Rate Cuts Signal We're Already in a Recession. Investors Refuse to Believe It.

Welcome to the Newsletter: Insight into Finance, Investments, and Precious Metals.

In these uncertain times, it's crucial to stay cautious and proactive in managing your wealth. Safeguarding your assets in the near future is essential.

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General Overview

• On Wednesday, the U.S. November inflation (CPI index) was published, showing a 2.7% annual rate. The belief remains that the Fed will lower the interest rate by another 25 basis points this week.
• The ECB Governing Council decided to lower all three key ECB interest rates by 25 basis points.
• Four years after the Nasdaq first surpassed 10,000 points, it has now climbed above 20,000 points. It is driven by the growth of the “Magnificent Seven” stocks, primarily due to advancements in generative artificial intelligence.
• Bitcoin has once again exceeded the $100,000 mark.
• Gold and silver prices remain extremely strong.

Will China Also Cut Interest Rates?

• China could implement the largest interest rate cuts in decades in 2025.

The reason for interest rate cuts globally lies mainly in the state of economies and labor market results. Let’s look at the U.S...

Job Openings in the U.S.

• The number of job openings is plummeting, which typically happens before recessions arrive.

Rising Bankruptcies Suggest Recession May Already Be Here

• Large bankruptcy filings in the U.S. surged in November — with 634 filings so far this year, the HIGHEST IN 14 YEARS, since the period following the financial crisis.
• In November alone, there were 69 filings, the second-highest number since the COVID crisis in 2020.

On the stock markets, no significant concerns are visible yet, at least not among retail investors...

The “Magnificent Seven” in the S&P 500

• The seven largest U.S. companies now make up 33% of the total market capitalization of the S&P 500 index, a historically high value.

Retail Investors Have Never Been So Optimistic

• Meanwhile, according to Deutsche Bank, retail investors have never been so optimistic about stock markets.

Large Investors and Corporate Executives Are Already Selling

• Corporate executives are now selling their stocks in record amounts, with the ratio of sellers to buyers reaching 6:1.

A Warning Signal: Correlation Between Gold and the S&P 500

• The last time the 2-year correlation between gold and the S&P 500 index was this high, while the stock index was so “overvalued,” was right before the 2008 crisis.

Gold as a Safe Haven

• According to ING Groep NV, rising tensions between the U.S. and China could significantly impact energy, metals, and agricultural markets next year.
• Potential tariff measures and retaliatory actions create uncertainty, while gold stands out as a safe haven.

The 53-Year Cycle Chart Predicts Gold’s Shine

• In recent years, we have seen a breakout in the price of gold.
• Where will gold’s path lead in the coming years?

Working Longer for One Ounce of Gold (31.10 g)

• We are near all-time high.

The “Cup and Handle” Pattern in Silver Remains Unfinished

• Silver is recognized as one of the best macro opportunities in the market today.
• The consolidation phase is followed by a significant breakout within one of the most widespread “cup and handle” patterns.

The 4-Year Silver Chart

• The 4-year chart indicates a “handle” scenario in development, which should follow for silver prices unless unforeseen market disruptions occur.

How Did the Solar Industry Exceed All Expectations?

• Actual solar installations are more than three times higher than 5-year forecasts.
• This confirms data that the photovoltaic industry has seen exceptional growth (289%) in silver demand over the last decade.

EU Economy

• And just when we think the EU economy couldn’t get worse… additional regulations are coming.

Best regards,

Peter

The opinions and analyses cited are educational and do not constitute financial advice. I do not endorse or recommend any investments based solely on the above information and recommend consulting a qualified financial advisor beforehand. Investors must consider their financial situation, investment goals, and risk tolerance before making any decisions. I am not responsible for any investment losses that may arise from using this information. For in-depth advice, I recommend consultation via peter.herman@valores.si