Q1 Fundamental Briefing - March 23, 2021
Briefing Summary
Lowering of PCR testing protocols are significantly reducing the return of positive COVID tests. Achievement of U.S. Herd Immunity expected by end of April, accelerating deployment of COVID Vaccines, and validation for effectiveness of less restrictive COVID Management practices in Florida and South Dakota, are forcing Blue States to lift restrictions. This will lead to an unsustainable uptick in economic activity as Biden Administration inflationary policies evidenced by i) dismantling of energy independence causing fuel prices to double, ii) commitment to higher taxes (21 to 28% for corporations works out to 25% increase, undisclosed individual rate increases on earning above $200,000, plus extended reach of Estate Taxes) , iii) discontinuation of fairer trade initiatives with China and commitment to new version of Trans Pacific Partnership (TPP), iv) return to Paris Accord, v) open boarder policy /non-enforcement of immigration law, vi) DOJ support for state efforts to defund police through police reform legislation (see State of Illinois), and vii) foreign policy increasing risk for conflict by appeasing Iran and isolating North Korea will combine to cripple the U.S. Economy. Traders and Investors must look past the short-term window dressing of the $1.9 T COVID Stimulus spending, concealing the long-term objectives of the Biden Administration. Straight lines to the dismantling of the U.S. Economy are drawn below.
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Briefing Summary
Lowering of PCR testing protocols are significantly reducing the return of positive COVID tests. Achievement of U.S. Herd Immunity expected by end of April, accelerating deployment of COVID Vaccines, and validation for effectiveness of less restrictive COVID Management practices in Florida and South Dakota, are forcing Blue States to lift restrictions. This will lead to an unsustainable uptick in economic activity as Biden Administration inflationary policies evidenced by i) dismantling of energy independence causing fuel prices to double, ii) commitment to higher taxes (21 to 28% for corporations works out to 25% increase, undisclosed individual rate increases on earning above $200,000, plus extended reach of Estate Taxes) , iii) discontinuation of fairer trade initiatives with China and commitment to new version of Trans Pacific Partnership (TPP), iv) return to Paris Accord, v) open boarder policy /non-enforcement of immigration law, vi) DOJ support for state efforts to defund police through police reform legislation (see State of Illinois), and vii) foreign policy increasing risk for conflict by appeasing Iran and isolating North Korea will combine to cripple the U.S. Economy. Traders and Investors must look past the short-term window dressing of the $1.9 T COVID Stimulus spending, concealing the long-term objectives of the Biden Administration. Straight lines to the dismantling of the U.S. Economy are drawn below.
- Economic Reporting Summary
- Oil Inventories - (Negative)
- Oil printed a $32 low on Election Day and has more than doubled to trade just shy of $68 per barrel in less than 5 months since election.
- U.S. forces ordered to return to Syria 2 days after Biden inauguration.
- Iran aggression returns with missile attack on U.S. forces and gov. contractors in Iraq
- Followed by Biden ordered U.S. Airstrikes in Syria
- Iran aggression returns with missile attack on U.S. forces and gov. contractors in Iraq
- Industrial Production / Capacity Utilization (Positive*)
- Increases consistent with ISM (Institute of Supply Management) and PMI (Purchasing Managers Institute) strengthening.
- March Philly Fed 51.8 v 24.0, up from 23.1 in Feb. is big positive.
- This is a positive for now - however the combination of increasing energy costs, looming tax increases (see below) and discontinuation of prior administrations fairer trade initiatives are likely to make manufacturing gains short lived.
- Feb. Ind. Production dropped -2.2% v expected increase of 0.5%. Down from 1.1% Jan. increase.
- Feb. Capacity Utilization 73.8 v 75.7% expected. Down from Jan. 75.5%.
- Increases consistent with ISM (Institute of Supply Management) and PMI (Purchasing Managers Institute) strengthening.
- Housing Market remains strong due to Blue State and City flight from non-enforcement of laws protecting citizens and private property from BLM and ANTIFA rioting, fire bombing, and looting in Chicago, Minneapolis, New York, Milwaukee, Atlanta, Portland, Seattle, St. Louis, etc. (Positive driven by Negatives)
- Moving off 70 year lows in Mortgage rates and looming inflation providing huge incentive for buyers. However, material decline in February for Housing Starts and Building Permits already noted.
