This Could Be the Start of Something Big

One year of T-bill returns in a week... Stocks have snapped back... What took a bite out of yields... Evidence for the bulls... Real-time technical analysis... This could be the start of something big... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] One year of T-bill returns in a week... Stocks have snapped back... What took a bite out of yields... Evidence for the bulls... Real-time technical analysis... This could be the start of something big... --------------------------------------------------------------- Well, that escalated quickly... I (Corey McLaughlin) wrote to you [last Monday]( about major U.S. indexes recently dropping below their 200-day moving averages – but also suggesting to not panic. And since then, the S&P 500 and Nasdaq Composite indexes have rebounded by roughly 5% in five trading days... Let me be flippant for a moment and say that this 5% move higher is a one-year Treasury bill's return in a week... (Of course, your exposure to a cash-like vehicle such as a T-bill doesn't carry the same downside risks as stocks, which is why we love T-bills for a cash stash.) But we also like analyzing the stock market, and I want to give kudos to Greg Diamond and Chris Igou in their shorter-term-oriented Ten Stock Trader and DailyWealth Trader publications for urging subscribers to stay patient lately. This is a perfect example of why you want a plan and a decision-making process for any of your investments, be they short-term trades or long-term holdings. Preparation and conviction can prevent you from selling at the wrong time... and allow you to buy at the most opportune time when everyone else is scared. This could go for beaten-down stocks or assets like corporate bonds, which could take a hit in a recession. For now, here's what took a bite out of yields and boosted stocks... As we mentioned [a week ago today]( last week was going to be a busy one for economic data that would likely move the markets one way or another. A Federal Reserve meeting wrapped up on Wednesday, where the monetary-policy string-pullers stood pat with interest rates. And a key Treasury announcement showed still-increasing long-term bond issuance, but less than was expected. The latest monthly jobs report on Friday showed a slight uptick in the unemployment rate to 3.9% (from a low of 3.4% earlier this year), suggesting that there might not be much additional reason for the Fed to raise interest rates moving ahead... The combination took some bite out of the higher long-term Treasury yields we've seen the past few months and boosted stock prices. Could this be the start of something big, like a year-end rally? Perhaps, as we'll explain... Default mode... Heading into last week, the S&P 500, for example, was sending mixed signals. The index was trading below its 200-day moving average ("200-DMA"), but this longer-term technical indicator was also still moving higher, as it has since early in the summer. We noted the significance of this in Chris' analysis in particular. As he wrote in the October 27 issue of DailyWealth Trader... Yes, the S&P 500 is below its 200-DMA. But that moving average hasn't rolled over yet. The rising 200-DMA tells us the overall trend hasn't failed. These are conflicting signals. And when it comes to what action we take based on these, we are defaulting to the direction of the 200-DMA. This is what our broad market system is based on. It uses the moving average to tune out the short-term noise. Suddenly, not only is the S&P 500 back above its long-term technical trend line, but it has also broken back higher than its 50-day moving average, too... Almost all of October's losses were erased in a week... The S&P 500 was able to break through its longer-term moving average without any resistance and is still moving higher, which is a large piece of evidence for bulls. It was a broad rally, too, as the number of S&P 500 stocks trading above their 200-DMAs jumped from a one-year low near 25% to above 40% in a week. Bottom calling... Last Thursday in Ten Stock Trader, Greg wrote to subscribers that the "bottom is confirmed," as stocks weren't falling below their October lows. In the past two trading days, Greg has closed half a dozen bullish winners and let go of some other trades. Existing subscribers and Stansberry Alliance members can find all the details [here](. Should stocks move higher above their highs from October, it would mark even more bullish evidence and a sign that the past three or so months were a more garden-variety "correction" of around 10%. What's more, it would set the table for higher highs through the end of the year. As Greg [wrote on Thursday]( there could be "a rally to trade in the months ahead." On a very much related note, this analysis is also consistent with the pre-recession behavior for stocks during the similarly high-inflation 1970s and early '80s, which we've written about before. When [the yield curve started "normalizing,"]( as we've been seeing over the past few months, the S&P 500 lost about 13% in each instance. It's a similar story with the Nasdaq... As Chris [wrote today in DailyWealth Trader]( the Nasdaq fell below its 200-DMA, then turned higher. This was a sign, as is the recent trading action that puts the tech-heavy index near the top of a downward "channel." As Chris wrote... Remember, moving averages can act as "support" for stocks. When a stock falls to its support level and bounces higher, that's a positive sign the long-term trend is holding. If it breaks below that level and stays below it, a larger drawdown is likely. That would've been bad news for tech investors. Today, we're back to testing that downward channel once again along with the resistance at the 50-DMA. In recent months, both have been barriers for higher prices. But those are both short-term barriers. In this case, we give more weight to the long-term 200-DMA. In short, with the Nasdaq finding support at its rising 200-DMA, these two short-term barriers will likely break. You can see that the Nasdaq is trading right