The Market Is Calling the Fed's B.S.

More stimulus signals from China... Melt-Up fuel, pending election results... The benchmark mortgage rate is above 7%... The market calls B.S. on the Fed... A 'smart money' strategy... Mailbag: Spending like no tomorrow... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Digest] More stimulus signals from China... Melt-Up fuel, pending election results... The benchmark mortgage rate is above 7%... The market calls B.S. on the Fed... A 'smart money' strategy... Mailbag: Spending like no tomorrow... --------------------------------------------------------------- The Chinese government may be about to 'go big'... It's one of the major stories of the day. From global news service Reuters... China is considering approving next week the issuance of over 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy, a fiscal package which is expected to be further bolstered if Donald Trump wins the U.S. election, said two sources with knowledge of the matter. China's top legislative body, the Standing Committee of the National People's Congress (NPC), is looking to approve the fresh fiscal package, including 6 trillion yuan which would partly be raised via special sovereign bonds, on the last day of a meeting to be held from Nov. 4-8, said the sources. While not set in stone and citing anonymous sources, this is the first detailed report we've seen about the potential scope of fiscal stimulus [we've been expecting]( from the Chinese government... If it comes to fruition, it would follow the stimulus plans already announced by the Chinese central bank. The rumored outline amounts to a big plan... All that stimulus comes to about 8% of Chinese GDP. As our friend Brendan Ahern at KraneShares wrote today in a summary of the reporting in his free e-letter, China Last Night... The bond issuance would: - Be spread out over three years with [6 trillion yuan ("RMB")] of "the proceeds primarily being used to help local governments address off-the-books debt risk" - "4 trillion worth of special-purpose bonds for idle land and property purchases over the next five years" - A separate RMB 1 trillion "as a consumption boost including trade-in and renewal of consumer goods" - "Another trillion to bolster banks' balance sheets" Now, again, this isn't official... And, as reported, the details may depend on the outcome of the U.S. presidential election. Nothing sounds like it will be decided until at least the next National People's Congress meeting next week. But the trend and stance of Chinese government officials is clear: The string-pullers of the world's second-largest economy are looking to add more juice... after years of dragging, stagnant performance since the pandemic. This sounds like more 'Melt Up' fuel to me (Corey McLaughlin)... The report emerged after Chinese markets closed today, so we'll get a better read on market reaction in Asia in a few hours after this Digest hits your inbox. But notably, gold and bitcoin moved higher on the news, as they have during recent up days tied to Chinese stimulus announcements or rumors. In fact, gold (which is being bought at a premium in China) made another new all-time high today... and bitcoin rose above $73,000, within a fraction of its all-time high hit in March. Of course, the Chinese plan evidently hinges on Trump winning next week's election... likely because it means U.S. policy with China would not be accommodative, shall we say. But should Kamala Harris win, this plan could change and the market's reaction could unwind. Meanwhile, here in the U.S... We're now seven days until Election Day. Early voting continues, with the same trends in place that we wrote about yesterday. Democrats and women have handed in their ballots in large numbers thus far. We'll keep watching... On the economic-data front, we saw a notable signal in the jobs market today... September's Job Openings and Labor Turnover Survey ("JOLTS") report showed 7.44 million open positions last month, a 418,000 drop from the month before and the fewest openings since January 2021. Meanwhile, the U.S. Bureau of Labor Statistics "revised" last month's JOLTS numbers down by 179,000 to 7.9 million, with mixed signals for the economy. Most of the difference involved "total separations," which includes both layoffs and folks who quit. While the updated August numbers include more than 60,000 layoffs that the initial report overlooked (a concerning sign), they also reflect an additional 94,000 people who quit (which can be a good signal, since it means they feel comfortable leaving to pursue another job). These labor-force changes are taking place, of course, against the backdrop of the U.S. election... And while the Federal Reserve has faded into the background of the headlines for now, it appears to be still inclined to cut interest rates again this year. We think. But the bond market is calling B.S... Federal-funds-rate futures traders are still expecting a cut, with the overwhelming bet (more than 98%) on the central bank reducing its benchmark bank-lending rate by 25 basis points at its next meeting on November 6 and 7. And this group expects another cut in December. That's even despite the bond market screaming that it expects high(er) inflation ahead. Longer-term Treasury yields continue to rise, meaning Treasury prices are falling. In concert, mortgage rates have been heading