goldman | Billionaire's Portfolio

July 5, 5:00 pm EST

I hope everyone had a great Fourth of July yesterday. Today, the markets continue to be thinly traded as we head into the jobs report tomorrow.

We did get minutes from the recent Fed meeting today. This is a closer look into the views of the Fed from their June meeting. Of course, we already had a lot of information from that June meeting: the Fed hiked rates for the second time this year, they telegraphed an additional hike for the year in their projections, plus the June meeting was also accompanied by a press conference from Fed chair Jay Powell. And his explicit “main takeaway” was … “the economy is doing very well.”

With this in mind, as we head into tomorrow’s jobs numbers, the 10-year yield is probably the most important chart to watch. While inflation isn’t near reflecting an economy that’s running hot, the interest rate market is even more disconnected.

Remember, back on May 18, in my Pro Perspectives note, we discussed this chart …

As the world was becoming concerned with the speed and level of market interest rates, we had this big technical reversal signal hit for the key 10-year government bond yield.

We focused on this in my May 18^th piece, where I said “this technical phenomenon, when closing near the lows, is a very good predictor of tops and bottoms in markets, especially with long sustained trends.” And I said, “I suspect we may have seen some global central bank buyers of our Treasuries today (which puts downward pressure on yields) to take a bite out of the momentum.”

Today the chart looks like this …

So, that outside day did indeed predict a reversal. And we head into tomorrow’s job report with the benchmark 10-year yield at just 2.84%. That’s in a world where the economy is running at 3% growth and unemployment is under 4%.

But this disconnect may be changing tomorrow. The key data point tomorrow will be wages (Average Earning), not jobs. A hot number there will likely turn this around, and bring higher rates back into the picture.

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Economy Looks Like Early Stages Of An Economic Boom

September 18, 2017, 4:30 pm EST Invest Alongside Billionaires For $297/Qtr

BR caricature As I said on Friday, people continue to look for what could bust the economy from here, and are missing out on what looks like the early stages of a boom.

We constantly hear about how the fundamentals don’t support the move in stocks. Yet, we’ve looked at plenty of fundamental reasons to believe that view (the gloom view) just doesn’t match the facts.

Remember, the two primary sources that carry the megahorn to feed the public’s appetite for market information both live in economic depression, relative to the pre-crisis days. That’s 1) traditional media, and 2) Wall Street.

As we know, the traditional media business, has been made more and more obsolete. And both the media, and Wall Street, continue to suffer from what I call “bubble bias.” Not the bubble of excess, but the bubble surrounding them that prevents them from understanding the real world and the real economy.

As I’ve said before, the Wall Street bubble for a very long time was a fat and happy one. But the for the past ten years, they came to the realization that Wall Street cash cow wasn’t going to return to the glory days. And their buddies weren’t getting their jobs back. And they’ve had market and economic crash goggles on ever since. Every data point they look at, every news item they see, every chart they study, seems to be viewed through the lens of “crash goggles.” Their bubble has been and continues to be dark.

Also, when we hear all of the messaging, we have to remember that many of the “veterans” on the trading and the news desks have no career or real-world experience prior to the great recession. Those in the low to mid 30s only know the horrors of the financial crisis and the global central bank sponsored economic world that we continue to live in today. What is viewed as a black swan event for the average person, is viewed as a high probability event for them. And why shouldn’t it? They’ve seen the near collapse of the global economy and all of the calamity that has followed. Everything else looks quite possible!

Still, as I’ve said, if you awoke today from a decade-long slumber, and I told you that unemployment was under 5%, inflation was ultra-low, gas was $2.60, mortgage rates were under 4%, you could finance a new car for 2% and the stock market was at record highs, you would probably say, 1) that makes sense (for stocks), and 2) things must be going really well! Add to that, what we discussed on Friday: household net worth is at record highs, credit growth is at record highs and credit worthiness is at record highs.

We had nearly all of the same conditions a year ago. And I wrote precisely the same thing in one of my August Pro Perspective pieces. Stocks are up 17% since.

And now we can add to this mix: We have fiscal stimulus, which I think (for the reasons we’ve discussed over past weeks) is coming closer to fruition.

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Trump’s Secretary Of State Pick Might Be Brilliant

December 13, 2016, 4:00pm EST

Last week we talked about how a visit to Trump Tower was becoming a good predictor of a success for your stock.

Goldman continues to build representation in the Trump administration with the latest addition, Gary Cohn (current COO and President of Goldman Sachs) as the National Economic Council Director. And hedge funder Anthony Scaramucci, a Goldman Sachs alum and current member of the Trump transition team, is rumored to be in the running for a role in the administration. Goldman’s stock continues to rise, as the best performer in the Dow Jones Industrial average since Election Day (up 31%).

And remember, we talked about the visit last week of Masayoshi Son, the Japanese billionaire and majority stake holder in Sprint. Sprint is up 32% since election day.

So now we have the latest, and one of the most important cabinet appointments, Rex Tillerson, who will be Secretary of State. He’s the Chairman and CEO of Exxon Mobil, the biggest energy company in the country and one of the largest publicly traded companies. Exxon was up 2% today, and is up 9% since the election — better than the broader market, but not quite as good as the stocks of some other Trump Tower visitors.

This is a very interesting pick. Given that the President-elect has openly talked about using oil as an economic weapon (on Iraq… “we should have taken the oil”). We now have one of the world’s most respected experts in oil, and in negotiating around oil, charged with stabilizing the middle east and relations with Russia (to name a few). And given that the hot spot of global instability surrounds countries (or regimes) that are highly dependendent on oil revenue (funded by oil revenue), we have a guy that could credibly utilize leverage emerging U.S. supply, and global demand of the developed world, as a bargaining chip. His appointment/presence may also end up yielding a stable oil price environment going forward (tempering the manipulation of price extremes by OPEC).

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