We have gotten emails from members concerned about the non-stop media fear mongering over the Covid-19 crisis. Negative, bear headlines get page views and traffic. Everyone always stops and turns to see a car wreck on the highway. This is the same type of rhetoric we heard in early spring with mainstream news sources forecasting a collapse into the end of April. We all know what happened. Below is a list of power points that best explain our forecast on the stock market going forward.
1. Jerome Powell: The Fed will do "whatever is necessary." They can deploy effectively infinite QE and liquidity.
2. New Covid cases are being reported primarily in socializing young people. No one is dying.
3. The economy will not be shut down again.
4. To permit markets to melt down again near March the lows would invite defaults, depression, and despair. The large banks don’t want that.
5. The media wasn’t successful in engineering a depression in March and they wont be able to do it now.
6. Listen to President Trump when he speaks about the market. Jerome Powell, the Fed chairman, is President Trump's inside man. The President's Treasury Secretary and Powell speak daily. Trump has the best inside information on the planet and has called twists, turns, and market direction since 2016. He now touts: “V-shaped recovery in progress."
7. Equities are the only game in town. Real estate? Government debt? Cash? All in jeopardy.
8. Record Leverage by institutions was the cause of the severe March collapse. Leverage is at a recent all time low now.
9. At some point in the future our debt ridden scheme of central banking will implode, but not yet. Empires die slowly.
10. The Republican convention is scheduled for late August. Trump does not want to get on that stage saying how great the economy is with a major correction in progress and the Dow tagging 20,000. Try new recovery highs.
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