at those levels today... The important difference now, as opposed to in October, is that the Nasdaq didn't have long-term technical support then. There were risks to the downside to consider. Now there's the upside to consider, too. As Chris wrote... This week will likely define what we can expect in the coming month or two. If the Nasdaq breaks out and makes a higher high relative to October, that's a strong sign the turnaround in the sector is underway. We aren't recommending a new trade just yet. But know that a breakout is likely if the Nasdaq keeps climbing in the next few days. So, once again, kudos to Greg and Chris for their analyses, and to anyone who has been following their advice around this key inflection point in the markets recently. It just shows the value of having a plan and, importantly, sticking to it. On a related note, I know Greg has more thoughts about what he thinks is coming to the markets for the rest of the year and in 2024. He thinks it's so critical that he's planning to share the outlook with Stansberry Research readers soon. Stay tuned for more details about that in the days ahead. Why Gold Is on the Brink of a Historic Surge Rudi Fronk, CEO and co-founder of Seabridge Gold (SA), joined the latest Stansberry Investor Hour and shared his industry expertise and outlook on gold's price. Plus, Dan Ferris and I talk about what we think is really going on with the economy... [Click here]( to listen to this episode right now. For more free video content, [subscribe to our Stansberry Research YouTube channel](... and don't forget to follow us on [Facebook]( [Instagram]( [LinkedIn]( and [X, the platform formerly known as Twitter](. --------------------------------------------------------------- Recommended Links: [Until Midnight Tonight: Major Announcement From Porter Stansberry]( Company founder Porter Stansberry just returned for the first time in more than three years to issue one of the most important warnings of his career. If he's right, the next several years could be a very, very difficult period for investors and everyday Americans. Before midnight tonight, [click here to stream Porter's new update](. --------------------------------------------------------------- [A Rare Market Event 50 Years in the Making Is Happening NOW]( A predictable shift is playing out once again, which could hand you huge profits if you know what's coming. A small number of folks have been preparing for this exact moment, but 99% of investors will miss out. [Find the full details here](. --------------------------------------------------------------- New 52-week highs (as of 11/3/23): CBOE Global Markets (CBOE), Cencora (COR), CyberArk Software (CYBR), DraftKings (DKNG), Linde (LIN), Motorola Solutions (MSI), Qualys (QLYS), and Trane Technologies (TT). In today's mailbag, feedback on [Dan Ferris' Friday Digest]( which focused on WeWork's bankruptcy... and thoughts on Treasury bills and interest rates... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Thanks, Dan, for the expose on Adam Neumann, the WeWork CEO. However, I think he more or less emulated Alfred E. Neuman (MAD magazine spokesperson) and his ever-popular saying: What, me worry? "From the sounds of it though, he is just 'Up in Smoke' LOL!" – Subscriber Steve R. "I can't thank 'Doc' enough for his instructions and recommendation to buy T-bills through Treasury Direct. I don't think I would have ventured into this area of investments without his help. I also want to acknowledge Dan Ferris for his freebie bond fund reco a few weeks ago. [Last Wednesday's] Digest again, was very educational on bonds. The more I read, the more I feel secure investing in this area. "One question though that I haven't seen addressed. With war(s) on the horizon and the uncontrolled spending (Porter's most recent cast) our government does, regardless of what the Fed does with interest rates, won't this tremendous demand to finance our government, and all these bond sales affect the interest rate? I would think as we continue selling more and more bonds, interest rates would need to rise to entice buyers. "Am I on the right track here? Thanks as always." – Subscriber Steve R. Corey McLaughlin comment: Steve, thanks for the note. I'm glad to hear that Doc and Dan's recommendations have helped you feel more comfortable. And, yes, I share your thoughts regarding interest rates over the long run... Many factors influence bond yields, but in my view, Uncle Sam's own behavior is the biggest. Today, U.S. government debt is only going up... and it's already 120% of GDP... and the cost of borrowing is higher than it has been in 15 years. In other words, the U.S. is supplying more debt to the global economy, and for the first time since 1787, the 10-year U.S. Treasury bond is on pace for yearly losses in three straight years. I don't think this fact can be said enough. This is a historic rout. Think about it: For three years, demand has been lower on balance for longer-term bonds, as high inflation has persisted and the Fed has kept setting policy that has skyrocketed short-term rates on T-bills from near 0% to over 5%. There has been no good fundamental reason to buy long-term U.S. government bonds, and that's the reason yields have risen beyond many folks' expectations. Now, this run of losses may suggest this underperformance is over, but I'm not convinced. The cost of financing the U.S. government and 40-year-high inflation – stemming from the fiscal and monetary response to the pandemic from Congress, the Fed, and the Treasury – are the primary drivers of higher yields today and the three-year bond rout. And if there's one thing we know about the folks in Washington, D.C., it's that they like to spend other people's money (be it for short-term stimulus, defense, health care, or anything else). So, the risk of higher yields and lower bond prices over the long run is firmly on the table. As our founder Porter Stansberry said on stage at our annual conference in Las Vegas ([video replays are now available]( by the way)... For the first time in my