higher, too (without making homes any cheaper to buy, of course). The average 30-year fixed mortgage rate is now above 7%, according to Mortgage News Daily. That's up almost 100 basis points from the day the Fed cut rates by 50 basis points last month. I don't think this is the reaction the central bank had in mind to "help" the economy now that higher inflation has been conquered, as the Fed has suggested. But that's the market for you – which is reflecting a belief in more inflation ahead, not less. The Fed's moves tend to influence shorter-term rates while the market sets the longer-term ones. That "inverse-Fed fund" idea we talked about in the mailbag a few weeks ago sounds better every day. Speaking of that... add BlackRock CEO Larry Fink to a list of noted investors that includes Stanley Druckenmiller and Paul Tudor Jones making the case for higher bond yields (and inflation and debt concerns) ahead... Fink said during an investment conference in Saudi Arabia today... I think it's fair to say we're going to have at least a 25 [basis-point cut], but, that being said, I do believe we have greater embedded inflation in the world than we've ever seen... Today, I think we have governmental policies that are embedded inflationary, and... we're not going to see interest rates as low as people are forecasting. As CNBC reported, after Fink spoke, a group of CEOs – which included the leaders of Goldman Sachs, Carlyle, Morgan Stanley, and others – gathered for a panel. They were asked to raise their hand if they thought two additional rate cuts were coming from the Fed this year. No one did. And stocks keep chugging higher, generally speaking... The major U.S. indexes were "mixed" today, with the Nasdaq Composite Index and the S&P 500 Index up 0.8% and 0.3% respectively, and the Dow Jones Industrial Average and Russell 2000 Index off a little. Longer-term bond yields moved higher again earlier in the day, but finished a little lower. The 10-year Treasury is still close to 4.3%, though, and the 30-year is around 4.5%. Speaking of 'smart money' guys like Druckenmiller, Tudor Jones, and Fink... Another sophisticated insider we know, Chaikin Analytics founder Marc Chaikin, just debuted a brand-new free presentation with a trading strategy he says he had waited his entire career to unveil... This morning, for the first time ever, Marc shared this short-term trading strategy that he says you can put to work alongside your long-term portfolio. Without giving too much away, it has to do with the "stealth accumulation" that his Power Gauge tool can detect – about where money is flowing around Wall Street. And, importantly, Marc says "the next phase" of the market is approaching... starting November 8, as we get into the heart of third-quarter earnings season with announcements from big names like Nvidia (NVDA). This period, he says, will lead to "very big surprises, which will accelerate rotation of smart money we've already seen this year." Be sure to [tune in to Marc's free presentation for more detail](... and to hear a free recommendation that he shares as part of the event. Perhaps you've picked up on something today... We've mentioned a few dates related to our top stories, all occurring in the same week... Election Day, on November 5... The next Federal Reserve policy announcement, on November 7... Potential Chinese stimulus, on November 8... Marc's predicted new phase for the market, also on November 8... Next week should be a big one for the markets, one way or another. In this week's Stansberry Investor Hour, Dan Ferris and I are joined by Stansberry Asset Management ("SAM") Chief Investment Officer Austin Root. (SAM is a U.S. Securities and Exchange Commission-registered investment adviser, completely separate from our Stansberry Research publishing business. But it uses our research, plus other sources, to help manage individual client portfolios. For more information on Stansberry Research's relationship with SAM, [click here]( In the episode, we debrief on Stansberry Research's annual conference in Las Vegas, talk about portfolio management, discuss the first step any investor must take, and more... [Click here to watch the interview now](... To hear the full audio version of this week's Stansberry Investor Hour, visit [InvestorHour.com]( or find the show wherever you listen to your podcasts. --------------------------------------------------------------- Recommended Links: [Live Warning Today for 892,000 Americans]( Prepare immediately for a historic "disconnect" in the U.S. financial markets. "Get out of cash... and adopt a powerful new way of handling your money (NOT gold or cryptos) that could double your portfolio," says Wall Street legend Marc Chaikin. He's airing his newest market prediction and four free recommendations (tickers included). [Click here to watch – just three blocks away from the New York Stock Exchange]( --------------------------------------------------------------- [Our No. 1 Stock for the Rare 'Millionaire Window' Opening NOW]( According to Wall Street legend Whitney Tilson, an extremely rare window in the markets is about to open. It's an often-misunderstood market setup we've only seen 13 times since 1920. The last time this happened, it minted a million brand-new millionaires – in a single year. But Whitney says this unique window in the markets could close much sooner than anyone realizes, leaving most investors in the dust, while making a select few incredibly rich. [Get our No. 1 stock (with 500%-plus upside potential) for this rare market event now](. --------------------------------------------------------------- New 52-week highs (as of 10/28/24): Booz Allen Hamilton (BAH), Alpha Architect 1-3 Month Box Fund (BOXX), iShares Convertible Bond Fund (ICVT), JPMorgan Chase (JPM), London Stock Exchange Group (LNSTY), Mueller Industries (MLI), PayPal (PYPL), Sprouts Farmers Market (SFM), Snap-on (SNA), and Summit Materials (SUM). In today's mailbag, feedback on yesterday's edition that previewed next week's election and potential market reaction... