Author: Andrew Packer

Cryptocurrencies

Bitcoin Magazine: Bitcoin Price Breaks $63,000 Following Assassination Attempt on Trump

Posted on by Andrew Packer

Last week’s attempted assassination of Donald Trump saw a massive reaction in the cryptocurrency market. Bitcoin prices surged nearly 10% on the news, from under $58,000 to over $63,000 before other financial markets could open.

The move suggests several things. First, following the attempt on Trump’s life, his odds of winning the Presidency again surged on betting sites. Trump has come out in favor of American innovation in all things cryptocurrencies. He would likely be a stronger candidate for pro-crypto voters.

Meanwhile, bitcoin prices could be reaching a point where they start to react to political events.

Generally, bitcoin has been a bit more responsive to inflation data, but has also continued to follow its own four-year cycle.

Buying data on exchanges indicate that there was a frenzy to buy bitcoin following the news. Buying bitcoin rather than selling it to raise dollars may indicate bitcoin’s utility as a form of cash.

Given Trump’s increasingly pro-bitcoin views, as well as the rise of bitcoin ETFs, a further rally in the months ahead looks likely. Bitcoin investors generally expect a rally in the months ahead, given bitcoin’s prior halving.

A new rally for bitcoin could take the price over $100,000 by the end of the year, or about 50% higher than current prices.  That move will likely lead to surging prices for bitcoin-related stocks.

 

To read the full article, click here.

Economy

BiggerPockets: Seeing Greene: Investing with High DTI, When to Refi, & Getting Out of Debt

Posted on by Andrew Packer

The real estate market has been largely “stuck” for nearly two years now. High mortgage rates have made homebuying challenging for first-time buyers. For existing homeowners, it’s psychologically difficult to get out of a historically low mortgage rate.

That’s kept existing homes largely off the market as well. However, while financing is more difficult than it has been in recent years, it’s not impossible. And buyers and investors alike have options.

For those getting started in real estate investing, one can buy a home with as little as 3% down. And after a few years, the first time homebuyer program can be used again.

Theoretically, a home could be bought with  low down payment, lived in for a few years, and then rented out.

Also, while today’s mortgage rates are high, they’re not that high relative to other forms of debt. Those looking to escape double-digit interest rates on credit card debt may want to consider refinancing.

While refinancing has some costs to it, a 7% mortgage is better than having to pay as much as 20% annualized on a credit card balance.

Similarly, a home equity line of credit can be created and tapped as needed to acquire capital for paying down higher cost debt, or taking advantage of opportunities in the real estate market.

 

To listen to the full opportunities for investing in real estate now, click here.

Stock market strategies

FX Evolution: This Rare Signal Has Flashed Again for Stocks…

Posted on by Andrew Packer

Some rare market signals are kicking off as stocks continue to break to new all-time highs. Market breadth is improving as well. That means it’s more than just tech stocks fueling the latest rally.

However, one of those signals suggest a potential recession could be ahead. With the first half of July over, one of the market’s most consistently bullish periods has ended. And from here, stocks could be in line to weaken.

Investor flows tend to slow down in late July and into August. Markets respond with a slowdown. It may not mean a full correction.

Part of the slowdown could be related to a market rotation. As other sectors take off and tech stocks trade relatively more slowly, stocks could be under pressure.

However, an increasing amount of market participation across a number of sectors remains a strong sign.

Financials, materials, and precious metals are showing the strongest returns right now. Those sectors could continue to lead in the second half of the year.

Over the next 250 days, however, it’s likely that markets will face at least some small pullback. Given that the current market rally has been going strong since November, a pullback from here would be healthy. And it could set up for markets to continue their gains over time.

 

To view the full signals being flashed now, click here.

Commodities

Sprott: Fourth Industrial Revolution Fuels Global Competition for Critical Minerals

Posted on by Andrew Packer

The rise of artificial intelligence, robotics, the Internet of Things (IoT), and other tools are remarkable. What’s more, by coming together all at once, they create a sort of fourth industrial revolution. As with previous revolutions, it can mean big changes.

