Unemployment ExaggeRATE

Estimated read time: 2 minutes and 3 seconds

In this week’s newsletter:

1. Market recap

2. Top holdings: what I am buying & selling

Market Recap

YTD returns:

• S&P 500: +6.92%

• Nasdaq: +15.49%

• Russell 2000: -0.39%

• US Dollar ($UUP): -0.25%

• Gold ($GLD): +9.93%

March US Unemployment Rate: 3.5% Actual, 3.6% Forecasted, 3.6% Prior

There's no doubt that the unemployment rate is at the lowest levels in history....I have two eyes and can see that chart crystal clear.

So I wouldn't possible display more data that shows a main driver of this rate is the fact that the number of people working two jobs has been increasing?

That would be ruthless of me...so here it is!

Sadly, the Fed won't piece together this data when determining their need for future rate hikes. The fact of the matter is, a hot jobs market just gives the Fed more incentive to raise interest rates.

Also, a persistent market that had a solid start to Q1 gives them even more reason to poke the bear...

When the economy is strong and unemployment is low, there is often upward pressure on wages and prices as demand for goods and services increases. If this inflationary pressure becomes too high, the Fed may raise interest rates to reduce borrowing and spending, which can help to slow down economic growth and reduce inflation.

We know inflation is high. That's been clear.

But economic growth is NOT strong. GDP is declining, sequentially, as we know it.

Not only has GDP dropped (from damn near impossible comps) in the 2H of last year, but it's continuing to trend lower as we head into Q2 of this year.

What if it keeps trending lower? (hint: it will)

What if GDP reaches 0% growth? (hint: it will)

What if the Fed continues to raise rates despite the economy slowing? (hint: they will)

Buckle up, the odds are not in our favor.

In The Account | my top holdings

1. GOLD

   1. Outperforming the S&P 500...still.

2. BONDS

   1. GDP slowing means the long end of the yield curve will drop. That's bullish for bonds.

   2. $EDV, $TLT, $IIGD, $BNDD

3. US DOLLAR - $UUP

   1. Selling this, incrementally, on green days. The position size is not nearly where it was a year ago, but it's still a core position with growth slowing.

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, $NFLX

2. RETAIL - $XRT

3. HIGH BETA - $SPHB

4. CRYPTO - $BITO, $MSTR

5. HIGH YIELD - $HYG

6. ENERGY - $XOP

7. BASIC MATERIALS - $XLB

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.