Many investors ignore the bond market as it is not as ’sexy’ as the stock market. What most fail to understand is that the global bond market is much larger than the stock market, according to Standard & Poors, the global bond market is close to $123.5 trillion (2020 totals), with $46 trillion of that in the US. By comparison, the global stock market

To be a successful investor you need to follow the global flow of capital. If you want to understand what is happening in the markets and why, you need to know what is happening in  the bond markets.

There are a few of ways to make money by investing in bonds:

  • Buy and hold bonds to maturity and collect interest payments, usually twice a year.
  • The second way is to is to profit by selling the bond at a price that’s higher than you paid for it
  • The third option, one that most aren’t aware of, is to use Exchange traded funds (ETF) which allow you to be long or short bonds. ETFs trade just like stocks, and you can buy or sell them with a click of your mouse.

We cover bonds, currencies, equities, commodities and precious metals in the Trend Letter, which is published for subscribers every Sunday afternoon.

When Governments Forget Who They Serve

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Civilizations rarely collapse in a single moment -they erode gradually, often in full view. One of the most telling signs? People leaving. Not for better weather, but for better opportunity, greater freedom, and fiscal sanity.

Time and again, excessive taxation, bloated bureaucracy, and anti-productivity policies have pushed citizens to vote with their feet. When governments punish innovation and reward dependency, they chip away at the engines of growth: entrepreneurship, self-reliance, and personal responsibility.

No state can sustainably support its people by consuming more than it creates. When incentives shift from contribution to entitlement, stagnation takes root—and resentment between the taxed and the subsidized grows.

This isn’t theory. It’s history. And the pattern is clear: when governments prioritize control over service, decline isn’t just possible—it’s inevitable. The signs are all around us. The only question is: will we listen, or repeat the cycle once again?

Cheers!

Martin

Markets Slide as Political Turmoil Erodes Confidence

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Global equities tumbled Monday, driven by political instability, policy uncertainty, and rising trade tensions. Trump’s threat to fire Fed Chair Jerome Powell further undermined confidence in the Fed’s independence and the broader US financial system.

The S&P 500 heatmap was a sea of red, with Netflix a rare bright spot. Major tech names led the decline: Tesla (-5.75%), Nvidia (-4.51%), Salesforce (-4.45%), and Meta (-3.51%).

S&P 500 Technical Analysis

For the S&P 500, initial resistance is at 5,500 (lower red horizontal line); a break above that opens the door to 5,700 (upper red horizontal line). Support sits just under 5,000 (upper green horizontal line), with 4,800 (lower green horizontal line) as a key weekly level to watch.

Any positive trade deal headlines could spark a bounce this week, but further US–China escalation would cap upside potential. The longer uncertainty lingers, the greater the damage to the global economy, and declining business and consumer confidence is a long-term drag on equities.

For short-term traders, a dip to  5000 could trigger a bounce, but any rebound is likely capped at 5400.

Bond Yields Rising

Yields jumped on inflation fears, declining foreign demand, and policy chaos:

  • Tariff Shock: Trump’s April 2 tariffs first triggered recession fears, then inflation worries—pushing yields higher.
  • Foreign Selling: China and Japan cut Treasury purchases, while weak auctions and hedge fund deleveraging sent the 10-year yield to 4.5% intraday (April 8). Many allies, frustrated with Trump, see little reason to back U.S. debt.
  • Economic Risk: Higher yields threaten U.S. debt servicing ($37T) and consumer borrowing, deepening financial stress.

Flight to Safety

Gold hit a fresh all-time high at $3,422, now up 31% year-to-date, on pace for its best annual gain since 1979. Though technically overbought, it remains the go-to safe-haven. Trade war fears are driving investors, hedge funds, and central banks to unload US assets and pile into gold.

The primary retail buyers are in Asia.

Looking back to gold’s 2011 high, we see it trading within two parallel channels. The last time we saw intersecting channel, it marked a major low in late 2022 (lower white circle).

With the lines crossing again near current levels (upper white circle), this could signal a potential short-term top. A meaningful pullback from here could present a solid buying opportunity.

