May 30, 2025

 

(SUMMARY OF JOHN’S MAY 28, 2025, WEBINAR)

 

TITLE – Topping out

TRADE ALERT PERFORMANCE

May MTD = -2.43%

2025 Year to Date = +25.79%

Since inception = +777.86%

Trailing One Year Return = +83.00%

Average Annualized Return = +50.46%

 

PORTFOLIO REVIEW

Risk On

(MSTR) 6/$330-$340 call spread (closed May 28)

Risk Off

(GLD) 6/$275-$285 call spread

(SPY) 6/$650-$660 call spread

(MSTR) 6/$500-$510 put spread

(MSTR) 6/$470-$480 put spread

(AAPL) 6/$220-$230 put spread

(QQQ) 6/$540-$550 put spread

All positions valued at 10%

 

THE METHOD TO MY MADNESS

Stocks are topping out, awaiting either good or bad news.

US Bond auction failure delivers another $1,000 point down day for the Dow.

As the National Debt accelerates it is going to present an increasingly difficult ceiling for stock prices.

As US credit quality declines, interest rates will rise.

The top technology stocks will lead all rallies.

Safety assets like gold will remain in demand.

Oil is bouncing along a bottom on recession fears.

US dollar hits new two-year lows.

THE GLOBAL ECONOMY – SLOWING

Consumer sentiment crashes, with the second lowest reading in 73 years at 50.8.  One year inflation expectations at 7.3%.

US Import prices rise as tariffs kick in.  Import prices gained 0.1% last month after dropping 0.4% in March.

Retail sales crater, gaining 0.1% in April from March.

Global shipping rates are soaring, because of the on-again, off-again trade war.

German car importers taking the biggest trade war hits because they have the lowest US factories.

US producer prices unexpectedly declined in April by 0.5%, the weakest in five years, largely due to a slump in margins.

Inflation comes in cool at 2.3%.

 

STOCKS – TOPPED OUT

Walmart is planning mass layoffs – some 1,500 jobs as demanded by the high prices brought by the trade war.

Investors flock to non-US equity funds, pouring $2.5 billion into ex-US mutual funds and ETFs.

It’s the highest inflow on record and reverses a three-year trend.

Confidence in the UD is falling as long as it is demolishing the economies of foreign trading partners.

Here is a trade war proof stock for you -> Netherlands-based Heineken (HEINY) is the world’s second-largest brewer after Anheuser Busch.

Netflix (NFLX) tops $500 billion in market cap – up 23% since the April 2 market bottom.

Volatility Index ($VIX) recovers from $17-$22.

Dick Sporting Goods takes over Foot Locker (FL).

United Health Care (UNH) investigated for Medicare Fraud.

Say goodbye to the EV tax credit, long a major incentive for car buyers.

 

(The “Sell America” thesis is continuing to punish stocks and bonds.  We need a catalyst to break this narrative.  Thursday morning, my time, we may have just received it – the Federal Trade Court has blocked Trump’s reciprocal trade tariffs.  Details are sketchy, but the announcement was enough to surge futures higher on the S&P 500 and the Nasdaq.  As always, the devil will be in the details.  Let’s wait and see.  And just like that, the administration responded, and Trump’s tariffs were reinstated by the appeals court.   We wait for the next announcement.

 

For a stock that appears to be a “money-machine”, John says look at scaling into Visa (V).  (I recommended this stock on October 25, 2023, when (V) was at $235.00.  It remains in our portfolio.)  Another stock that appears to be recession-proof is Netflix (NFLX).  If you don’t already own it, wait for some kind of retracement before you scale in.  I first recommended Netflix (NFLX) on January 17, 2024, when it was $480.00.  Since that time, I have recommended several “scale into” price points in the stock.

 

 

John’s downside targets for the S&P 500.

Funds have flowed out of the U.S. and into Europe. And most specifically into Germany…

 

 

…and Emerging Markets.

 

 

BONDS – “SELL AMERICA” IS BACK

Moody’s downgrades United States credit, citing budgetary burden the government faces amid high interest rates.

