Market Outlook for Dec 22 2024 A Look at US Housing

[@tjloehnert]

Haven't heard you comment on ABR or AGNC in a while. Would love to hear your thoughts on current price levels in the Market Outlook or in your Positions videos

[@LDacic]

Happy Holidays, Mark & the Community!

[@matteotardivo7010]

Hello sir, 1 question. With that good reading for pce, why TLT or bonds dont run so much? Bonds market had so much negative news in last 2 years, when this will finish? What are the biggest red flag? Thanks

[@edwardparker768]

Hey Mark, I’d really like to hear the Bitcoin mining video that’s for your applied level. I went to your site to sign up but I’m confused on what exactly I’d be signing up for. I don’t have any financial background, and I’m not trying to take any exams. I just want to follow your bitcoin/crypto insights. Is there a way to get access the to bitcoin mining content without paying thousands for what appears to be a tutoring course?

[@chrislian9239]

Just pay for the sector study. But if you are only here for the bitcoin video, it could be an overkill.

[@MarkMeldrum]

To be clear, there will be much more on cryptocurrency and blockchain. Bitcoin mining is just the beginning.

[@Slayer17606]

Hi Mark, happy holidays! Quick question why do you think 2% real yield is restrictive, I mean what benchmark would you compare it with. Allso inflation target I believe is set by the FED at 2% so if the next PCE comes in at annualized 2% or around wouldnt that mean fed would not lower rates everything else being equal (I may be wrong on the inflation target by FED or the benchmark inflation to compare the inflation with pls correct me if I am wrong)

[@frankguo3148]

Hi Mark - first of all, happy holidays! Thank you so much for another year of sharing your insightful analysis with this community. As we step into 2025, I would like to suggest something for your consideration: reintroducing the corporate OAS credit spreads for investment-grade versus high-yield bonds. Reflecting on the start of 2024, the market anticipated that spreads would widen due to corporate loan rollovers in a highly restrictive monetary policy environment. However, this expectation did not materialize (or hasn’t yet). With the yield curve now steepening and the 10-year Treasury exceeding 4.5%, it could be insightful to revisit corporate spreads. A monthly update on this, rather than a weekly one, would be sufficient from January onward.

[@tykepope]

Good idea

[@LorenzoGarcía-Tornel]

Hello Dr Meldrum. Thanks again for all the great content that you keep sharing with us. On the positions video of last week you mentioned that you exited FCX, would you be able to tell us more about this movement on your positions video of this week? I am curious if you still see copper as good thesis. Maybe you have decided to focus solely on the miner ETF. Thank you and have a great holiday.

[@Slayer17606]

Hi Mark, how do you consider how much premium should be good enough for you to enter or sell an option. Also You mentioned the premiums on TLT , how should be measure if the risk im taking is worth the premium or its subjective

[@jamax2155]

Hi Mr. Mark, If oil price stays low, shouldn't oil refinery companies benefit from it? All Oil refiners stock are down and around good valuation in my point of view. Small Cap stock in that sector are down over 60 to 70% Like PARR, PBF, DINO etc.. In 2016 when Oil price was going down oil refiner stock did really good during that time, why this time it keep going down? What is your opinion on Oil refiner stock? Thank you

[@jerrodestell5040]

My payment was processed now for the Applied Level Lifetime Bundle. What a deal Mark. Thanks

[@libero5684]

Thanks Mark. A bit of a silly question: would it be ridiculous to also consider that if undocumented immigrants are indeed deported, while their labor is lost, perhaps some existing housing does free up? While shared homes with documented immigrants is a likely scenario for many undocumented immigrants (meaning not a 1 to 1 supply of housing to undocumented immigrant deported will free up) is this still an effect that could slightly counteract things in terms of putting homebuilders under slightly more pressure as they face the potentially slightly higher costs from contractors (I know lenar said they don’t expect. but surely some slight difficulties even just in delayed timelines potentially) while also seeing more existing supply fill in gaps? I guess this supply freeing up would more likely be renters.. but I wonder if there’s something here that results in the urgency of home buyers to stay low/lower than expected. Even just more rentable supply bringing rents down could push potential first time buyers to delay, especially if mortgage rates stay high (although I am operating on a base case that 10y and up will see yields fall early 2025 and so will mortgage rates as a result). Either way, I think it’s shaping up that this undocumented deportations will be a nothingburger. Probs what lenar thinks too I’m guessing. Hawkish talk, but implementations will be on flows into country and violent/criminal undocumented immigrants rather than too much on nonviolent/civil undocumented immigrants. Thanks as always for your insights, time, and attention Mark!

