Kiker: Our Market Stance Now on ‘Watch,’ Meaning We Will Be Selling Rallies

Executive Summary

In this episode, I had another fascinating discussion with Paul Kiker from Kiker Wealth Management about the current financial landscape and the potential market-moving impacts of recent political events. We delved into the economic and market implications of Trump’s recent speech to Congress, the Democrats’ lack of a clear plan, and recent market volatility that seems to signal that the long-overdue correction has arrived. One of the most striking observations was the dramatic drop in the Atlanta Fed’s GDP Now estimate, which fell from a positive 2.3% to a negative 2.8%, a true cliff dive that I’ve never seen before in this series.

Market Volatility and Turning Points

The current market volatility is reminiscent of the tops and bottoms I’ve seen in the past. Wild swings often indicate turning points, and this excess volatility seems to be a sign of a market top. Bull markets die hard, and the current environment feels like a topping process similar to the year 2000. This means that now is the time to be on defense watch, ready to act if necessary.  Indeed, Paul and his team have adjusted their alert level from ‘warning’ to ‘watch’, similar to the distinction between a tornado warning (meaning one is possible) to a tornado watch (meaning one is in the area).

Balanced Budget and Economic Impacts

Trump’s announcement of a balanced budget was astonishing, and it could have huge impacts. A balanced budget at this point could lead to a ripper of a recession unless taxes go way up. The government has been plugging holes with fiscal stimulus, keeping many companies afloat. If we move to a balanced budget, it could be deflationary, leading to bankruptcies for companies that can’t service their debt.

Gold and Silver Movements

The movement in gold and silver markets is unprecedented. Massive quantities of gold are coming into the United States, and it’s not retail driving this. It’s big money, and this is a sign that something significant is happening. Gold has outperformed Nvidia over the past year, and its performance against various currencies is impressive. The demand for physical silver is also notable, with 60 million ounces being delivered in March alone.

Key Data

• The Atlanta Fed’s GDP Now estimate fell from +2.3% to -2.8%.
• Massive quantities of gold are being imported into the U.S., with 200,000 kilo bars coming from Switzerland.
• 60 million ounces of silver have been delivered in March, a significant chunk of the available supply.