Onward and Upward Past 5,000 As Communist China Swoons and AI Destroys More Jobs

Peter's Market Rap for the Week Ending 2.9.24

Onward and Upward Past 5,000 As Communist China Swoons and AI Destroys More Jobs

Hi. Peter Navarro here with the market rap for the week ending February 9, 2024. With a bit of tongue-in-cheek, I hope the S&P 500 didn’t blow past the 5000 mark on the news that it looks like I’m going to prison.

On that note, I want to thank everybody for their support at this difficult time. The court’s decision not to release me pending the appeal of my case was a surprise to my lawyers given precedent and the substantial issues involved but not to me.

Come early next week, we will be filing an emergency appeal.  If you want to follow my case, you can go to the website for my legal defense fund www.givesendgo.com/Navarro .  But I want to make it clear here that I don’t want any of my paid subscribers to donate to the fund – you’re already doing more than enough to support my mission and I appreciate it.

The only other thing I would note about the court’s rush to prison ruling is that it ironically and comically came on the very same day that the Department of Justice announced that it would not prosecute Joe Biden for his flagrant abuses regarding the documents he took as vice president home to his garage and elsewhere.

The comically relevant passage in the DOJ report reads as follows:

“We have also considered that, at trial, Mr. Biden would likely present himself to a jury, as he did during our interview of him, as a sympathetic, well-meaning, elderly man with a poor memory. Based on our direct interactions with and observations of him, he is someone for whom many jurors will want to identify reasonable doubt. It would be difficult to convince a jury that they should convict him — by then a former president well into his eighties — of a serious felony that requires a mental state of willfulness.”

Yes, let’s remember this is the same Department of Justice that convicted me without even allowing me to present any defense, much less refer to my state of mind or memory. I do hope the American public noted the stark asymmetry between the treatment of Donald Trump and myself versus Joe Biden. No politics or dual justice system to see here.

At any rate, let’s get down to the business of the markets. What we have now is a classic technical rally where the market has blown through any remaining levels of resistance and is now free to run for a while. Trend traders are forgetting all about any fundamentals at this point and going all in for what thus far has been a profitable ride since November.

The only thing that’s going to slow this market down now in the near term is some kind of geopolitical or inflationary shock that shows up in the data. Neither can be ruled out.

You have Russia, China, Iran, North Korea, Hamas, Hezbollah, among others, plotting all manner of destruction to people and property around the world. A bear market is just a big explosion away but that is nothing new.

On the inflation front, the El Niño condition we are witnessing is now causing extreme rains and flooding in some areas and drought in others. No good can come of that in the food supply chain, and it seems like only a matter of time before consumers now squeezed by the price of their groceries may be squeezed further. But that, too, is still a ways off.

I think what I’ve learned from the last several months in the market is that it’s really a stock pickers market. The people who are really making money hand over fist are the ones who saw the artificial intelligence boom and put their bets down on that while minimizing the risk with some of the broader market.

I’m not a stock pickers forecaster – you can find other columns that do that. What I do best is look at the macroeconomy and geopolitics and handicap the market trend.

To finish up, a few things caught my eye in the news.

For starters, China seems to be going down a similar path as Japan did when it was at the height of its glory. The Japanese real estate market soared domestically decades ago, and Japanese investors ran all over the world buying trophy properties at inflated prices.

When the domestic market collapsed, the same Japanese investors had to unload at bargain basement prices a lot of the trophy properties for cash needed to prevent a total collapse – and often that didn’t work either.  Chinese investors are now doing the same thing globally.

The question everybody’s asking themselves now, at least among the investment elites, at least is whether China is going to fall into the same malaise that Japan did. If it does, it will be far more dangerous than Japan ever was as the Chinese people will do what they have done in the past, rise up and throw the rascals out. Boy, will that be bloody.

The second piece of news that hit a bit close to home for me was the skyrocketing of cocoa prices because of drought and disease ravaging crops in the top Western African producing countries. Every day, I eat a few ounces of chocolate that is about 88% pure and lacks any of the sugar or milk that turns what otherwise is an excellent food and antioxidant into diabetic candy. The bigger picture here of course that higher chocolate prices augur more inflation in the food chain.

The last piece of news, which is a follow on from one of my columns, has to do with emerging evidence about the impact of artificial intelligence on the labor market. Companies are keeping layoffs due to AI relatively secret, but some news is creeping out.

In a moment of candor, the CEO of United Parcel Service said that the largest layoffs in its 116-year history have been made possible by artificial intelligence. For example, machine learning allows salespeople to put together proposals without having to ask placing experts in guidance.

Then of course there is the evilest globalist company on the planet in BlackRock and its Never Trump CEO Larry Fink. This Black Hat announced the axing of about 600 employees because of AI. Such ripples will become waves and then tsunamis. Strap in.

Okay, that’s it for this week. Have a great weekend watching the Super Bowl. My guess is that Kansas City will win the first half and San Francisco will win the second half – and the game on the back of Christian McCaffrey. Bon chance.