[@financewithsamson]

Do you feel that it makes sense to care about traditional valuation metrics such as DCF valuation, and PE multiple, when analyzing companies such as Tesla and Palantir which clearly ignore valuation.

[@mduggy1396]

Great question hope Mark can answer. On my take you can absolutely execute a DCF, and assuming your model is sophisticated in terms of providing sensitivity’s + sum of the parts to derive ULFCF before discounting (also just assume mid year for cash flows) you’ll probably arrive at a valuation that is far less than current market price for Tesla even on an optimistic side. It’s almost a speculative equity IMO

[@Patrick-z8j]

Hi Mark, any thought on the neutral rate debate? Do you think if it is possible to have a 4% in the long run as the new regime as many talked on Bloomberg. If that is the case, does that mean the 10 year will stay at high 4 or even 5s?

[@MrDeadlyCrow]

What soft you use for screen recording and writing?

[@rs72416]

Hi Mark, the Fed cut the target rate by 25bps but cut the RRP rate by 30bps to 4.25%. It's now in line with the lower bound of the fed funds rate. Thoughts on why the Fed made the extra 5bps adjustment for the RRP? Does the Fed want the RRP to hit zero? If so, why?

[@abdecerrone6609]

Hi Dr Meldrum , as I'm following Lennar this year : I'm curious about the recent CBO reports that suggests a privatization of Fannie Mae. Could it affect the dynamics of supply and demand of the U.S housing market, the supply could be greater than before with foreign investors bringing capital to support the drop of interest rates and reinforce mortgage applications ?

[@publius7928]

Mark, really looking forward to the 2025 theme video. Wondering if you’re going to dabble in any new year poetry for us! Happy Holidays

[@jamest-q8d]

Hi Mark, I was wanting to know if you had any thoughts on Novo Nordisk after its slightly disappointing trial release? Do you see long term value in the US healthcare space more broadly? Thanks

[@Mray760]

Hi Mark, a few questions: 1. Seems forward P/E have been persistently above it's LT equilibrium of around 16. Do you think there's been a regime shift where we will continue to see higher forward P/Es going forward? 2. What are your thoughts on the recent strengthening of the US Dollar? How can this impact global liquidity going into 2025 given foreign US dollar denominated debt is at all time highs?

[@tjloehnert]

Do you think any rebalancing by fund managers after the start of 2025 will bring long-term capital market yields down and push the price of TLT up?

[@Mray760]

Portfolio managers are not going to extend duration. They may position themselves in the mid part of the curve

[@tjloehnert]

@@Mray760 if the terms of the prospectus allows for that. Some funds may be required to rebalance to the longer end of the curve. But I could be wrong

[@Patrick-z8j]

@@tjloehnertthey have to rebalance unless their duration strategy substantially changes

[@varunsharma534]

Hi Mark, sorry you may have covered this previously but would you please clarify if the Analysis & Asset Management split impacts previous subscribers of the applied series? I am a subscriber of the Applied Series Bundle since 2022, will I have to pay extra to get both modules post Jan 15?

[@MarkMeldrum]

Does not impact previous subs.

[@andreagiudici9006]

Suppose I subscribe before January 15th to the sector studies module. Will I have access to further updates (including the financial modelling, which if I understand correctly is under that module)? Many thanks and happy x'mas to the community

[@MarkMeldrum]

Yes, you will have access to any new content for that module. Positions is not part of Sector Studies however.

[@Raventerp01]

Regarding TLT, is there a price point it could get down to where you go all in, materially altering your net worth in regards to TLT/equity allocations? Like taking a final stand?

[@WyattBlackstock]

Is there a difference between a long term neutral rate and a short term neutral rate that we need to be aware of? If we think LT rGDP growth will be 2% and LT target inflation is 2%, wouldn't that make the LT neutral rate 4%? Such that the current EFFR (4.33%) is only 33bps restrictive? If you could provide more color to this that would be helpful. Also, I am curious why you no longer show breakevens?

