Perpetual market watch and securities trading thread

[Bezoar]

There has been an uptick in net foreign investment relative to the pre-pandemic era, I'm going to wander off and investigate what impact that might be having.

Back from my wandering, no revelations. While there has been an uptick it pales next to historical ebbs and flows. These flows being driven by flight to safety during times of elevated geopolitical tensions, notably the Korean war, Cuban missile crisis, Vietnam war, fall of the Soviet Union, various millennial tumult, and briefly Covid19. Other data series also reflect these events so little new to see.

I brought my 3mo t-bill model up to date, it has swung decidedly higher to terminal rates of over 5%. That's much higher than current consensus which has moved to 4% from 3% a month or so ago. This is in line with elevated inflation expectations.

 

[yd]

Yea, not gonna lie, I definitely see a 5 handle coming on a ten year. Once the trump taxes kick in, it will be full on inflationary.

Thinking I will maybe do a selective add to a 7% name that I like and just hold off on cash for a proper bond allocation until early next year.

 

[Bezoar]

Finished running model updates for the month, the first post-election.

10Y - still seeing a slow slide to 3¼ percent in the next 12 months

Gold - it's backing off from its ramp, likely rangebound between current levels and $3000, there are fat tails, 15% probabilities of dropping below $2000 and/or exceeding $10000

S&P - looks like 6000 may prove to be stiff resistance with substantial forays to the downside

CPI - currently shows a slow acceleration from current levels to breaching 5% around the end of 2025

3mo - likely Fed rate cut in December followed by a reversal by mid-2025

We are walking along a precipice of an evolving world order, an international flight to safety might account some of the seeming anomalies - as ugly as things may seem in the US, we may still prove to be the prettiest belle at the ball.

 

[yd]

Finished running model updates for the month, the first post-election.

10Y - still seeing a slow slide to 3¼ percent in the next 12 months

Gold - it's backing off from its ramp, likely rangebound between current levels and $3000, there are fat tails, 15% probabilities of dropping below $2000 and/or exceeding $10000

S&P - looks like 6000 may prove to be stiff resistance with substantial forays to the downside

CPI - currently shows a slow acceleration from current levels to breaching 5% around the end of 2025

3mo - likely Fed rate cut in December followed by a reversal by mid-2025

We are walking along a precipice of an evolving world order, an international flight to safety might account some of the seeming anomalies - as ugly as things may seem in the US, we may still prove to be the prettiest belle at the ball.

I hope its fairly slow, I still need to slot in some cash but don't have enough to do anything with....or hey, better still, a quick spike up to say 6% and then after I layer in a few positions, then a nice slow continual grind back down to 4% would suit me just fine.

 

[w00key]

End of year, time to optimize allocations for tax and deposit to the NL's version of IRA. We pay a wealth tax of ~6% assumed ROI x 36% tax, or 2.16% of total value of investments. Cash it out, leave it cash for 3 months and a day (anti wash trade rule) and it drops to ~1% (average short term interest) x 36%. See peildatum-arbitrage, https://www.vanlanschotkempen.com/n...ie/box-3-welke-antimisbruikregelingen-zijn-er

It's especially important for things like iShares eb.rexx® Government Germany 0-1yr UCITS ETF (DE) yielding 3.26%. When taxed at 2.16% of value, it's gg.


Shift it to a retirement account, restricted until ~67yo and it drops to zero% tax now plus deductible from income (~45%). It's go time.

And now for thing that annoys me: to fund the retirement account I was counting on pulling some excess liquidity out of IBKR, but the rule changed somewhere last year that you can't pull cash out on margin anymore. Sigh. Okay okay I'll sell the bonds and wait for it to settle, sheez. I was going to anyway.


Now I think about it more, isn't it way more tax efficient to just leave the whole account cash and buy a bunch of SPX/Y options (synthetic long) or futures to 1:1 leverage? I'll have almost no "investment" and tons of "deposits". This sounds like a super duper dumb loophole lol.


[edit] Okay I'm not the only one thinking about this, see CFD or "opties" in this topic, https://gathering.tweakers.net/forum/list_message/76614910#76614910. Oof this law. Even retail leveraged products can be used for this.

It used to be "eh whatever" at 4% x 30% = 1.2% wealth tax but since it shot up to a difference of > 1.75% it's way more tempting. And so easy to do with a proper broker account. This also bypasses the no withdrawing on margin rule, account would be super phat with EUR/USD cash and products with margin requirements, not 100% plain stock / ETF. 1.75% additional fee is a HUGE drag on saving for FIRE.

 

[abj]

The markets really didn't like what the fed had to say today.

 

[Scotttheking]

Ouchies.