Market Insights - 1.15.25

Hi, my name is Ben Rippond. Welcome to my YouTube broadcast. Today is January 15th, 2025, the early part of the new year. Let's get into the, um, dashboard. I'm going to start with that. This is an interesting view. So here we are early January, you know, middle of January, a couple of weeks into the month and look at all of the red. The market has been going down. It's down for the week. It's down year to date in every category. I do not remember when I last saw this. Um, so you've got six equity indexes, major equity indexes and the bond index. They are all negative for the year. Two weeks and the last week. So the worst is bonds. That does not surprise me. Bonds have been collapsing for a long time. And the red dots, which indicate, uh, is it above or below it's moving a 20, 50, 100, 200 day moving average, or is it above? If it's above, it's a green dot below. It's a red dot. So you can see that out of 28 possibilities on the dots, 28 possibilities of, of green dots. We have five, five out of 28. That's a pretty negative view. And of course, in the center in the yellow and the red box, uh, all of the indexes are negative. So, um, there's a little bit of green on the, you know, moving averages, but not much. So that's the beginning of 2025. When we get to the sectors, uh, they're mixed, but again, mostly negative. We have, again, in the yellow box, we have those for the last week that were positive sectors and those sectors that were negative, um, again, mostly negative year to date. We only have, which is two weeks. We only have two sectors that are positive and that's energy and health care. All the others are negative and some are quite negative for that short period of time. You get to the red dots and green dots again, 13 out of 44 possibilities are green dots, rest negative. So again, echoing the same thing, negative view for the beginning of the year. The, this is a chart of the S&P 500. It's a line chart showing the view for the last 30 months. So two and a half years, uh, view, and it goes up and down. Uh, but during the past month or so, you can see at the far right of the chart that is mostly going in a downward direction. It looks to me that, um, it is just kind of touching the 20 period moving average. It's a weekly chart. So 20 weeks, uh, as an average and it maybe it's broken through it a little bit, but not much. So I won't say it's quite broken through at this point. I put a black arrow from all the way October of 2022 to present. So that gives you a view, mostly positive. So where's it going to go from here? Is it going to break down and go on below that 20 period moving average? And if it does, in my opinion, it, it could go down quite a bit further. Uh, if it doesn't, it could bounce off of this and going back up. Cause that's what you see a number of times the way it works. I put this on a candlestick chart and you can see the view of the candlesticks that the, um, they go up and down, but the red ones indicate really a week that went started here and went down. The, the hollow ones are the ones that started here and went up. So mostly they are positive, but they're, you can see where it looks. It's the same chart. It's just put in a candlestick form. So you can see where they are. Uh, as you look toward the upper right of the chart, again, a pretty big red one, uh, for, uh, the last week. No, I take a, uh, relative shrink chart, take the NASDAQ 100 as a numerator and the S and P 500, the broad market as the denominator. So growth divided by the broad market. And over this 30 month period of time, mostly it's gone up, but a lot of that occurred in the early part of the chart. Whereas when you really look at the last year, it has gone sideways. So it's kind of favoring growth. And then the broad market, not going down much, not going up much. This is the inside the S and P 500 or growth stocks and value stocks. This is a relative shrink chart, putting growth as a numerator values denominator. So when it goes up, it favors growth. When it goes down, it favors value. So you can see, again, it's gone up and down, but over, this is a 24 month chart over this 24 months, you can see that mostly growth has been in favor. Now it's up at an elevated level right now. And is it going to come on back down? We'll have to see. But, uh, even in the past six or eight months, there's been a lot of up and down. The broad market, the S and P 500, which has value and growth in it, but it's all large companies divided by IWM, which is the ticker symbol for the Russell 2000 small cap index. So when this goes up, it favors the large cap, broad market. And when it goes down, it favors small cap. So again, in a two year period of time, a lot of up and down. And, uh, but this last week favored, uh, large cap, long-term government bonds. Uh, I'm not a fan of bonds and they are at times they are good when interest rates are going down, the price of bonds is rising. But what I think a lot of people have not been used to is that when, when interest rates go up or the perception that they're going up, then bonds tend to go down. And this is generally anything that is interest sensitive, certainly government bonds. Uh, for maybe about 40 years from the early 1980s to the year 2021, 2022, somewhere in that 40 year approximate time period, uh, or maybe even before that, maybe even 2020, uh, during that time period, uh, bonds generally, generally went up because for that time period, macro now, that time period interest rates generally were falling for 40 years. Remember where they were in 1980? Crazy high. And, but over that period of time, not in a straight line, but over that period of time, they worked their way down. And we got used to financial advisors, got used to and consumers got used to the fact that bonds were solid and they were a good, uh, counterbalance to equities in a balanced portfolio, 60, 40 buy and hold portfolio. Well, in the last five years, approximately that has changed. Interest rates are now going up or the perception is they're going up. And that means that bonds and bond, and by the way, bond yields are correlated with interest rates. Therefore the price of bonds tends to go down. You can see that drop here. I'm using the long-term government bond, but we could use corporate bonds or we could use intermediate term bonds. But the price of this ETF, TLT, excuse me, I was up, if you could see the far right of the chart, was up around 170, 172, something like that. And because this chart only takes you to 150 and it's all the way down to 180 or excuse me, down to 85. So the price of long-term government bonds have come down about 50% over that approximate five-year period of time. That is not very much help to a 60, 40 buy and hold stock bond portfolio. This is terrible. 