In a deep dive on market dynamics, John Lodra and Mike Preston of New Harbor Financial discuss the implications of high valuation levels amid potential Fed rate cuts. John highlights stress signals in credit markets and the rarity of current conditions. Mike shares insights on the risks of liquidity concentration in mega-cap tech and evaluates portfolio strategies. They also tackle whether the recent pullback in gold is a temporary lull or a trend change, offering tactical hedging advice for uncertain times.
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insights INSIGHT
Market Valuations At Historic Extremes
Valuations are categorically at all-time highs on metrics that predict future returns.
John Lodra warns high valuations raise risk of a massive reset to financial security.
insights INSIGHT
Fed Balance Sheet And Liquidity Stress
The Fed's balance sheet remains near $7 trillion after repeated QE cycles.
John Lodra links large Fed assets and QT changes to emerging liquidity stresses in credit markets.
insights INSIGHT
Credit Spreads Reveal System Fragility
Key money-market spreads and repo activity signal rising credit-market fragility.
John says these spikes help explain the Fed's sudden dovish shift and pause in QT.
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In this latest monthly outlook from the advisors at New Harbor Financial, John and Mike discuss investing in a world of nosebleed valuations levels during a time when the Fed is cutting rates.This doesn't happen often.What makes more sense: Ride the current party until it ends? Or play it safe and leave it early?We also discuss whether the gold trade is over, or just taking a breather before resuming.
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