The biggest change will likely be in the demand for the resources needed to fuel the revolution. That means the elements and metals critical to building AI components. And that’s on top of the energy and people needed to bring it together.

The growth of this new revolution in technology will use many of the same materials as in the past. That’s good for commodities as a whole. It’s particularly good for metals such as copper and lithium, which are key for electric cars.

It’s also critical for uranium. New nuclear reactor designs are getting approved. They’re safer and burn more cleanly than older designs. That will help provide the power needed to fuel AI data centers and other tools.

Plus, the rise of green technologies can make local grids more resilient. And less dependent on global supply chains.

But ultimately, it will come down to a massive boom in commodities to fuel this future. And commodity stocks will stand to benefit. That includes global major giants today, as well as smaller players that can bring new finds online in the years ahead.

 

To read the full analysis, click here.

Stock market strategies

Elliott Wave Options: Elliott Wave Targets for S&P 500 Melt-Up!

Posted on by Andrew Packer

Stocks haven’t just been trending higher in recent weeks. The S&P 500 had a hard time breaking through 5,500. Once that happened, however, the index managed to jump to over 5,600 in short order. That’s leading some to see signs of a market melt-up.

While fearful investors may worry about the eventual pullback, conditions right now are bullish for stocks to keep trending higher. And when the trend does change, it will start gradually. That’s why it’s important to know the key levels.

Markets have been trending higher even as inflation remains sticky. And as the latest labor data suggests that the labor market continues to slow.

It’s becoming clear that higher prices are getting harder to pass onto consumers. However, that may not fully materialize until the next quarterly earnings season.

It’s likely that markets will continue moving higher in anticipation of interest rate cuts. That will likely happen in September, giving investors a few more bullish weeks for markets.

With the markets trending higher, market leaders will likely continue to lead. That includes big tech names.

However, the market’s steep rally in recent months does warrant some caution. Now is not the time for aggressively bullish trading. Markets could consolidate in the past few weeks of July before trending higher again in August.

 

To view the full analysis, click here.

 

Commodities

Kitco News: Central Banks Put a Floor Under the Gold Price In the Face of Outflows From ETFs

Posted on by Andrew Packer

Gold has been a strong player year-to-date. And after a recent pullback, prices are on the move higher again. Investors have several reasons to be attracted to the metal now. Most arguments boil down to the simple logic of supply and demand.

And demand remains strong, even if it’s been shifting. Retail and institutional buyers were bullish a few years back. Today, it’s central banks that are doing the buying.

And that buying is heavy lifting. Central banks tend to buy in tonnes, not ounces. In the most recent quarter, Turkey, India, and China were big buyers of gold. China in particular has been a steady buyer for the past 18 months. That covers gold’s runup over the last year.

Meanwhile, don’t count out retail investors yet. Warehouse retailer Costco (COST) reports that its old out of its first delivery of 100-gram gold bars. Those bars were priced at just under $7,600. They’ll likely sell out just as rapidly in the future.

Gold is best known as an asset that can hold up relative to inflation. While inflation has come down significantly, it still has a ways to go.

With demand looking strong, and supply difficult to change over the short-term, investors may want to buy some more gold or gold-related positions before a potential move higher.

 

To read the full opportunities in gold right now, click here.

 

Income investing

Dividend Growth Investor: Buffett on Ignoring Stock Price Fluctuations and Thinking Like a Business Owner

Posted on by Andrew Packer

With markets hitting new all-time highs, it’s easy for investors to get caught up in the excitement. That could mean turning a blind eye to market dangers, and being blindsided by the next market pullback.

That makes now the time to step back from the market price action and look at the fundamentals. That means that investors could step back from thinking of the market as delivering ever-higher prices.

One strategy that can help investors during periods of market greed is to think in terms of investing in a business. That’s an approach value investors employ.

For instance, investors know of Warren Buffett’s expertise for value investing and owning shares of great companies. But he also owns entire businesses. And holding those businesses over decades allows them to become valued at multiples of what they were originally worth.

As that happens and the business grows, the cash payout related to those businesses can grow as well. That’s why Buffett’s investment in Coca-Cola (KO) over 35 years ago now pays about $776 million in cash each year.