Treasury Bond Yield Spike, with ten-year yields hitting 4.6%.

Wall Street’s shows worry about a ballooning deficit that threatens America’s status as a safe haven.

A $16 billion Treasury sale of 20-year bonds bombed.

A foreign boycott was a major issue.

The prospect of a House bill that could add up to $16 trillion to the national debt over the next 4-10 years has sent all asset classes into free fall, except for gold.

The 60/40 portfolio is dead for now, with both stocks and bonds going down at the same time.

The Bond Vigilantes are back and are not to be taken lightly, as seen by yesterday’s failed auction of 20 US Treasury bonds.

Avoid (TLT), (JNK), (NLY), (SLRN), and REITS

If you are challenged by all the uncertainty in the markets – (who isn’t?) – then John suggests looking to 90-day T-bills yielding 4.4% at the present time.  John points out that if you buy bills that expire in January, you don’t have to pay tax on the income until 2027 – maturity date is the year it is taxable.

 

FOREIGN CURRENCIES – NEW LOWS

US dollar hits two year low, as the “Sell America” trade continues.

It’s almost unprecedented for a currency to fall when its interest rates are rising.

Debt, default, and trade wars are now the larger concern.

Next dollar weakness will come with evidence of a recession in days.

Buy (FXA), (FXE), (FXB), (FXC), and (FXY)

 

ENERGY & COMMODITIES – LOOKING FOR LOWS

The Shale Oil boom is over.

Due to tax-subsidized US over-production.

Weak Chinese consumption.

Recession fears.

As a result, oil companies are scaling back capital investment.

Texas, Oklahoma, and Louisiana will get hit the hardest.

Administration pushes US nuclear industry, which had been slowed by safety regulations.

Buy Cameco (CCJ) and Vistra (VST)

 

PRECIOUS METALS – ANOTHER RUN

Gold jumps 1% on US Bond Downgrade.

Credit downgrades and eventual default have been the dream of gold bugs for the last 50 years.

Gold is the last flight to safety asset.

John’s target is still $5,000.

Q1 Gold inflows hit a three-year high, according to the World Gold Council.

Gold ETFs saw an inflow of 226.5 metric tonnes worth $21.1 billion in the first quarter.

Central bank buying and Chinese savings demand continues unabated with China devaluing its currency.

Keep buying all (GLD) metal dips.

 

John informs us that the U.S. won’t go back on the gold standard.  It places restrictions on the economy and the Government’s ability to borrow and spend money, so it’s inflexible in challenging economic periods.  Mining gold is also costly, and under the gold standard, the supply of gold cannot keep pace with its demand. Nixon took us off the gold standard in 1971.

And for all those wondering why silver hasn’t moved up yet – you need to remember silver is tied to the economy.  Solar is set to lose subsidies; nobody buys jewellery in recessionary periods, and central banks buy gold, not silver.

John has a $200 price target on Wheaton Precious Metals (WPM).

Platinum has seen massive Chinese buying. In addition, there is a structural shortage building in platinum.  Look at the chart here. (I recommended getting into Platinum on May 19 – please re-visit my Post.)

 

 

REAL ESTATE

New Home Sales hit a three-year high, up 10.9%, but rising mortgage rates and economic uncertainty remained headwinds.

Existing home sales hit 16-year low, down 0.5% to 4 million units.

Inventory jumped 9% MOM and 21% YOY.

That is a 4.4- month supply, a five-year high.

The median home price is at $414,000, up 1.8% YOY.

First-time buyers accounted for 30% of the sales.

Homes over $1 million are doing better, up 6% YOY.

The cancellation rate doubled due to the stock market crash.

Home inventories rise 18% YOY to the highest levels since pre-pandemic.

 

TRADE SHEET

Stocks – sell rallies

Bonds – stand aside

Commodities – stand aside

Currencies – buy dips

Precious Metals – buy dips

Energy – stand aside

Volatility – sell over $50

Real Estate – stand aside

 

NEXT STRATEGY WEBINAR

12:00 EST Wednesday, June 11, 2025, from Incline Village, NV.

 

 

Cheers

Jacquie