- Feb. Housing Starts 1.421 M v 1.570 M expected. Jan. 1.580 M.
- Feb. Existing Home Sales 6.220 v 6.500 M expected. Jan. 6.660 M. Month over Month decline of 6.6%. Year over Year dropped from 22.9% in Jan. to 9.1% in Feb.
- Feb. Building Permits 1.682 M v 1.750 M expected. Jan. 1.886 M.
- Feb. Housing Starts 1.421 M v 1.570 M expected. Jan. 1.580 M.
- Residential housing strength has taken up the slack for cancellation of major commercial construction projects is cities like Chicago due to COVID spawned remote work trend and non-enforcement of laws protecting citizens and property.
- Moving off 70 year lows in Mortgage rates and looming inflation providing huge incentive for buyers. However, material decline in February for Housing Starts and Building Permits already noted.
- Unemployment remains above 6% after initial recovery from COVID. (Negative - COVID Mismanagement)
- Destruction of small businesses cannot be expected to recover given current administrations prioritizing unions, city, and state governments over funding to rebuild small business.
- Note historically small business represents more than 50% of U.S. economy.
- COVID and Biden Admin. Policies validate escalating war on Middle Class to take down the U.S. economy.
- Note historically small business represents more than 50% of U.S. economy.
- Destruction of small businesses cannot be expected to recover given current administrations prioritizing unions, city, and state governments over funding to rebuild small business.
- Oil Inventories - (Negative)
- Quarterly Earnings (Positive)
- Earnings lag policy
- Benefits of Trump Admin. tax, energy, trade, foreign Policies showing up big in Q4 (Factset Earnings Insights reported almost 4% increase when - 9% decline projected) despite renewal of COVID fear mongering (Dark Winter) and Blue State shut-downs.
- Q1 Earnings on trajectory to achieve high water mark for 2021 given Biden Admin. Policy dismantling U.S. Economy.
- Earnings lag policy
- Fed Policy - Accomodative due to COVID impact (Positive)
- FOMC
- Fed looking for any excuse to raise rates as soon as possible despite publicly stated commitment to Quantitative Easing (accommodative policy) until recovery objective achieved.
- Potential basis for policy shift from accommodative to restrictive, “In anticipation of the $1.9B COVID Stimulus Package impact, just signed into law, the Federal Reserve is proactively raising rates by .5% to get ahead of inflation and adopting a restrictive policy.”
- 10 Yr. Note has dropped from 138 20 to 131 23 since November 2nd. This reflects an anticipated 18% increase in interest rates.
- Global Reset - EU is committed to a Global Reset using the impact of COVID and Climate Change to seize control of all private property and assets to secure their power and control.
- Motivate after BREXIT and Trump Policies exposed the depth of EU Leadership's ineffectiveness (designed grift/ engineered theft) and sparked shift in voter sentiment to center-right Nationalism.
- Note global trends in elections since 2016 have favored candidates embracing Trump Policy.
- U.S. Economy must collapse to justify the need for Global Reset.
- Motivate after BREXIT and Trump Policies exposed the depth of EU Leadership's ineffectiveness (designed grift/ engineered theft) and sparked shift in voter sentiment to center-right Nationalism.
- Fed looking for any excuse to raise rates as soon as possible despite publicly stated commitment to Quantitative Easing (accommodative policy) until recovery objective achieved.
- Bitcoin increases 400% since election
- Bitcoin trading at $14,407 on Nov. 3 has traded as high as $61,225 on Mar. 15.
- The U.S. operates on a Fiat (Trust Based) currency, not a Gold backed currency.
- Bitcoin has replaced Gold and U.S. Treasuries as the “Go To Safe Haven”.
- Expect Bitcoin to continue to rise as Biden Administration Policies continue to erode trust in the U.S. Economy.
- Note shift in Military priorities away from force readiness to social justice purity tests.
