4/28 – 5/2 Red Rock Update
Building Wealth in the Secular Bull Market to 2036
Stocks peak about every 36 years, most recently in 1929, 1965, and 2000. This 36-year cycle can be traced all the way back to the earliest eras in recorded human history, back to Pythagoras and Plato and the Axial Age around 600BC. After each peak comes a period of decline (punctuated by bear market rallies) that typically lasts 16 years or so. Then, with the excesses of the prior bull period wrung out and investors most depressed, the next 20-year run to the next market top can begin. We're in that Golden Age now – take advantage of it!
Howdy, Bull-Riders:
“Stagflation!” cry the clickbait artists. Well...no. At least not yet. The first estimate of March quarter real GDP growth excluding gold imports was -0.3% compared to the consensus estimate for -0.2% and the Atlanta Fed's GDPNow model estimate of -0.4%. The New York Fed's Nowcast predicted +2.6% and the St. Louis Fed's Nowcast was at +3.1%, which tells you why we follow the Atlanta Fed.
This was the first negative number in three years and way lower than the December quarter's +2.4%. But it was caused by a huge 41.3% surge in imports, which caused a 5% subtraction in the calculation of the March quarter GDP. Imports surged as companies front-loaded orders ahead of President Trump's anticipated tariffs.
Final sales of goods to domestic purchasers, which is real demand in the economy, grew at a 3% annualized rate in the quarter, about the same as the 2.9% in the December quarter. Companies obviously built inventories, which will soften the GDP number for the June quarter. But stagflation? Nope.
The headline Personal Consumption Expenditures Index increased 2.3% year-over-year and fell month-over-month by less than 0.1%,
The core Personal Consumption Expenditures Index – the Fed's favorite inflation indicator – increased 2.6% year-over-year in March, a bit lower than the +2.8% in February and right on consensus expectations. The month-over-month increase was less than 0.1%.
So, yeah, this is a “challenging scenario” as Fed Chairman Powell said, but not because it's stagflation. It's challenging because no one knows what the real tariff situation will be after all the deals are made and no one knows how businesses and the consumer will react to that situation.
What we do know is AI, machine learning, and biotechnology are investable trends that are going to make huge changes in our lives in the next twenty years.
Market Outlook
The S&P 500 added 2.2% since last Thursday as the Tariff Tantrum faded...for now. The Index is down 4.7% year-to-date. The Nasdaq Composite gained 3.2% as investors realized AI is not just another fad. It's still down 8.3% for the year, though. Lots of ground to make up by yearend. The SPDR S&P Biotech Exchange-Traded Fund (XBI) climbed 2.0% but is down 8.4% year-to-date. The small-cap Russell 2000 edged up 0.9% but is still down the most in 2025, -11.4%.
The fractal dimension is in an interesting position. It's consolidating the recent downturn, yet that downturn never turned into a clear downtrend to consolidate the post-election rally. I think that means we'll see a resumed downtrend in the future that will push the fractal dimension under 55 and down to 30, but we'll have to see.
Below The Paywall This Week
* * a new all-time record
* * Our #1 job is to listen to our customers and earn their trust by creating solutions to enable their success
* * Over 40% of the Earth's population logs in every day
* * To which I say (1) not likely, (2) doesn't matter, and (3) no way.
* * low bars to beat
* * they clobbered the pro forma earning estimate
* * an asymmetric investment opportunity with little downside risk
* * one of the biggest beneficiaries of applying AI to their product portfolio
* * the largest and fastest profitability outlook
* * new standards for low power consumption, high performance, and optimal silicon area utilization
* * which holds SpaceX
* * may set a June date for the first data release
* * a sustained biochemical response regardless of prior treatment history
* * It just hasn't weakened yet and – Spoiler Alert! - it's not going to.
* * especially well-positioned for the next several years
* * the highest-grade US uranium mine
* * supply is down year-over-year
* * starting a necessary pullback
* * focus on the future growth built into their current royalty portfolio
* * a Buy for a $150,000 target
* * the cheapest and easiest way to buy
Coming Events for Free Subscribers
All times below are EDT.
Wednesday, May 7
Business Employment Dynamics - 10:00am – Expect a sharp reduction in previously reported payrolls
Fed Meeting - 2:00pm press release; 2:30pm press conference
Friday, May 9
Short Interest - After the close
Golden Age Portfolio Update
This was another very good week for the portfolio as it jumped 7.1% to add to last week's 9.3%. We're now up 2.3% in 2025 and 83.5% since inception, with much more to come. Let's dig in...
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Martha Argerich plays Beethoven
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Your trying to understand the Canadian election Editor,
Paid subscriber or not, if you would click the ♥ symbol below, it would really help me get the word out.