Black Friday
For those who don't recall the etymology of "Black Friday", historically it was the day of the year when retailers finally turned a profit. Up until this day of the year, brick and mortar retailers were in the red financially, due to their high fixed costs. Which clearly indicates that without Christmas, most retailers would not survive.
Alternatively, of course Black Friday has come to be known as the last day to get out prior to a massive Monday crash.
Which gets us to the casino. November closes out the month on a giddy high following Trump's election.
Below we see the MAGA ETF has risen for five months straight, since the August low. Which is how long last year's end of year rally lasted:
Pundits are of the belief that Trump's re-election has been good for "World" stocks:
"Donald Trump's Nov. 5 election victory and pledges of tax cuts, deregulation and import tariffs have supercharged investors' expectations for U.S. and Wall Street stocks to keep outperforming other regions"
This headline states that Trump has been good for "World stocks" and then the article admits that Trump has only been good for U.S. stocks. It's what I call the "rope-a-dope".
Below we see the World ex-U.S. has been down for two months straight and is closing below the 200 dma for the first month in the past year.
On the speculative front, since last week, Bitcoin/Crypto both imploded and AI stocks imploded led by Nvidia, while defensive stocks took over market leadership. Last week Microstrategy got pounded and this week Bitcoin followed suit.
Pundits are finally catching on to how Microstrategy CEO Michael Saylor is manipulating markets:
"MicroStrategy employs a cyclical approach: issue debt, buy bitcoin, and use the higher stock price to repeat. This approach has drawn criticism, with detractors likening it to a Ponzi-like model due to its reliance on debt and excessive leverage"
I would add that the single stock leveraged ETF has further amplified the Ponzi-like returns from this gambit:
Here we see that the leveraged ETF has been demolished since the high last week:
On the topic of Ponzified markets, the price/earnings ratio for the S&P 500 has now eclipsed the level from late 2021:
In summary, the world ex-U.S. is imploding, and U.S. investors are enjoying Black Friday.
Overnight, the Yen surged and the $USDJPY crashed as bets on another BOJ rate hike surged the most since Black Friday of this past August. Which is now long forgotten.
"The yen jumped more than 1% against the U.S. dollar to a six-week high on Friday after faster-than-expected inflation in Tokyo supported bets for a Bank of Japan interest rate hike next month"