- Note Fed Quantitative Easing exacerbating decline in U.S. Dollar.
- FOMC
- Legislative initiatives (Negative)
- Proposing largest tax increase in last 30 years increasing Corporate Rates from 21 to 28%; individual rates increasing on earnings over $200,000, and extending the reach of Estate Taxes.
- Note inflation will hit home values hard and in turn increase property taxes.
- HR 1 stripping States of control of election integrity to ensure a repeat of 2020 election fraud into perpetuity.
- Green centric infrastructure bill guarantees inefficiencies through investment in compromised solutions (see recent Texas power failure - Wind Turbines).
- HR 127 restricting 2nd Amendment Rights
- Protection for online service monopolies to ensure expanding online censorship (ripping away 1st Amendment protections for free speech, freedom of religion, freedom to protest, and freedom to assemble), media manipulation of information, and theft of personal information protected under the 4th Amendment.
- Proposing largest tax increase in last 30 years increasing Corporate Rates from 21 to 28%; individual rates increasing on earnings over $200,000, and extending the reach of Estate Taxes.
- Administrative Policy (Negative)
- Energy
- On the verge of doubling annual fuel cost for Americans significantly impacting Middle Class and lower who must drive to work. For example if their daily commute is 30 miles round trip and they get 20 miles to the gallon then they use 1.5 gallons per day. At $2 per gallon their daily fuel cost is $3 per day, $15 per week, $60 per month, and $720 per year. For a working couple this is $1440 per year. Gas prices moving to $4 would increase their annual work related fuel cost by $1440. Consider their non-work related fuel costs to be 50% of work related fuel cost and you get a total annual increase of $2160 / cost of giving up energy independence.
- Return to the Paris Accords further crippling U.S. Energy production and increasing burdens on the U.S. Taxpayer with Middle Class impacted disproportionately.
- Immigration - non enforcement - open boarders
- Represses wages and increases competition for jobs for U.S. Citizens closest to or at the poverty line.
- H1 B Visas will go down as a huge fraud attacking the well-being of the U.S. Citizen
- Do you really believe there is a shortage of qualified U.S. Citizens to justify the need for H1 B Visas?
- This is a Democrat and Republican initiative to secure lower wages for their large corporate donors.
- Do you really believe there is a shortage of qualified U.S. Citizens to justify the need for H1 B Visas?
- H1 B Visas will go down as a huge fraud attacking the well-being of the U.S. Citizen
- Increases burdens on public schools (enrollment of non-English speaking students)
- Increases burdens on health care services
- Increases crime to compensate for unemployment, lower wages, rising fuel
- Increased crime - gang members - human trafficking
- Increased foreign enemies (terrorists)
- Represses wages and increases competition for jobs for U.S. Citizens closest to or at the poverty line.
- Health
- No testing, no quarantine for illegal immigrants
- Continued suppression of cost effective treatments like HCQ for COVID.
- Vaccinations vehicle for control of population movement (Bill Gates pushing for Medical Passports)
- Domestic Security
- State Laws achieving the objectives of defunding the police without defunding the police - State of Illinois HB 3653 - this will be the model for Blue States
- Rescinding Trump Executive Order prohibiting Chinese companies from involvement with the operations/servicing of the U.S. power grid.
- Failure to background check - vent illegal immigrants.
- Energy
- Trade (Negative)
- Discontinuation of China Trade restructuring
- Pulling $30 B allotted to compensate farmers for impact of China trade restructuring, reallocated to Green Initiatives, will add pressure increasing food costs to disproportionately harm the Middle Class.
- Elimination of China Tariffs coming soon
- Pursuit of new version of Trans Pacific Partnership (TPP) to destroy U.S. manufacturing once and for all.
- Discontinuation of China Trade restructuring
- Foreign Policy (Negative)
- Iran appeasement and return to isolation of North Korea
- Iran appeasement and North Korea isolation escalates nuclear threats diminished by Trump Administration policies.
- Iran appeasement and return to isolation of North Korea
Please check back often as there will be weekly updates to this initial briefing.
Make sure to check out this Special Offer!
First 30 Days of Biden - January 16, 2021
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Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.