MAY 28 T3

1) UD DOLLAR - Headed higher?
2) SENTIMENT - Big boost
3) M2 - Printer is back.

Episode Transcript

Speaker 1 (00:00):
Now here's your chair for my wealth guy, Chris Kleine.
Good morning, Happy Wednesday, May twenty eighth, twenty twenty five.
Welcome to today's top items. First one US dollar, second sentiment,
third M two US dollar. So we talk about the
dollar as being important for major macro because it is

(00:23):
a major macro item, and that continues to be true.
We have to think about what is it going to
take for stocks to work higher, and the math says
that you need a series of higher lows for the
US dollar, which would amount to ending up in lower
highs for gold. Will we get that, I don't know.
But the signals, which again our rate of change of price,

(00:43):
volume and volatility, are still signaling that that is in
play because we're getting the low end of the daily
trade range at ninety eight to fifty nine for DXY,
which is the dollar index. So far May twenty six
is a higher low for the dollar, the dollar index,
that is, and now it needs a higher high and
the signal is just not there yet. The recent closing

(01:06):
high for d XY was one oh one seventy eight
on May twelfth. The signal is at one oh one
sixty four. So as soon as we see that signal
hit a higher high. We could see dxy go test
that level, and if it does well, then that will
be a higher high and a tailwind for stocks, and

(01:27):
that's the tailwind that they need to keep moving higher
longer term. You know, that probably is the case. Shorter term,
of course, in most cases it's it's anyone's guess, but
that's what we're seeing so far are the series of
higher lows and so far not quite there, but working
on the higher highs. Sentiment is working in Bull's favor.

(01:50):
Consumer confidence data jumped to ninety eight, which is quite
a bit higher than the estimated eighty seven point one,
and it's a very strong acceleration from the previous eighty
five point seven data point. So what's it say. It
just says that Americans are getting more confident about the economy.
But at the same time, there is just so very
little exuberance, and that's a good thing for stock prices.

(02:12):
In general. Positioning and sentiment remains muted across the board
no matter where you look. Hedge fund leverage is at
cycle lows, CTAs and systematics are neutral. There's get this,
there's over seven trillion dollars parked in money market funds.
People are scared to death and they're holding onto this

(02:32):
cash and just watching that cash value erode, deteriorate, get
eaten away by the reacceleration of inflation. But nevertheless, seven
trillion dollars in money market funds is a lot of
gas to fuel the market engine. So when you have
this little of exuberance, it's just really hard to get
very bearish from here. The last thing I want to

(02:53):
chat about is M two liquidity. Right, liquidity is a
key driver for risk out and the US money market supply.
M two having hit an all time high for April
for the first time in three years, that should be
interesting to everybody. It just looks like money printing's back,
So that sort of makes me wonder if there's a

(03:15):
larger bond market revolt in the cards too. I'm not
going to guess. The best way to identify is just
to watch yield signals on the flows, and right now
the US ten year yield is still signaling higher highs
and higher lows, with the potential to see in the
near term rates tap four point three percent before they
start trending higher again. That is possible. Will we get
it anybody's guess depends on the narratives that get floated

(03:39):
out and the headlines about deficits and more debt and
all that. Yields are still bullish trend. That's what you
need to know. So the bond market is going to
be under pressure until the yield structure is no longer
bullish trend. But that's not the case. But the important
thing to remember too is that this is consistent with
this part of the economic cycle where you have both

(04:00):
growth and inflation accelerating at the same time. It's just
unfortunate that we have a scenario where it appears that
money printings back in the carts, and I think that's
going to increase the importance of asset backed assets, if
you will. Gold bitcoin, I think is in that conversation now,
as some would view it as digital gold. So you know,

(04:24):
bitcoin has a hard capped code into it. There'll never
be more than twenty one million ever created. Can't say
that about any other asset. I'm sure they'll always find
more gold somewhere in the ground, probably find lots more oil, diamonds, silver,
or all that sort of stuff that one would deem

(04:45):
as precious or valuable. None of it has a finite
value or a finite amount, so you might want to
consider that or look into it, or at least think
about how the future might treat a truly scarce asset.
And I would call gold scarce, not truly scarce, but scarce.

(05:07):
So any rate, those are the major three things. Liquidity
is a big deal. Let's continue to see how that
accelerates here, along with what the Fed has to say
today when their minutes come out at one o'clock Central time.
So we'll see, all right. Thanks so much for joining me.
I hope you've had an enjoyable time with me here
in this brief discussion. And if you have any questions,

(05:28):
give me a call old style eight sixty six five
nine six ninety eight eighty six so you can shoot
me an email. Info at carefromiwealth dot com. Info at
carefromwealth dot com. Thanks so much, God bless and have
a beautiful day.