Just a quick note here regarding Trump's successful return to power as the next President of the United States.
Yesterday, Wednesday, November 6th, U.S. stock prices rose sharply, U.S. Treasury securities fell sharply, and gold and silver prices also fell sharply.
And about halfway through today, the S&P 500 topped out at about +0.75% on the day, the Nasdaq Composite topped out at about +1.5% on the day, and the DJIA and Small Cap stock indices have been flirting with the zero line after monumental gains yesterday. Bond and Precious Metals prices have also bounced modestly so far today.
The Federal Reserve just lowered its Fed Funds rate target by 25 basis points, which was consistent with most Wall Street forecasts.
What now? It looks to me like all the potential positive news relating to Trump's victory is now fully discounted in stocks, bonds, and precious metals prices.
Bottom line: I believe that U.S. stock prices are now at or very near a major top. I see safety in bonds and precious metals related investments. Elon Musk is likely to accept an invitation from the new Trump administration to be the "Budget Czar" with a potential mandate to cut up to $2 Trillion from the Federal Budget. Musk himself says there will be temporary dislocations (i.e. "Pain") for many Americans during this process, but he says that in the long term most Americans will be better off. I doubt whether most Americans will be better off, but I do believe the "pain" portion of Musk's comments. Consistent with the pain that is surely forthcoming, an economic recession is now likely to begin in the first half of 2025. Forward-looking stock market investors will soon see the early signs of a recession and will exit stocks in earnest over the very near term.