Bitcoin Rallies as Dollar Slides

Bitcoin posted its strongest day in weeks, fueled by a combination of macro pressures and renewed institutional interest. Confidence in traditional assets took a hit as Trump’s attacks on the Federal Reserve and its leadership weakened the US dollar, driving investors toward Bitcoin as a hedge. Meanwhile, institutional demand picked up, highlighted by Japan’s Metaplanet buying 330 additional BTC and strong inflows into US Bitcoin ETFs.

Bitcoin is now testing initial resistance at $88.3K, with major resistance at $92.5K – the same level that served as strong support from November through December.

Keep your head on a swivel  – this is far from over!

Stay tuned!

Martin

Markets Rally, Bonds Break, Gold Soars—What You Need to Know

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Markets End Volatile Week with a Strong Rebound – April 11, 2025

Markets capped a wild week with a strong finish, shrugging off trade war shocks and riding a wave of optimism:

  • Stocks Bounce Back: After days of volatility, the Dow surged 600 points (+1.6%), the S&P 500 climbed 1.8%—its best week since October 2023—and the Nasdaq jumped 2.1%, led by a tech resurgence.
  • Trade War Tensions: Markets were rattled by China’s retaliatory tariffs of up to 125% and President Trump’s aggressive 145% hikes on Chinese imports. Yet, solid bank earnings and cooling inflation helped restore investor confidence.
  • Flight to Safety: Gold soared to a record high as a safe-haven play, while 10-year Treasury yields surged to 4.53%, approaching multi-decade highs.
  • Tech Leads Recovery: Mega-cap tech stocks including Nvidia, Microsoft, and Tesla staged a strong rebound after Thursday’s sharp selloff.

Despite intense geopolitical and market pressure, Wall Street closed the week with notable strength, showing surprising resilience.  ​The  S&P 500’s performance for the week ending, was its strongest since November 2023. Here is today’s heat map:

How 145% Tariffs on Chinese Imports Could Shock U.S. Consumers

With over 70% of key consumer goods like smartphones, furniture, and video games sourced from China, tariffs could trigger sharp price hikes across everyday essentials.

Bond Market Flashing Red: Why Yields Are Surging Despite Stock Market Weakness

There’s a notable shift in Trump’s focus this term compared to his first. Back then, he constantly cited the stock market as proof of a strong economy. This time, he’s barely mentioned it.

Instead, the emphasis is on policy—tax cuts, deregulation, spending restraint—and notably, lower borrowing costs. His Treasury Secretary, Scott Bessent, a former hedge fund manager, has made it clear: the goal is to bring down the 10-year Treasury yield.

But the market isn’t cooperating.

The 10-year yield, which dipped to 3.7% on April 4, has surged to nearly 4.5%—an 80 basis point jump in just one week. That’s the opposite of what Trump and Bessent want. Rising yields suggest the bond market expects higher inflation, even as economic growth slows—a recipe for stagflation.

Stagflation puts the Fed in a tough spot. Cutting rates could fuel inflation, but rising yields make borrowing more expensive for consumers, businesses, and the government.

So why are bonds selling off while stocks are falling? Isn’t the bond market supposed to be a safe haven?

The first part of the answer  answer lies in the scale of US borrowing. The government needs to issue $7–8 trillion in new debt this year to fund ongoing deficits and refinance maturing debt. With annual deficits exceeding $2 trillion and total debt above $37 trillion, supply is overwhelming demand.

Layer in the geopolitical angle: the US and China are in a full-blown trade war. China—America’s second-largest foreign bondholder—has leverage. If China were to start selling US Treasuries while the US is issuing trillions more, bond prices would plunge and yields would spike.

Plus, many US allies aren’t exactly eager to support bond auctions while facing tariffs of their own. Why help fund a government that’s targeting your economy?

If yields continue climbing toward 5% or higher, it could spell serious trouble for the US economy—and likely drag the stock market down with it.

Gold Surges to New Highs as Safe Haven Demand Soars

Gold is ripping higher—up $70 today to a fresh all-time high of $3,250.

Just last week, it dipped to $2,970 during a broad market panic that triggered liquidation across all assets—gold included. It was a classic case of the baby getting thrown out with the bathwater. But that selloff didn’t last. Investors quickly stepped back and asked: What are the real safe haven plays right now?

Treasuries? The yen? Neither offer the confidence they once did. Bitcoin has been trading more like a tech stock than a store of value. That leaves gold—and it’s showing why it still holds safe-haven status.