2022 was the worst, the worst in a long, long time because bonds came down a lot. Equities also came down. Neither one helped each other. So anyway, that's my view on this. I am not a fan of buy and hold 60, 40 portfolios. I'm more tactical and this, this is a good reason why. Okay. The dollar, now this is interesting. The dollar now, not the market, not the economy, but the dollar, look at it. This is a four-year chart. I take it from, this is just using an ETF. Wow. That is amazing. Trajectory clearly to the upper right. The dollar strength against other currencies has been very favorable. And I'll just leave it at that. I mean, you know, spending money in other countries, travel purchases, your dollar goes a long ways. Conversely, when they spend money in the U S or invest money in the U S, travel in the U S, their currency does not go very far, or as far as it used to. Gold ticked up this last week, the last couple of weeks. And you can see that at the very, very far right of the chart. And again, this is a two and a half year chart, 30 months. And I drew a black line to show you the trajectory of gold. Definitely moving up and has stayed nicely above the 20 period moving average. Silver is not as a clean of a chart as gold is. It also had a favorable, excuse me, a favorable week. Matter of fact, a very favorable week, but it is below its 20 period moving average. And there's more up and down with the silver chart. Yes, it did over two and a half years did go up, but there was more stability with gold. Bitcoin had a little bit of a down week. You can see that at the far right of the chart, but again, over a two and a half year period, it's done very well and is currently well above the 20 period moving average. Volatility, because you know, the, the volatility go index goes in an opposite direction from equity. So Derek tends to, so when equities were down this past week, as I showed you, and down since the beginning of the year, you can see to the far right that the volatility index, the VIX actually moved up. So it's now around 19. If you look to the left, going from right to left, it went even back in the summer. It was in the teens, 12 to 13. So that's a big move up and it shows that there's risk that is coming into the market from, I'd say an intermediate term view, not a short term, maybe not a long term, but an intermediate term view. Asbury Research puts out their Asbury VI metrics. Last week we had two that were green, not enough to flip their signal to positive, but, this week it, because again, negative week, all six of them went back to red. Okay. I look at the cross asset relative performance, comparing one asset to another. And I look at the week, the month and the quarter. So it gives you kind of a short term to intermediate term view. Looking at all three time periods, large cap favored, small cap. We saw that in previous data. The US is stronger than emerging markets. When you use EEM as the ETF for emerging markets. High yield bonds, often called junk bonds were performed better than high quality bonds, government bonds. And short term bonds performed better than long term bonds. Again, all three time periods. When we look at comparing the US, this has been very favorable to the US. Comparing the market, again, not the economy and not the currency, but the market of the US using SPY as our proxy, comparing that to other countries for those three time periods, the three time periods, Italy and Germany were more favorable than the US. However, the US was more favorable than Malaysia, Japan, Hong Kong, Taiwan, India, China, Thailand, the Pacific, New Zealand, Australia and emerging markets. So you can see the very heavily weighted toward the Pacific and Asia. The US is stronger than South Korea. This is a four year chart and comparing SPY versus EWY a proxy for South Korea. It is a fairly smooth chart. It does favor South Korea at the very end of it. So when it comes down, that is positive for South Korea, but still well above the 20 period median average. Okay. Gold and silver. So I mentioned that gold had a positive week. It was up 1.9% from this past Friday compared to the previous Friday. And the spot price is $2,690. And in that one week as of this past Friday, and then silver was $30 and 97 cents. So this is the spot price and does not include the markup. Silver went up 4.2%, a nice move up for silver. And the gold silver ratio is now at 87 to one gold over silver. A monster box of silver is now $15,755. That's 500 generic rounds of silver. And that includes a markup of 78 cents per round per ounce. 78 cents. Now if you're a buyer or consider being a buyer of silver, you might look at that and go, I have never seen it that low. And that's what I'm going to say. I have never seen it that low. I was buying silver back in, uh, and gold, I think back in the late 1980s. And I was, I paid anywhere from, I believe a dollar 10 to a dollar 50 over that period of time markup. Um, everybody fluctuates and we've seen this. I mean, we saw it, uh, three, almost three and a half years ago, we saw, uh, silver, the markup on silver, it was a surging, you know, in demand. And we saw the markup go approximately to $5 an ounce. Wow. And the silver Eagles, which are, you know, have a higher markup. I remember seeing a price of $10 silver Eagle over spot. Now there were people who paid that, but I also remember having conversations with people who said, I will never pay $10 over spot for silver Eagle. Um, but that brings the price to, uh, $31 and 75 cents. When you count the 78 cent markup, a very attractive price, um, and certainly a very attractive markup if you're a buyer of silver. And this is a furnished to me by my son, Preston. Okay. Well, thank you for watching. Hopefully that was helpful. And, um, you have questions or comments, leave them in the comment section below.