Republic Risk Letter: Oh Good, Another Bond Earthquake?

This morning, you can sense the fear building. But it's clear that no one seems to understand what happened last night in the bond markets, where we just saw something significant happen.                                                                                                                                                                                                                                                                                                                                                                                                                 Forwarded this email? [Subscribe here]() for more [Republic Risk Letter: Oh Good, Another Bond Earthquake?]( This morning, you can sense the fear building. But it's clear that no one seems to understand what happened last night in the bond markets, where we just saw something significant happen. [Garrett {NAME}]( Jan 2 ∙ Preview   [READ IN APP](   Equity Index Strength Is GREEN on the S&P 500 and GREEN on the Russell 2000. Each morning, we assess the full flows of the market by measuring statistical metrics on a specific number of stocks to determine broader sentiment and the momentum trend. When these readings turn red, we focus on cash, build trades around positive sectors, or take inverse positions against indices. When it is positive, we focus on short-squeeze stocks, companies with improving fundamentals, and trading/investing around the actions of corporate insiders. An ominous silence starts for 2024, and futures are tumbling in the premarket hours. A significant offloading of 1 month of T-bills occurred while many were fast asleep, awaiting the first trading day of 2024. A spike of this size hasn't been seen since the Silicon Valley Bank debacle in March 2023.  Gold is roaring, oil is moving higher, and Bitcoin is surging. In addition, we ended the year with the S&P 500, and many sector signals suggest that we hit near-term tops on our final trading day. This is a time to be VERY cautious with a wall of critical data emerging this week. We have the Fed minutes tomorrow, manufacturing updates, and a vital jobs report on Friday. At the bottom of today’s article, you’ll find information on using covered calls for long-term positions in your portfolios.  --------------------------------------------------------------- Morning Notes: - Novartis (NVS) has struck a $100 million deal with Voyager Therapeutics (VYGR) to license and develop gene therapies for Huntington's disease, with additional milestone and royalty agreements potentially topping $1.3 billion. - A significant lithium reserve, estimated at 18 million tons, has been discovered under California's Salton Sea, potentially affecting global market dynamics and steering the U.S. toward lithium self-sufficiency. - Once again, Maersk has announced a 48-hour pause on its vessels transiting through the Red Sea following an attack by Iranian-backed Houthi fighters on one of its ships. This decision comes as a response to escalating tensions and security concerns in the region, impacting global shipping routes. - ExxonMobil (XOM) has handed over its operations at Iraq's West Qurna 1 oilfield to PetroChina, exiting the project and leaving PetroChina as the lead contractor following Iraq's purchase of a substantial portion of Exxon's stake in the field. - The Netherlands has partially revoked ASML's (ASML) export license for specific lithography systems to China, following U.S. export controls, impacting select Chinese customers. - We released [the Republic Risk Portfolio last night]( and it will track the full calendar year. Founding Members will receive an update tonight on the state of this portfolio and how we plan to use it. I will comment more on this portfolio after we discuss the state of the market. --------------------------------------------------------------- Dear Fellow Expat: Good morning.  Welcome to 2024, the Year of the Gator. I’m thrilled so many new members joined in our final week to take advantage of our Equity Strength Signals - and to manage your risk correctly in the year ahead.  In the next few days, I’ll have a much longer take on the state of the economy and markets heading into the year. We’re not here to make reckless predictions about where things will lie in the next 12 months.  We are here to react and be opportunistic in our investing and trading. We want to take what the market gives us - with a longer-term focus on momentum, strong companies, and the anomalies most people ignore.  There are three core parts to our worldview. And each complements the other in ways only some market participants take the time to understand. But I assure you, once you see how this all plays out - you will never unsee it... Keep reading with a 7-day free trial Subscribe to Postcards from the Florida Republic to keep reading this post and get 7 days of free access to the full post archives. [Start trial]( A subscription gets you: The Republic Risk Letter - (Morning) Weekend Postcards (The Week Ahead) and Access to Full Archive An Update When SPY and IWM Readings Turn Positive/Negative   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()