Notably, gold doesn’t look like a crowded trade. COT data last Friday showed net-long positions at year-over-year lows, a bullish contrarian signal.

Yes, gold is expensive relative to other assets:

  • The gold/oil ratio is at 53:1 (vs. a historical average of ~20:1).
  • The gold/silver ratio has ballooned to 103:1 (vs. a long-term norm around 50–60:1).

But these extreme ratios reflect deep global uncertainty. The West’s seizure of Russian reserves and removal from SWIFT showed that financial infrastructure can be weaponized. That sent a clear message to countries like China, Russia, and Iran: don’t trust the West—buy gold.

Add in today’s escalating trade wars and rising geopolitical risk, and it’s no surprise that central banks are aggressively adding to their gold reserves. Retail investors are following suit, looking for a hedge amid global turmoil.

Key levels to watch:

  • Resistance: $3,300
  • Initial support: $3,050
  • Major support: $2,960 (last week’s low)

For now, gold remains in a strong uptrend. It may pause or consolidate, but there’s little to support a bear case in the near term.

Stay tuned!

Trump’s Victory Fuels Market Frenzy: Today’s Charts

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The S&P 500 soars: The stock market skyrocketed with Trump’s victory and the Republicans securing the Senate and poised to claim the House.

Bitcoin soars to new high: Bitcoin surged past $75,000, driven by Trump’s pledge to establish the US as a leading crypto hub. This rally reflects heightened investor optimism around a potential crypto-friendly regulatory environment under the new administration.

US Dollar blasts higher: The dollar marked its strongest day since 2022 on a strong stock market and rising yields.

Bank stocks rally: Bank stocks soared as investors anticipated deregulation and economic growth under the new administration. Major institutions saw substantial gains, with JPMorgan Chase leading the way, up 13% today.

Gold falls: With a huge rally in the US dollar, gold got clobbered, down 73.00 for the day.

Bond market turmoil: While Trump’s policies are welcomed by the stock market, the bond market is reacting less favorably. Expectations of lower tax revenues and higher government spending point to rising deficits and ballooning debt. As inflation expectations climb, the value of fixed-income investments erodes, pushing investors to demand higher yields, which drives bond prices down. This dynamic reflects concerns over inflation and fiscal imbalances under the new administration.

Green stocks get hammered: Companies in the green energy sector saw sharp declines, with solar stocks such as Sunnova Energy plummeting—Sunnova dropped a staggering 51% today. This sell-off underscores investor concerns about reduced environmental policy support under Trump’s administration, casting uncertainty over the future of renewable energy initiatives.

Market insights: This political landscape gives Trump significant leeway to implement his pro-business agenda—lower taxes and reduced regulations—which investors see as fuel for market growth and economic expansion. The rally reflects Wall Street’s optimism about a policy environment favoring corporate earnings and business-friendly reforms.

 

 

This Week’s Key Market Highlights:

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October 25, 2024:

The S&P 500 dip:  The first weekly decline after six gains suggests a potential bounce next week, though election volatility could bring market jitters, especially if results are delayed.

US Election Countdown: With just 10 days until the election, markets leaning toward a Trump victory due to his pro-deregulation stance, seen as favorable for business.

Rising Bond Yields: Concerns about persistent inflation are pushing bond yields higher, limiting room for Fed rate cuts. The Bank of Canada cut rates by 50 bps to 3.75%, and the ECB by 25 bps to 3.4%, contrasting with the Fed’s 5%.

Rising Mortgage Rates: Contrary to expectations, mortgage rates are rising, tracking higher bond yields despite the Fed’s September rate cut.

US Dollar Surge: Up 4% since late September, the dollar’s strength reflects robust US economic data, solidifying it as the “least ugly” currency in uncertain times.

Canadian Dollar Weakness: As the Bank of Canada cuts more aggressively, the loonie falters amid Canada’s weaker economic outlook.

Homebuilder Setbacks: Rising mortgage rates weigh on homebuilder stocks.

Gold Near Highs: Gold is nearing new highs with its RSI around 70 (bottom of chart), signaling potential overbought conditions and a possible pullback.

Market Insights: Bullish trends continue, but election uncertainty looms. A clear election outcome may trigger a ‘sell the fact’ reaction.

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Why the Bond Market Fears Inflation Despite Fed Rate Cut?

