Show me the MONEY

Estimated read time: 2 minutes and 30 seconds

In this week’s newsletter:

1. Market recap

2. Skills & data used this week

3. Top holdings: what I am buying & selling

Market Recap

YTD returns:

• S&P 500: +5.36%

• Nasdaq: +11.68%

• Russell 2000: +9.46%

• US Dollar ($UUP): +1.80%

• Gold ($GLD): +1.67%

This week in data reporting: ISM Manufacturing PMI

I'm not going to hammer this report any more than I already have in prior posts. It's real simple:

1. As demand softens, the need for manufacturing softens

2. Slowing 'new orders' (a measure of demand) means that companies are not running to their fullest utilization

3. Low utilization = lost revenue = profit margin pressure

4. All of this factors into a recessionary economy

Skills & Data Used This Week

Types of money supply:

M1: cash

M2: cash + funds in markets (savings, CDs, investments, etc.)

When the M2 money supply falls, it can have a negative impact on the economy for several reasons:

1. Decreased Economic Activity

When the money supply falls, there is less money available for businesses and consumers to spend. This, in turn, leads to a reduction in demand for goods and services, which can cause businesses to cut back on production and lay off workers. It can also lead to a further reduction in demand and a cycle of declining economic activity.

2. Deflationary Pressure

Deflation occurs when prices for goods and services decrease over time. This may seem like a good thing at first glance, but deflation can be harmful to the economy in the long run. When prices are falling, consumers tend to delay purchases because they expect prices to fall further in the future. This leads to a further decline in demand, which can cause businesses to cut back on production and lay off workers. The result is a cycle of declining economic activity that can be difficult to reverse.

3. Higher Interest Rates

 When the money supply falls, banks have less money to lend to consumers and businesses. As a result, they may raise interest rates to compensate for the reduced supply of money. Higher interest rates can make borrowing more expensive for businesses and consumers, which can reduce investment and consumption. This, in turn, leads to a further reduction in economic activity.

So how's our money supply currently?

We've only experienced the largest YoY decline in history...nothing to see here.

In The Account | my top holdings 

1. GOLD - $GLD

   1. A nice week for Gold and Gold Miners ($GDX). I'm selling the rip and will buy the dip.

2. CHINA

   1. I'm an American through and through, team USA all the way. But when it comes to money, I could care less what I'm invested in. The fact of the matter is, China is in an accelerating economy (America is not).

   2. $KWEB, $PDD, $LVS, $EWH, $EDU

On The Radar | positions I want to build / sizing up

1. NOTHING

Off The Grid | removed positions / short selling opportunities

1. TECH - $XLK, $QQQ, $GOOGL, $TSLA

2. RETAIL - $XRT

3. HIGH BETA - $SPHB

4. CRYPTO - $BITO, $MSTR

5. HIGH YIELD - $HYG

6. ENERGY - $XOP

Until next week....

-BW

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.