lifetime, the government is broke. Truly. If the government prints more money, the bond market will absolutely crash, and so will the dollar. If the government borrows more money, there will be more inflation, the bond market will crash, and so will the dollar. We are absolutely at the end of our ability to finance our way of life. This is why it's wise to think differently about the bond market and the broad economy today than you might have any time from 2008 to 2020... or since the high-inflation 1970s and early '80s. On the monetary-policy side, inflation is still well above the long-term "norm." That means the Fed playbook of the past 15 years – of cutting rates to near zero and printing trillions of dollars to stimulate the economy – isn't available. It's not the same as March 2020, when the inflation rate was below 2% and U.S. financial institutions were begging for inflation. Now, the government risks cratering bond prices even more if it cuts rates too much and prints unfathomable sums of dollars. (That's not to say it won't try, but it wouldn't be the most peaceful move.) This is probably why the Fed members only penciled 50 basis points, or half a percentage point, of rate cuts in 2024 into their latest quarterly projections in September. Notably, they also don't expect inflation to get back to a 2% annual rate until 2026, suggesting higher rates for the long term, too. Those projections could be wrong, of course, like most Fed projections have been. The projection for fourth-quarter unemployment in 2023 (3.8%) is on track to be slightly wrong already, as it ticked up to 3.9% for October in Friday's jobs report. Fed policy also tends to directly influence short-term rates more than anything. A recession that puts 10% or more of the interested working population out of a job – like Porter is predicting for 2024 – could actually lead to deflation and force the Fed's hand into cutting rates more. But until that point, it looks like we're going to be in a "higher for longer" inflation and interest-rate environment than many people may think. And this would mean generally lower bond prices (and higher yields) for longer than many may expect, too. We can thank the geniuses in government always seeking reelection who find it satisfying to put their salaries and Uncle Sam's bill on someone else's tab and have long forgotten the idea of "sound money"... if they ever knew it. All the best, Corey McLaughlin Baltimore, Maryland November 6, 2023 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open positions across all Stansberry Research portfolios Stock Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 1,242.7% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,111.2% Stansberry's Investment Advisory Porter ADP Automatic Data Processing 10/09/08 796.2% Extreme Value Ferris WRB W.R. Berkley 03/16/12 608.6% Stansberry's Investment Advisory Porter wstETH Wrapped Staked Ethereum 02/21/20 577.4% Stansberry Innovations Report Wade BRK.B Berkshire Hathaway 04/01/09 523.8% Retirement Millionaire Doc HSY Hershey 12/07/07 455.1% Stansberry's Investment Advisory Porter AFG American Financial 10/12/12 385.5% Stansberry's Investment Advisory Porter TTD The Trade Desk 10/17/19 328.4% Stansberry Innovations Report Engel BTC/USD Bitcoin 01/16/20 302.0% Stansberry Innovations Report Wade Please note: Securities appearing in the Top 10 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the model portfolio of any Stansberry Research publication. The buy date reflects when the editor recommended the investment in the listed publication, and the return shows its performance since that date. To learn if a security is still a recommended buy today, you must be a subscriber to that publication and refer to the most recent portfolio. --------------------------------------------------------------- Top 10 Totals 4 Stansberry's Investment Advisory Porter 3 Stansberry Innovations Report Engel/Wade 2 Retirement Millionaire Doc 1 Extreme Value Ferris --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Stock Buy Date Return Publication Analyst wstETH Wrapped Staked Ethereum 12/07/18 1,416.9% Crypto Capital Wade POLY/USD Polymath 05/19/20 1,129.7% Crypto Capital Wade ONE-USD Harmony 12/16/19 1,074.2% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 821.4% Crypto Capital Wade MATIC/USD Polygon 02/25/21 800.0% Crypto Capital Wade Please note: Securities appearing in the Top 5 are not necessarily recommended buys at current prices. The list reflects the best-performing positions currently in the Crypto Capital model portfolio. The buy date reflects when the recommendation was made, and the return shows its performance since that date. To learn if it's still a recommended buy today, you must be a subscriber and refer to the most recent portfolio. --------------------------------------------------------------- Stansberry Research Hall of Fame Top 10 all-time, highest-returning closed positions across all Stansberry portfolios Investment Symbol Duration Gain Publication Analyst Nvidia^* NVDA 5.96 years 1,466% Venture Tech. Lashmet Microsoft^ MSFT 12.74 years 1,185% Retirement Millionaire Doc Band Protocol crypto 0.32 years 1,169% Crypto Capital Wade Terra crypto 0.41 years 1,164% Crypto Capital Wade Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Frontier crypto 0.08 years 978% Crypto Capital Wade Binance Coin crypto 1.78 years 963% Crypto Capital Wade Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root ^ These gains occurred with a partial position in the respective stocks. * The two partial positions in Nvidia were part of a single recommendation. Editor Dave Lashmet closed the first leg of the position in November 2016 for a gain of about 108%. Then, he closed the second leg in July 2020 for a 777% return. And finally, in May 2022, he booked a 1,466% return on the final leg. Subscribers who followed his advice on Nvidia could've recorded a total weighted average gain of more than 600%. You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. 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