Markets rally as the TPP strategies position for a SELL OFF....

Most stock markets rose Wednesday, although the FTSE 100 was struggling even after Hunt’s claim that the British economy is ‘back on track’.

The US, German and French markets all posted gains of around 0.4%. Yields briefly fell to their lowest level in two months, and the November market rally broadened into the Thanksgiving holiday.

The Dow Jones Industrial Average gained 95 points, or 0.3%. The S&P 500 climbed 0.4%, and the Nasdaq Composite advanced 0.6%.

More than three-fifths, or 64%, of the stocks trading on the New York Stock Exchange were up Wednesday, indicating widening breadth for the market rally. The tech-heavy Nasdaq also saw greater participation, with 56% of the Nasdaq stocks rising.

Areas such as consumer staples and small- and mid-caps, which are 2023 laggards, rose 0.6% and outperformed the broad market.

Meanwhile, the energy sector lost 1.5% after OPEC delayed a meeting on production cuts originally scheduled for the weekend. APA Corp fell 3.5%, while Marathon Oil, EOG Resources and Devon Energy fell more than 2%, as did Shell and BP in the UK.

We wouldn’t expect the drop in oil to continue much more as OPEC won’t like it, and essentially they can and will, do whatever they want to keep prices stable (and slightly elevated).

The yield on the 10-year Treasury briefly fell to 4.369% Wednesday morning, the lowest level since Sep. 22. It later recovered and was last trading 1 basis point higher at 4.429% at the time of writing.

On Tuesday, the Federal Reserve signalled in its latest meeting notes that monetary policy will remain restrictive, and gave no indication of cutting interest rates anytime soon.

Investors, however, continue to remain optimistic that the central bank will not raise rates at its December meeting, according to Fed funds futures trading.

The markets are convinced that central banks are done with raising rates. Rate cuts should now occur next year, although they will no doubt be slow and steady. They will also remain high compared to the previous 15 years, during which they were simply too low.

Chipmaker Nvidia reported its latest quarterly results Tuesday after the bell. The company posted fiscal third-quarter adjusted earnings and revenue that beat expectations but warned export restrictions on China would weigh on its fiscal fourth quarter. Shares fell 4.2% on Wednesday.

The lacklustre response to the quarterly beat suggests to some investors Nvidia’s stock may be overvalued after its more than 200% rise this year. This week, Nvidia shares crossed the $500 threshold for the first time to an all-time high.

The S&P 500 and Nasdaq Composite ended a five-day winning streak on Tuesday, as the blistering November rally took a pause. The Dow also closed slightly lower.

However, the US major averages are all still on pace for monthly gains.

Now over to the Autumn statement in the UK.

Chancellor Jeremy Hunt has cut national insurance by 2 percentage points and made business investment tax relief permanent, as he put a £20bn tax giveaway at the heart of his Autumn Statement.

Hunt claimed the British economy was “back on track” and that his package of tax cuts would boost growth without imperilling the fight against inflation. His package left space for further pre-election tax cuts in next spring’s Budget, but was dwarfed by the impact of the government’s decision to freeze tax thresholds at a time when inflation is still more than twice the Bank of England’s 2 per cent target.

“While personal and business tax cuts reduce the tax burden by half a percentage point, it still rises in each of the next five years to a postwar high of 38 per cent of gross domestic product,” said the independent Office for Budget Responsibility. In a highly political statement, Hunt said he would cut the main rate of national insurance by 2 points to 10 per cent from January 6 — the start of what is expected to be an election year — with a cost of about £9bn.

The other big measure saw Hunt make permanent the “full expensing” capital allowance regime, at a cost rising to £11bn. He said it would give Britain “one of the most generous tax reliefs anywhere in the world”.

He also announced plans to sell the government’s entire holding in NatWest, the high street bank, by 2025-26 subject to market conditions.

Quite why he thinks this is a popular move given that telling everyone will suppress the value of the shares. We saw it with Gordon Brown selling half the UK’s gold reserves in 1999 (Brown’s bottom), and Kwasi Kwarteng announcing that the treasury would need to sell £45bn in gilts to pay for the mini-budget.

Hunt claimed that, with inflation falling to 4.6 per cent and with the OBR showing that debt was on a sustainable path, it was time to take the foot off the fiscal brake. “Our plan for the British economy is working but the work is not done,” he said, as he set out 110 supply-side measures, intended to boost business, bring the sick back to work, and get more capital flowing into the economy.

In his defence, the economic numbers do all point to a near miss with regard to a recession.

Inflation needs to continue its path; the October month-over-month figure came in a 0% as did the US and Germany. This really is the sign that we’ve been waiting for, although any indication that this isn’t continuing, will be met with a sharp drop in equity valuations.

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Closing Comments:

It's been a challenging couple of weeks for our more 'active strategies' on TPP.

Over the last 8-9 trading days- a SHORT SELL BIAS has been built.

Timing a short sell trade is always a challenge, but it's one we get right often.

The reason why it's hard, is because traditionally markets increase in value. You're swimming against the tide. However, when you do get it right- it's very satisfying making money as wealth managers globally post negative returns.

It will be interesting to see where markets move from here.

Our Co-founder Lane Clark released a video this week titled 'a crucial week for equities'. Watch it here.

Regardless of which direction the economy (or markets) moves from here, TPP will aim to take advantage.

We hope that by building products like TPP that investors will see there are investment solutions out there that can perform regardless of the investment climate.

Why merely track a market, when opportunities can be taken advantage of in the short and mid term?

Adding small short SELL positions as the markets fall is one of many ways our strategies make modifications to consistently beat the markets.

If you're frustrated with what many believe is a stale and outdated wealth management model- then consider arranging a call with our team.

We are also of the opinion that the industry needs revamped, and that wealth and asset managers have no excuses for failing to beat their benchmarks most years.

Investors want more than 4, 5, or 6% per annum, without taking on excessive risk.

Investors are frustrated with the poor performance and excessive fees.

Ladies/Gents  - this is the very reason why we built TPP.

TPP has been built for frustrated investors globally. It's time to empower yourself, and start to beat your benchmark. At TPP we offer a multitude of different strategies and trading techniques- they all have one thing in common. They are all designed to beat their market benchmark. Their track records suggest they will do exactly that.  It's time for change. No more exposure to underperforming funds, and their inflated fees.

TPP has been built to disrupt the market place and offer investors the solution they've been craving. Welcome to the future of investing. 😀