Kevin Ludolph Current Views

Kevin Smith shared his macro views on TD Ameritrade Network. “We are committed to our bearish positioning here given the huge number of macro signals that we have today pointing to a downturn.”

Tavi Costa Current Views

Libor vs. Shibor spread spiking again and now at its highest level since the GFC! You think the Fed is turning dovish? The PBOC has taken it to a whole new level. At the current policy rate differential, USDCNY should be well above 7 already.

Tavi Costa Current Views

Only three other times in history precious metals surged while oil plunged! All of them happened during severe bear markets and recessions. Buckle up, folks.

Kevin Ludolph Current Views

Kevin Smith discusses the first quarter GDP report and the underlying cracks beneath the surface with Oliver Renik from the TD Ameritrade Network.

Kevin Smith Current Views

$GOOGL = $SPX Alphabet down 7.4% after hours, after big miss.

Kevin Ludolph Current Views

Russell 3000 to silver ratio now near record levels! Double top formation after a retest of peak tech bubble levels? Stunning how historically depressed a “high beta” safe haven asset is this late in the cycle. New Crescat video out: https://www.youtube.com/watch?v=zoDePDL2etE&t=2s

Kevin Ludolph Current Views

Market sentiment is bullish as hell on the idea that ‘central banks got your back’. But do they really? Perhaps they have created the biggest debt and asset bubbles yet assuring that the business cycle is alive and well. Here is why we are net short: https://tdameritradenetwork.com/video/rB4AoWmoG5SBacr3VyQI5A

Kevin Ludolph Current Views

Not a pretty picture for US stocks going into earnings season.

Kevin Ludolph Current Views

GDPNow (YoY) is signaling the worst US economic environment since 2015, the year of the China currency mini-devaluation, oil crash, and EM meltdown. The US stock market is levitating while many economic indicators are turning down. Bear market rally looks done.

Kevin Ludolph Current Views

Just one way to visualize today’s asset bubbles only beginning to burst. MMT: The idea that such imbalances can be permanently sustained through money printing without business cycle downturns or inflation. An absurd idea. Not modern at all. Poised to fail as throughout history.

Tavi Costa Current Views

Massive alligator mouth divergence between US twin deficits and stocks. The government budget and current account imbalance is now close to 8% of GDP! Eventually this is going to matter and should be negative for stocks.

Tavi Costa Current Views

This is now the widest drop in Consumer Confidence Present Situation vs. Expectations since the Tech Bust. Every other cyclical decline in the past 50 years led to a recession. Full credit to John Hussman for sharing another insightful analysis.

Tavi Costa Current Views

36% of the US yield curve is now inverted across 30-year to overnight rates! It is just as high as it was at the start of the tech and housing busts. This is not another 2016 soft landing scenario. Watch what the credit market is telling us.

Tavi Costa Current Views

3 and 5-year yields just dipped below Fed funds rate for the first time since the global financial crisis and the tech bust. In 2000, that coincided with the market top. 2006 was at the beginning of the housing bust. The gold-to-S&P 500 ratio ripped up both times.

Tavi Costa Current Views

Another key indicator signaling recession ahead: The correlation between utilities and treasuries has just turned negative again. It’s a battle of safe-havens that sounds an alarm when credit and equity markets diverge. Are we dipping into the bloody pool again?

Tavi Costa Current Views

Australia now offering 10-yr sovereign bonds at a lower yield than Fed funds overnight rate. Just happens to be the case that last two times these rates got inverted we were at the very end of an Asian economic cycle and right at the peak of the US tech bubble.

Kevin Ludolph Current Views

A major disconnect: The more cash $NFLX was projected to burn, the more its stock price went up for four years. Now, the company is raising prices, but costs are going up too. Will it ever be able to monetize or is this just a QE bubble stock destined to deflate?

Kevin Ludolph Current Views

Over 80% of all non-financial stocks in Canada lost money on a free cash flow basis in the last 12 months! Australia, US and Asian countries aren’t too far behind. This is not a picture of a healthy global economy.

Kevin Ludolph Current Views

S&P 500 lagging to the downside. Steepest, late-cycle plunge in the Citi Global Earnings Revision Index ever. Started from record valuations. The early dip buyers could be getting set up for the slaughter.

Tavi Costa Current Views

S&P 500 vs. utilities correlation rising after reaching its most negative level since the start of the tech bust & GFC! It’s how bear markets manifest: First, the S&P 500 gets wobbly but utilities rise. Then, S&P 500 crashes and utilities relent. Look for utes selloff next.

Kevin Smith Current Views

Normally, S&P 500 bear markets coincide with budget deficits. This time, deficit spending has goosed the market late in the business cycle. How ugly will it be for both the market and the budget deficit when the normal correlation resumes? $SPX $SPY

Tavi Costa Current Views

Critical macro moves happening again today: Gold up; Chinese yuan down. $XAUCNH up. Further confirmation that the record positive correlation between gold & yuan is unsustainable. When emerging market credit bubbles burst, gold prices rise in local terms.

Tavi Costa Current Views

It’s hard to believe the cost of capital remains so cheap for such an unprofitable industry. Every time WTI approached $50 in the last oil bear market, energy junk bonds yielded close to 8%. At similar oil prices today, these yields still have much further to rise.

Tavi Costa Current Views

Gold to oil ratio continues to break out with authority. Watch for this ratio. As I said in Nov. 20, previous breakouts coincided with equity market declines. It sends a contradictory signal to this recent melt-up in the S&P 500.

Tavi Costa Current Views

Flashing signal of recession ahead: Today’s global yield curve inversion looks just as concerning as the ones that preceded the last two market crashes! We now have 11 economies with 30-year yields lower than the fed funds rate. South Korea just joined the pack last month.

Tavi Costa Current Views

The 3-Month Libor vs. Euribor spread is at its highest level since 1999! Is the ECB about to start tightening or the Fed about to stop? Either way, unless “this time is different”, such policy changes from similar extremes is what preceded the last two recessions.

Tavi Costa Current Views

Today’s move in oil is a real sign of weakness. It’s like Oct. 2008 when markets completely ignored OPEC’s 1.5mbd supply cut and prices continued to collapse. Remember: in 2016, the 1.2mbd production cut sent oil prices up over 15% for the next 2 days. Not this time.