Today I posted my two-hundred-and-thirty-third YouTube video: Trend of the Week China Accelerates This week’s Trend of the Week: China Accelerates. There is a horrific death toll in China as the country’s COVID policy changed dramatically, allowing COVID cases to surge wildly, spreading throughout the country and killing possibly a million people, but ultimately resulting (everyone hopes) in immunity. Now, Bloomberg is seeing a pick-up in China’s manufacturing activity and predicts 5.8% GDP growth in 2023, a huge bump from 3% in 2022. You can see this upswing by looking at the iShares China Large-Cap ETF (Nasdaq: FXI) as the market anticipates this GDP growth and a likely stimulus from the People’s Bank of China to make up for problems relating to the COVID crash. The iShares MSCI Emerging Markets ETF (EEM), which is an ETF that tracks at emerging markets as a whole and is heavily influenced by China, is also back on the upswing. I had been shorting EEM as China’s economy was dragging markets down, but I’ll be ending that short now. The bad thing about China being back is that it will start exporting inflation to the global economy, likely to the tune of about 100 basis points. Whether or not this will change the Fed’s timeline for pausing interest rates is unclear at this point. We can expect higher commodity prices, energy prices, and eventually, consumer prices as China continues its upswing. To follow more ETFs, go to my paysite, JubakAM.com.
Gold is back and I like the shiny metal as risk of a debt ceiling crisis increases–here’s how I’d play gold now
With the Federal Reserve seemingly winding down its cycle of interest rate increases, a stronger dollar is no longer the big currency market story. Gold is. Gold is back. And for at least the next 3 to 6 months.
Today I posted my two-hundred-and-twenty-sixth YouTube video: Quick Pick Sell UUP. This week’s Quick Pick: Sell UUP–the dollar ETF. I had the Invesco DB US Dollar Index Bullish Fund (NYSEARCA: UUP) in my portfolio through 2022 while the dollar was doing well but the dollar has recently taken a turn South and I’m now saying: Sell. UUP was going up while expectations were that the Fed was going to continue to raise interest rates, but now that the market believes (rightly or wrongly) that the Fed will be slowing their rate hikes, we’ve seen it move down by about 1.22% for 2023. This will likely continue to be the case as other countries maintain steady interest rates or even raise them to fight inflation (Watch the European Union) and as we edge closer to the debt ceiling cliff. U.S. Secretary of the Treasury, Janet Yellen thinks the government can shift things to cover us through June, but after that, if the debt ceiling isn’t raised by Congress, the United States will not be able to borrow enough money to meet all of its obligations. I think we’ll walk right up to that cliff, but I sincerely hope we don’t go over it. For now, I’m selling UUP and I’ll be looking for a gold ETF to replace it. More on that to come!
I’m making a switch today (well, actually tomorrow) in the Perfect 5 ETF Portfolio Out goes the iShares Large Cap China ETF (FXI). In comes the ProShares Short MSCI Emerging Markets (EUM). My weighting remains the same at 15% of the five-ETF portfolio.
In my July 7 YouTube video: “Quick Pick UUP” I added the Invesco DB U.S. Dollar Index Bullish Fund (UUP) to my Perfect 5 ETF Portfolio. (To replace the Consumer Staples Select Sector SPDR ETF (XLP) in that portfolio. More on that in another post today.) Today I’m also going to add this dollar ETF to my Volatility Portfolio and to my Jubak Picks Portfolio. I’m setting a target price of $33.20 in the Jubak Picks Portfolio. You should take the fact that I’m adding a dollar position to three portfolios as an indication of how strongly I feel about a continued strong dollar.
My one-hundred-and-fifty-fifth YouTube video “Quick Pick UUP Dollar ETF” went up today. In my video yesterday (if you missed it, go watch!) I explained why a strong dollar has hit commodity stocks hard, and why I think the dollar will continue to be strong. One strategy I suggested: Investing in an ETF that tracks the dollar. My recommendation here is Invesco Dollar Index Fund (UUP). I’ll be adding it to my ETF Portfolio on my JubakAM.Com subscription site on July 8.
It’s not surprising given the greater than expected decline in U.S. first quarter GDP reported on Wednesday, which followed on the slump in consumer confidence reported Tuesday, that stocks in the consumer staples sector outperformed both consumer discretionary stocks and the market in general. The Consumer Staples Select Sector SPDR ETF (XLP) gained 0.63% on Wednesday, June 29. By contrast the Consumer Discretionary Select Sector SPDR ETF (XLY) lost 0.08%.
Today, Tuesday May 17, China’s top economic official, Vice Premier Liu He, said that the government will support the development of digital economy companies and their public stock listings. The comments delivered after a symposium with the CEOs of some of the country’s largest private technology companies came just a day after the National Bureau of Statistics reported that industrial output fell 2.9% in April from April 2021, and that retail sales contracted 11.1%. Financial markets in China and the United States interpreted the remarks as a public show of support for China’s Internet companies
Replacing Invesco Bank ETF with Consumer Staples ETF in my Perfect 5 ETF Portfolio; increasing commodities weighting
Back on April 11 when I “trimmed” my bank stock positions in my Jubak Picks Portfolio ( https://jubakam.com/trimming-bank-st…wfc-and-kbwb-etf/) by selling Wells Fargo (WFC) and the Invesco KBWB Bank ETF, I said I’d sell that ETF out of my Perfect 5 ETF Portfolio when I had a replacement ETF to offer. Today I’ve got a replacement to recommend and I’m selling the Invesco Bank ETF out of that portfolio. The replacement is the Consumer Staples Select Sector SPDR ETF (XLP).
Just want to make sure that no one missed the sell recommendations in yesterday’s Saturday Night Quarterback post. Big banks will kick off another earnings season beginning with JPMorgan Chase (JPM) on Wednesday, April 13. Citigroup (C) and Wells Fargo (WFC) follow on April 14. Bank of America (BAC) reports on April 18. Bank earnings forecasts present a complicated picture for the quarter–which is only appropriate since that’s true of Standard & Poor’s 500 earnings forecasts as a whole.
Big banks will kick off another earnings season beginning with JPMorgan Chase (JPM) on Wednesday, April 13. Citigroup (C) and Wells Fargo (WFC) follow on April 14. Bank of America (BAC) reports on April 18. Bank earnings forecasts present a complicated picture for the quarter–which is only appropriate since that’s true of Standard & Poor’s 500 earnings forecasts as a whole.
This week’s Quick Pick is a utilities ETF, XLU. Utilities are a good place to turn to for the next few months before we hit a full recession slowdown. This ETF has a lot going for it, including a strong upward trend, a low expense ratio, and a good yield. As utility companies continue to invest in capacity, they are allowed to increase their rate base, which means revenue will keep going up. I own this ETF in my Perfect 5 ETF Portfolio on JubakAM.com, where it’s been up 43% since 2018.