Proflex Market Update - Wk 39

Proflex Market Update - Wk 39

Dear Subscribers,

This past week delivered the perfect goldilocks scenario, with the FOMC cutting rates by 50 basis points (bps) and reassuring the markets with a strong economic outlook. Chair Jerome Powell emphasized that while inflation is under control, the economy remains robust. This confirmation, paired with the Bank of Japan’s (BoJ) decision not to raise rates, eased concerns surrounding the Yen Carry Trade. With both these key central bank actions, markets surged, pushing the S&P 500 to new All-Time Highs at 5700+.

Short term yields are dropping fast

Conservative investors have enjoyed great returns in Money Market Funds in last 12 months with 5%+ returns on cash holdings in their brokerage. Those returns will not last long as short term yields come down and we are seeing heavy buying in bonds in recent times to lock in higher yields for longer durations as well.

Bonds have not performed as well as equity in 2024 but our Income Insider portfolio is perfectly positioned to capitalize on the upcoming rate cuts. This portfolio has consistently delivered double-digit annualized returns while maintaining a conservative risk profile, ensuring that our subscribers benefit without facing significant drawdowns. As the rate cut cycle begins, we expect further strength in these positions, positioning our portfolio for continued growth while protecting against volatility.

We have been guiding our subscribers to lock in higher yields for last few months and we are now seeing benefits for moving early as yields are dropping fast.

Tech Stocks and Semiconductors Lagging

Despite this broad market rally, tech stocks have continued to lag behind, especially when compared to the broader S&P 500. In particular, semiconductor stocks, which were the highlight of the last 18 months, have struggled in recent weeks. The SMH (VanEck Semiconductor ETF) has been testing its 200-day moving average (DMA) and recently showed signs of a breakout. This breakout will be critical to sustaining the S&P’s new highs, as semiconductors are crucial for the ongoing tech-driven growth narrative.

Bitcoin’s Potential Breakout and Macro Pressures Much like tech stocks, Bitcoin has faced significant struggles due to increased liquidity pressures from large sellers, including Mt. Gox creditors, various government agencies, and long-term holders taking profits. However, Bitcoin’s recent recovery above $60K, and more importantly, its break above the $64K level and the 200DMA, signals potential for a fresh breakout. Bitcoin could now be poised to retest its All-Time Highs (ATH) as macroeconomic forces shift toward easier monetary policy. ​ Free Weekly Insights Get This Analysis Every Week Join 250+ investors at Google, Amazon & Apple who start their week with Proflex. Subscribe Free No spam. Unsubscribe anytime. We’ve long highlighted the correlation between expanding M2 money supply and Bitcoin’s price appreciation. With the Fed signaling a rate cut cycle and M2 supply finally expanding after a prolonged contraction, we believe hard assets like Bitcoin and precious metals are positioned to thrive. Gold, in particular, has rallied to its all-time high, and this trend aligns with the expectation that assets with intrinsic value will perform well in a lower-rate, liquidity-driven environment. Our Growth Gazette portfolio has benefited significantly from gold’s rise, and we expect similar gains from Bitcoin as we head into the next monetary easing cycle. We recommend our subscribers maintain their positions in hard assets and growth stocks while preparing for more significant opportunities in the months ahead. Proflex All-Access Continues to Outperform Markets For more insights on how to capitalize on market volatility and stay ahead in this dynamic environment, consider joining Proflex All-Access. Proflex All-Access: Your Market Compass Explore the financial markets with Proflex All-Access, your comprehensive resource for deeper market understanding and active participation. This premium service offers subscribers exclusive insights and actionable investment advice, giving you a significant edge in various market conditions. ​ Proflex All-Access provides detailed analyses and recommendations to optimize your investment strategy. Our specialized newsletters include: ​ • Growth Gazette: Aimed at achieving above-market returns for aggressive portfolio growth. • Income Insider: Focused on conservative strategies and income generation for yield-seeking investors. • Crypto Pulse: Offers advanced strategies for investing in the rapidly expanding cryptocurrency market. ​ Feel free to send us your queries at proflex@proflexfinance.com Best regards, Raman Bindlish Editor-in-Chief, Proflex Finance ​ ProFlex® by Proflex Finance​ ​Legal Disclosures ProFlex® by Proflex Finance, the premium newsletter product series, provides informational and educational content only and does not offer personalized investment advice or establish a fiduciary relationship. While we rely on reliable sources and research, the information is not tailored to individual financial situations. Readers are urged to consult qualified financial professionals before making investment decisions. We do not guarantee the accuracy, completeness, or timeliness of the information and are not responsible for any investment decisions based on this newsletter. Investing carries risks, and past performance doesn't predict future results. By accessing this newsletter, you acknowledge that we are not liable for actions or decisions resulting from its content. Please conduct due diligence and seek professional advice as needed.