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Why Retail Investors Should Pay Attention to the Bond Market

Many retail investors overlook the bond market, dismissing it as too complex or less exciting than stocks. However, bonds hold the key to understanding broader economic trends, especially interest rate movements. Ignoring them means missing out on critical insights that could enhance your investment decisions

The Unexpected Rise in Long-Term Rates

On September 18, 2024, the US Federal Reserve announced a significant 50-basis-point rate cut, the first since July 2023. Typically, rate cuts are designed to lower borrowing costs, leading to a drop in bond yields. However, this time, the opposite happened—interest rates on 10-year bonds went up, not down. So, why are these longer-term rates rising?

The impact was also felt in the real estate sector. The 30-year US mortgage rate jumped back to 6.69%, a surprise to many who expected lower mortgage rates following the Fed’s rate cut. This spike has left homeowners and real estate professionals rethinking their expectations.

Why Inflation Expectations Are Rising

To understand why bond yields and mortgage rates are rising, we need to look at the underlying factors driving these movements. One major reason is long-term inflation expectations. While the Fed may believe inflation is under control, the bond market seems to think otherwise. One of the key reasons why is related to soaring government deficits:

  1. Reckless Government Spending: The US government’s increasing debt levels mean more bonds are issued, leading to a flood of new supply.
  2. Replacing Maturing Bonds: New bonds must be issued to replace those that are maturing, adding more supply.
  3. Funding New Debt: Continued high levels of government spending require new bonds to finance the debt, driving yields higher as investors demand more to take on increased risk.

Since the debt ceiling was suspended on June 2, 2023, the US has added a whopping $4.3 trillion to its debt total, with national debt fast approaching $36 trillion. To put it into perspective, the $600 billion increase over the last two months is nearly three times the annual budget of NASA.

Navigating the Current Investment Landscape

Clearly, the bond market is sending a warning signal: inflation is not as controlled as we might like to believe, and expectations are that it will continue to rise. As inflation erodes the purchasing power of the dollar, many investors are turning to alternative assets like gold and Bitcoin.  Gold closed at a new all-time high today.

These assets offer a limited supply, making them less susceptible to devaluation. Unlike paper dollars, governments cannot print new gold or bitcoins out of thin air, which is why they remain popular as inflation hedges.

 Why You Should Stay Informed

Our team at the Trend Letter has been monitoring these developments closely. We’ve been publishing insights for over 22 years, helping our subscribers stay ahead of market shifts with timely alerts and data-driven analysis. Our models have consistently alerted us to key changes in the market, and our current portfolio is up 39% this year.

We provide our subscribers with weekly reports every Sunday evening, covering all major sectors, key events and trends to watch, including:

  • The effects on the markets of the upcoming US election
  • Central bank actions
  • Inflation trends
  • Potential recession risks
  • Seasonal market movements

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Our goal is to keep you informed and prepared for any market scenario. Join our community of savvy investors and stay on top of the trends that matter most.

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Stay tuned!

This Week’s Trends & Market Highlights

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October 18, 2024 Key Market Highlights This Week:

Gold reaches a new all-time high despite rising interest rates and a stronger U.S. dollar, driven by surging national debt.

The S&P 500 breaks through to a new record high, signaling strong market momentum.

Uranium stocks ratchet higher, fueled by increasing demand for energy, especially from AI data centers.

Semiconductors roaring  back, with Nvidia testing new all-time highs.

Market Insights: We’re witnessing a broad-based bull market across multiple sectors, even as bond yields rise and economic indicators fluctuate. Look out for a comprehensive update in this Sunday’s issue of the Trend Letter.

Special Offer: As a free subscriber, you can now upgrade to the full Trend Letter subscription at a 33% discount this weekend. Don’t miss out—click below to take advantage of this special offer.

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This Week in Money Interview

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Martin did his monthly interview with Jim Goddard on the This Week in Money show. Topics discussed were:

  • Stock market trends
  • Gold coming into seasonal strength
  • Have geopolitical events been priced into oil?
  • Why has the $US been rising, especially given the Fed just made a deep rate cut?
  • The Fed says its not worried about inflation anymore, should they be?
  • There is a lot of mainstream media talk about a Soft vs Hard landing. What does it mean and how should investors prepare for either scenario?
  • The Fed cut rate 50-bps, and now the long bond yields are rising, which seems counterintuitive. Why is that happening?
  • The Shanghai stock exchange had wild swings in the past week, what is happening there?
The other guests on the show—Ross Clark, Victor Adair, and Josef Schachter also offer sharp perspectives on the current market landscape. Tune in!

