Mid-Week Macro (10/23/2024)

Mid-Week Macro

1) The everything melt-up in gold/silver/miners and the S&P 500 had been going strong. This week that has slowed down. The S&P was down today about 1%, and gold dropped $30 and silver $1. As I have warned, when the S&P rolls over, gold and the miners will go with it to a certain degree. Heading into the election in two weeks, I think it is time to be cautious about buying miners. I think November is going to be volatile. 

2) November is the key month for 2024 for Wall Street and this 15-year bull market. There is bullishness that no matter who wins, this rally on Wall Street continues, and we have a strong end-of-year rally. I’m not in that camp. I think it all comes crashing down after the election. 

3) Wall Street thinks the economy is strong. I call BS. Restaurants and retail outlets are closing. Consumers can’t pay their bills. Housing is unaffordable. Banks may have reported good Q3 earnings, but they continue to be pressured by CRE (commercial real estate), credit card delinquencies rising, auto loan delinquencies rising, and the potential for a flat yield curve. Exactly where are these so-called strong sectors of the economy? It won’t take much to push it into a recession. 

4) Gold is the flashing red light. Why is it at an ATH if the economy is strong? What is gold sniffing out? I’ll give you a hint: it isn’t good. Wall Street is expecting strong earnings in 2025 to keep this stock market up, which is already trading at a 21-forward PE. They think more rate cuts will ignite earnings. Good luck with that.