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com. "Greetings, Overwhelmingly, from Porter [Stansberry] on down, you all seem to discount any possibility that Trump will actually reduce the country's debt load. For starters, he won't be paying illegals welfare and with Elon [Musk]'s help [will] actually reduce the size of the government. "Having a sane and profitable energy policy instead of the green new scam will help immensely too. At least he understands what a budget is supposed to be!" – Subscriber Bill D. McLaughlin comment: While policies like you mention would save some money, I doubt they alone could reduce the federal debt, given the knee-jerk propensity of whichever individual or party is in power to spend or lend new dollars into existence when challenges arise... Or run deficits like there is no tomorrow... So, you're right, we are discounting the possibility that a Trump or Harris administration would encourage a reduction in the country's debt load. The interest payments alone on current debt might make it impossible. I would love to be wrong, though. "Trump wins in an electoral landslide and Repubs sweep both houses... flag it..." – Subscriber Matt A. McLaughlin comment: Flagged... and place your bets if that is your cup of tea. We expect volatility in the next few weeks, which could make for short-term trading and perhaps long-term buying opportunities. And I believe this is a critical election politically and culturally for the country. But over the long run – I'm talking multiple years – the outcome probably won't be a huge differentiator for long-term returns or influence specific sectors as directly as one might think. I'm more interested in betting on what won't change: more debt... more inflation. All the best, Corey McLaughlin Baltimore, Maryland October 29, 2024 --------------------------------------------------------------- Stansberry Research Top 10 Open Recommendations Top 10 highest-returning open stock positions across all Stansberry Research portfolios. Returns represent the total return from the initial recommendation. Investment Buy Date Return Publication Analyst MSFT Microsoft 11/11/10 1,386.7% Retirement Millionaire Doc MSFT Microsoft 02/10/12 1,360.7% Stansberry's Investment Advisory Porter ADP Automatic Data Processing 10/09/08 1,034.4% Extreme Value Ferris BRK.B Berkshire Hathaway 04/01/09 712.9% Retirement Millionaire Doc TT Trane Technologies 04/12/18 525.5% Retirement Millionaire Doc WRB W.R. Berkley 03/15/12 515.8% Stansberry's Investment Advisory Porter AFG American Financial 10/11/12 456.4% Stansberry's Investment Advisory Porter HSY Hershey 12/07/07 455.5% Stansberry's Investment Advisory Porter TTD The Trade Desk 10/17/19 427.4% Stansberry Innovations Report Engel PANW Palo Alto Networks 04/16/20 377.4% Stansberry Innovations Report Engel 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 Retirement Millionaire Doc 2 Stansberry Innovations Report Engel 1 Extreme Value Ferris --------------------------------------------------------------- Top 5 Crypto Capital Open Recommendations Top 5 highest-returning open positions in the Crypto Capital model portfolio Investment Buy Date Return Publication Analyst wstETH Wrapped Staked Ethereum 12/07/18 2,291.8% Crypto Capital Wade BTC/USD Bitcoin 11/27/18 1,758.4% Crypto Capital Wade ONE/USD Harmony 12/16/19 1,132.5% Crypto Capital Wade POL/USD Polygon 02/25/21 705.6% Crypto Capital Wade CVC/USD Civic 01/21/20 315.1% 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 Inovio Pharma.^ INO 1.01 years 1,139% Venture Tech. Lashmet Seabridge Gold^ SA 4.20 years 995% Sjug Conf. Sjuggerud Nvidia^* NVDA 4.12 years 777% Venture Tech. Lashmet Intellia Therapeutics NTLA 1.95 years 775% Amer. Moonshots Root Rite Aid 8.5% bond 4.97 years 773% True Income Williams PNC Warrants PNC-WS 6.16 years 706% True Wealth Systems Sjuggerud Maxar Technologies^ MAXR 1.90 years 691% Venture Tech. Lashmet Silvergate Capital SI 1.95 years 681% 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%. --------------------------------------------------------------- Stansberry Research Crypto Hall of Fame Top 5 highest-returning closed positions in the Crypto Capital model portfolio Investment Symbol Duration Gain Publication Analyst Band Protocol BAND/USD 0.31 years 1,169% Crypto Capital Wade Terra LUNA/USD 0.41 years 1,166% Crypto Capital Wade Polymesh POLYX/USD 3.84 years 1,157% Crypto Capital Wade Frontier FRONT/USD 0.09 years 979% Crypto Capital Wade Binance Coin BNB/USD 1.78 years 963% Crypto Capital Wade 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}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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