this market, accounting for over 90% of all currency transactions.

It also accounts for over 60% of all central bank foreign exchange reserves, while nearly 40% of all global debt is denominated in the $USD.

Put simply, the $USD is THE single most important asset in the entire global financial system, the currency of choice for global central banks and global corporations looking to issue debt.

And the $USD is backed by the single largest economy in the world, representing ~25 of global GDP, along with the U.S. military which has a budget equal to that of China, India, Russia, Saudi Arabia, France, Germany, United Kingdom, Japan, South Korea, and Brazil – combined.

Put simply, whatever happens to the $USD will have systemic implications for the world. So, if the $USD is breaking down because the U.S. Presidential election debacle is signaling that the largest economy in the world is becoming a banana republic, it is a VERY bad thing.

In this environment, everyone should have some exposure to gold. Indeed, it is not surprising that In this environment, everyone should have some exposure to gold. It is not coincidence that the precious metal is EXPLODING higher on this development.In this environment, everyone should have some exposure to gold. Indeed, it is not surprising that

On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We are making just 100 copies available to the public.

As I write this there are just 9 left.

To pick up yours, swing by:

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Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

There’s a saying that “in bull markets, stocks don’t sell off on bad news.”

I mention this because the latest jobs data is out and it’s horrific.

Another 4.4. million Americans have filed for unemployment bringing the total the number of unemployed to 26 million.

These are DE-pression type numbers.  And yet stocks are holding up despite these numbers.

The S&P 500 last peaked on April 17^th 2020. Despite a rash of horrific economic data, the index has barely fallen 6%.

As investors, we have to trade the markets as they are… not as we wish they were. And the market is holding up shockingly well given what’s happening in the world.

Remember, “in bull markets, stocks don’t sell off on bad news.”

What’s even more shocking is the fact that ENERGY stocks are UP more than the broader market this month.

That’s not a typo, the Energy ETF (XLE) is up 16% while the S&P 500 is up 8% in April. And this is happening at a time when Oil prices dropped to NEGATIVE $40!

This again suggests we are entering a bull market. In bull markets, stocks don’t sell off on bad news. The news lately is horrific, and stocks aren’t selling off.

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The Everything Bubble Has Burst… Now Comes the Inflationary Storm

The coronavirus has burst the Everything Bubble.

Regardless of what happens with the economy or the virus, the damage has been done to the massive debt bubble. Across the board, credit and debt markets have ended their bull markets.

To fight this situation, the Fed has gone NUCLEAR with monetary policy. In the last three weeks, the Fed has:

1)    Cut interest rates from 1.25% to 0.15%.

2)    Launched a $1 5 trillion repo program.

3)    Launched a $700 billion QE program.

4)    Begun buying commercial paper debt instruments.

5)    Opened the discount window to the eight largest banks in the US.

6)    Opened dollar swaps with international central banks.

7)    Opened credit windows to the money market funds market.

If these policies sound familiar, it’s because the Fed basically just ran through its entire 2008 playbook. The big difference this time is that instead of taking a year to do this like it did in 2008, the Fed ran through all of these polices in less than a month.

Thus far, none of these policies have worked.

As I write this Friday morning, stocks have yet to stage a meaningful bounce. As a result, we are now seeing calls for the Fed to start buying corporate debt and municipal debt.

We are also now beginning to see talk of helicopter money being implemented as well, including mailing checks to people who cannot work due to the coronavirus. This combined with various stimulus programs will mean TRILLIONS being injected directly into the financial system.

This is all going to unleash inflation.

Bond yields have begun rising, suggesting the bond market is beginning to discount inflation hitting the financial system.

This is telling us that the first round of the crisis, the deflationary collapse, will be ending. But the second round, the INFLATIONARY tidal wave, is only just beginning.

We just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay ou as it rips through the financial system in the months ahead

The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.

We are making just 100 copies available to the public.

To pick up yours, swing by:

https://www.phoenixcapitalmarketing.com/inflationstorm.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research