MDM has switched to a BUY signal.
Financials have been strong, and two measures of inflation (CPI, PPI) at the core level came in above estimates, yet major averages S&P 500 and NASDAQ Composite rallied on volume, a sign of strength. Part of the optimism may be due to Trump's pro-business/lower tax stance. CME FedWatch currently predicts one rate cut this year. But GDP growth and the jobs data remain decent in part due to material productivity created by AI. Further, stealth QE remains in place thus the Fed does not have to formally launch QE since its stealth version has been in place to service record levels of debt and other unfunded liabilities. Thus global liquidity remains intact. The question is its rate going forward which will be determined by QE in all its forms which include interest rates.Ray Dalio in the latest chapters from his latest book outlined a path for the US government to dig its way out of the debt crisis. A large (3% of GDP) deficit cut is required. This could be achieved by making the adjustments come roughly equally from spending cuts, taxes, and interest rate cuts. That would take about a 4% cut in spending, a 4% increase in taxes, and a 1% cut in real interest rates. Elon Musk's $1 trillion in cuts would achieve a 3% cut in spending. This is down from Musk's original and lofty $2 trillion. Dalio points out a 3% reduction or more can be achieved. Further, a 1% cut in interest rates would certainly be bullish for markets and for liquidity. Dalio says even though the Fed says they are not political, deals have been and can be reached.
Suggested ETFs (Note: Many members buy the standard ETFs or their preferred ETFs. This list serves as a guide as to which ETFs we think may outperform, but the key point is to be on the right side of the market regardless of which ETF or ETFs one chooses.)
1-times
SPY (S&P 500)
QQQ (NASDAQ-100)
2-times
SSO (S&P 500)
QLD (NASDAQ-100)
3-times
UPRO (S&P 500)
TQQQ (NASDAQ-100)
TECL (Direxion Trust Technology)
NOTE: This is a suggested list. Investors may wish to become acquainted with the full range of available ETFs, and should make an effort to understand how these ETFs are created and what their components are, as well as being aware of the downside risks involved, especially with leveraged ETFs. Certain ETFs may be more appropriate depending on one's risk tolerance levels. Typing in keyword 'ETF' into the FAQ keyword search bar or going here https://www.virtueofselfishinvesting.com/faqs/search?p=1&q=etf and visiting this site https://etfdb.com/ can be instructive.