Managing Editor’s Note: Our colleague Jeff Brown is about to reveal what he’s calling his “most urgent prediction of 2024.” If you’re familiar with Jeff’s work, you know he’s been passionate about AI for years.
Jeff recommended Nvidia to his subscribers back in 2016… before it surged more than 20,000%. And he recommended AMD in 2017 before it became the #1 stock on the S&P 500 in 2018 & 2019.
So his new prediction might come as a shock…
He believes a crash will send many AI titans spiraling 50% or more… as soon as November 30.
That’s why he’s holding a briefing about this coming crash tomorrow at 8 p.m. ET to fill you in on all the details… including how you can turn the crash into big wins.
To add your name to his guest list with one click, simply go right here.
The Federal Reserve has one of the toughest jobs around.
And things are about to get a whole lot harder for Chair Jerome Powell…
President-elect Trump is already starting to pile the pressure on. Powell is convinced his position in the top job remains legally secure, but Trump may test that.
And Powell is already dealing with a whole bunch of other issues tied to the Fed’s interest rate decisions.
Inflation remains sticky. “Core” inflation excludes energy and food, which can be volatile. It showed a 0.3% month-over-month rise last week. That was the third 0.3% monthly reading in a row.
The year-over-year figure came in at 3.3%. That’s well above the Fed’s 2% target.
Put simply, inflation has stopped going down.
And Trump’s proposed tariffs and other policies promise to fuel inflationary forces.
So the Fed is trying to walk the line between inflation and a healthy labor market.
But the current dynamics will make it hard for the Fed to get too far into its rate-cutting cycle…
So as traders, we need to stay on top of how these forces will affect our trading…
The Fed’s Dilemma
The Fed might need to cut rates if the jobs slowdown continues.
There were just 12,000 nonfarm payrolls (NFP) added in October. That was the lowest reading since December 2020. (NFP is an employment report that tallies jobs outside the farming industry.) Meanwhile, job openings continue to slide.
That has the Fed in a dilemma…
How is it going to find the interest rate path that keeps the job market steady AND holds inflation in check?
The Fed thought it had pulled off its soft landing. Yet things are going to get much tougher from here.
And the market is starting to process that fact…
Stocks gapped higher after Trump’s win and then rallied further off the back of the Fed’s 0.25% rate cut that followed. The major indexes reached fresh all-time highs.
But that rally stalled last week. A big chunk of those gains have evaporated.
Even the economic barometer stock that we discussed a couple of weeks ago, Caterpillar (CAT), had gapped higher with the rest of the market. But it has given up all of its post-election gains.
It’s all adding up to uncertainty ahead.
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Embrace Uncertainty
Rather than fear uncertainty, traders need to embrace it. Volatility throws up a lot more trading opportunities than regular markets.
And if you can put volatility to work in your corner, it’s a great way to spruce up your returns.
The key is to wait for the right trade setups and always know your risks.
That’s why I trade options. I can enter a position for a fraction of trading the shares outright. Plus, I always know the maximum I can lose.
And critically, I can profit whether the market moves up, down, or sideways.
Trump’s election win set off a wave of euphoria. But now the market is trying to work out what the real impact will be long-term.
But to me, that uncertainty’s a good thing.
Because when volatility is on the rise, that’s when real traders get to work.
If you’d like to join me as we find the best ways to profit, you can learn all the details of how to get started with options right here – plus a special offer for newcomers.
Regards,
Larry Benedict
Editor, Trading With Larry Benedict