Click here to listen.

Market Notes

Market Action Amid Global Tensions

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We labeled Friday’s update as ‘Today’s Market Activity: A Critical Factor for Potential BUY Signals.’ However, over the weekend, a conflict erupted in the Middle East. On Monday, the financial markets opened predictably to the Hamas attack on Israel, producing a near-term decline, but then surprisingly, the markets rallied, with the S&P500 closing up 27 points.

So far, here on Tuesday morning, that rally has continued, with the S&P 500 up ~40 points at time of this writing.

Whenever global conflicts arise, the US bond market often emerges as a ‘safe haven’ investment option. This trend was evident on Monday as the sharp decline in bond prices began to reverse, resulting in higher bond values and lower yields.

In Friday’s update, we highlighted the S&P 500 was testing its critical support level, and when it held, we issued a BUY Stop signal, which was triggered on Monday.

We also issued a BUY Stop signal for a gold trade, which hasn’t yet triggered.

Subscribers can anticipate receiving more signals from us, potentially in the next day or two, as we keep a close eye on the energy sector, cannabis, and even the homebuilders for potential opportunities.

Upcoming this week are the PPI and CPI inflation data in the US, so any upside surprise in either of those could send bond yields spiking again, so we need to tread carefully.

Lastly, our exclusive Special Offer, offering discounts ranging from 40% to 65% off regular prices closes at the end of the day TODAY.  It’s your money, take control!

Stay tuned!

No BUY Signal just yet

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As an investment newsletter, we strive to bring the best information to assist those who want to become better, more successful investors.

Bond yields:

Investing in bonds. The recent market turmoil is predominantly driven by concerns over long-term bonds and their elevated yields, as investors brace for the prospect of enduring high borrowing costs. The underlying issue for the long bond market stems from the ongoing accumulation of substantial deficits and debt by the US government, compounded by the fact that China and Japan, historically the largest purchasers of US bonds, are now sellers of them.

Currently, the US is making interest payments of $909 billion on its debt, as reported by the Federal Reserve. With the primary buyers of US debt transitioning into sellers, a pressing question emerges: who will step in to purchase this debt? As potential buyers remain on the sidelines, market dynamics are pushing yields higher in an attempt to attract new investors.

Remember, the Fed only controls the short-term rates, the market controls long-term rates.

Equities:

Investing in stocks. Although the recent selloff in equities showed some signs of slowing down on Wednesday, investors remain vigilant for any potential resurgence in volatility, particularly if the upcoming US non-farm payrolls data on Friday exceeds expectations. On Wednesday, the S&P 500 made a noteworthy rebound, surging by 34.30 points to reach 4,263.70, thanks to early buyers stepping in. However, as of this moment, it has started the day with a lower opening and has retraced much of those gains, currently down by 25.39 points.

Oil:

Investing in oil. In our previous Trend Letter last week, we anticipated a retracement in oil prices from their peak at 94.00, prompted by an elevated Relative Strength Index (RSI) reading of 78.00, with any reading above 70 indicating an extreme overbought condition. Subsequent to reaching that high, oil has experienced a decline of approximately 10.00, settling around our initial support marker at $86.00, concluding Wednesday’s session at 84.22. This morning, there has been a slight uptick, but at the time of this writing, the market remains relatively flat. Our next anticipated support level for oil stands at 79.70, and we expect it to test that level in the near future.

Gold:

Investing in gold. Gold continued its struggles Wednesday, down ~7.00 to 1834.80. Over the past few months our projected lower target for gold has been 1825. At the time of this writing gold is trading at 1828 and is exhibiting oversold conditions. We are on the verge of our models issuing a BUY Signal, but it hasn’t triggered it yet.

It’s essential to emphasize that we are trend traders, requiring more than just an oversold market condition. The market must exhibit a convincing rally potential. While we believe we are approaching that point, confirmation is still pending.

As soon as we receive that confirmation, we will promptly notify our subscribers. If you haven’t subscribed yet, our exclusive Special Offer, providing discounts ranging from 40% to 65% off regular prices, remains accessible until this Saturday. It’s your money, take control!

Stay tuned!