But that rule can also apply to a private business, or a piece of real estate. Bought right, investors can hold a great investment nearly indefinitely. Or, in other words, if you don’t look at the price too often, it will take care of itself over time.

 

To read the full examples of Buffett businesses that have provided great returns, click here.

 

Cryptocurrencies

The Pomp Letter: The Fear & Greed Index Flashed Another Sign Over the Weekend

Posted on by Andrew Packer

After a roaring start to the year, cryptocurrency prices have languished in recent weeks. They’ve even trended lower. Bitcoin, the leader of the space, topped $70,000 earlier in the year. But in the past week, its prices have declined closer to $55,000.

Investor sentiment is now also moving to its lowest levels since late 2022. That’s right around the time bitcoin bottomed around $17,000 before starting to trend far higher. Sentiment also marked the March 2024 peak.

What does this mean for investors now? With sentiment looking bearish, it may be a counterintuitive time to buy.

In the crypto space, sentiment includes factors such as social media, surveys, and search engine trends.

These trends suggest that investor interest has moved elsewhere. While that could mean an explosive move off of pessimistic levels, it would take a bigger shift to mark a new bull rally.

Until that happens, patience is likely the name of the game. Typically, bitcoin soars a few months after its halving period. So far, it’s on track for a post-having decline that comes first, as it has in prior cycles.

Once bitcoin starts to trend higher, other cryptos will likely start to take off too. Interested investors should look for opportunities to accumulate now. And to have a plan in place to take some profits off the table when sentiment gets overly bullish.

 

To look at the full methodology behind bitcoin’s fear and greed index, click here.

Economy

Rebel Capitalist: Next Phase of the Commercial Real Estate Crash Is Here

Posted on by Andrew Packer

Commercial real estate has struggled in recent years. First, retail spaces saw a decline in demand as buying shifted online. But the pandemic led to a structural change in how people live and work.

That caused a massive reduction in demand for office properties. So far this year, several office buildings have traded hands as much as 90% lower than their last sale price. And since commercial real estate has significant debts behind it, there could be further dangers.

One sign that commercial real estate’s trouble is getting worse is the rise in fraud. Building owners are overstating financials and looking to obtain larger loans than their properties can support.

This practice is reminiscent of the so-called “liar loans” that occurred in the housing market in the mid-2000s. Essentially, loans were passed without going through the due diligence of determining the creditworthiness of the borrower.

While the commercial real estate market is smaller than the housing market, a decline poses some risks. Many debts related to commercial holdings could collapse. Or at least come under severe scrutiny.

As further fire sales are made, more risks could be exposed. And that could lead to systemic problems in the credit markets. Real estate-related stocks should be examined exceptionally closely right now.

 

To see the full analysis, click here.

Commodities

Game of Trades: A Once in a Financial Lifetime Event Is Here

Posted on by Andrew Packer

Between 1968 and 1980, stocks traded flat. However, adjusted for the waves of inflation that occurred during the 1970s, real returns were close to -70%. So far this decade, we’ve seen one massive inflation wave higher.

That wave has largely, but not entirely, subsided. And conditions are in place for another potential wave higher that could mimic the 1970s. In that event, markets could see big losses in real terms, even if they head higher in dollar terms.

With the economy apparently heading towards a soft landing, today’s economy has been engineered. Government spending has remained massive since the pandemic. As a result, the U.S. debt alone is rising by nearly $1 trillion every 100 days.

This may not mean we’re at a crisis yet. But we could see trends take place over the next few months that sends inflation creeping higher.

For instance, supercore inflation this year has started to trend higher. That’s all items less food, housing, and energy. It’s given back some of those gains, but remains elevated.

The good news is that energy prices have been moderate. And food inflation has declined to its 20-year average close to 2%. That’s a good sign that inflation is coming down, but could still trend higher, especially if the Federal Reserve cuts interest rates.

If we get another wave higher, bonds could take another hit as interest rates rise. But commodities should hold up in real terms.

 

To understand how inflation could start to soar higher again, click here.