[@sauzo638]

Thanks Mark, any thoughts / comments on Lennar spinning off its land holdings? Should increase ROE and gross margins

[@62294838]

Hi. I know it is not very related to Outlook but see whether you can do a AS video for Top Down on fiscal policy/deficit and how it affects market in general given that if you think there’s parts within CFA curriculums don’t cover enough. (doesn’t have to be based on a trade strategy; like the video on Job report, PCE etc it is for general understanding to provide a more wholistic view)

[@klausschmidt8147]

Hey Mark, just making sure I understand the changes to the applied level correctly: Does this mean that by buying the applied level for 440 usd before jan 15 I get access to your regular "positions" uploads in the future? Besides, thank you for the great finance content - you are exceptional at explaining concepts in a very straightforward way!

[@MarkMeldrum]

That is correct.

[@licinkazd]

Hi! You have been advocating for copper since I started following you couple of years ago. Do you think the copper story faded since you got rid of your FCX position, or you just expect some short term weakness and hope for a better entry point?

[@MarkMeldrum]

1-2 quarters at least.

[@staenzyboi]

Why is the yield on a 20-year Treasury bond higher than that on a 30-year bond? Could it be due to liquidity, demand, or other factors?

[@mathieubelanger157]

Hi Mark, thoughts on Office REIT's? I am hearing from CRE executive of private RE firms in Canada that are getting bullish on office (they are biased, it is their job). Lower rates could decrease cap rate. My opinion is that when/if the recession hits, it will be the catalyst to have firms push office mandates more aggressively (4-5 days a week). However, recessions would hit net rental growth and could lower demand. It feels like a contrarian play in the next few months. I guess my question is- what is your view on them and how would you approach the thinking on this?

[@TerryBusiness]

Not sure the appropriate venue to pose questions to Dr. Mark but I was wondering if he could comment on “The Creature from Jekyll Island” by G.Edward Griffin. If you do choose the to respond to this question please reply to the comment with what episode you make the response so I can be sure to catch it. Thank you in advance for your time. 🙏🏻

[@jarby2626]

For your last outlook of 2025 please do an All-In style superlative video, some ideas: - biggest investment surprise - biggest winner/loser - unexpected theme Etc

[@Anarchistarchitect]

You make great content. I like how you explain things. Even though I think btc is an alright asset I like how you destroyed mstr, because I think btc is alright doesnt mean scammers don't use it. Keep it up.

[@MrDeadlyCrow]

The US is poised for another debt ceiling fight in 2025 as a temporary suspension ends on Jan. 1, forcing lawmakers to once again confront the possibility of default. House Speaker Mike Johnson’s approach of pairing any debt limit increase with major cuts to programs like Medicare or Social Security-supported by Trump-sets the stage for a contentious battle. The Treasury’s use of “extraordinary measures” might buy only a few additional months before a default threat escalates, potentially spooking investors and affecting borrowing costs. How might the Trump administration’s promised spending cuts, combined with a renewed debt limit battle, influence government bond yields and broader market stability in 2025?

[@040210040210]

how can i access the new positions video?

[@hailstone_]

Hey thanks for keeping me out of the Yen the other day, it went down since then. I will continue to monitor it.

[@prashantsingh3664]

Nothing changes for the old applied level subscribers , right? ... They will have access to both analysis and asset management and they dont have to pay anything extra right ?

[@MarkMeldrum]

Correct

[@TerryBusiness]

A second request I had I was hoping you could address in someway was respond to “The Great Taking” by David Rodgers Webb. Again, if you do respond please let me know so I can see your response 🙏🏻

[@romiljain2092]

Lseg is pronounced L-SEG

[@MrDeadlyCrow]

First! 🎉

[@jonathanc5848]

Hi Mark, there’s a certain subset of people who believe that government should run efficiently, almost like a company (you’ve actually said this yourself in the past). But a government entire purpose is to serve the people. It’s a service, not a profit making venture. And the people who think that it should run profitably are usually the wealth cohort who are unhappy with their tax rate. Can you recognize this bias?

[@HectorYague]

The best way a governament has to serve its people is to... 1) not burden future generations with excessive debt. 2) minimize deficits so taxes on citizens' hard earned money dont need to raise. 3) reduce the govt's overregulation and overreach into the citizens' private matters. In short: the best way a govt can serve its people is to be as little intrusive as possible, and to let people do what people do best: live, grow, innovate, expand.

[@jonathanc5848]

@ the “best” ways according to your own subjective priorities. Regulations are there to protect the public from companies taking advantage of them. I’ve seen countless times where people like you talk so idealisticly about less regulation and then cries for more oversight when a company doesn’t have their best interest in mind.

[@HectorYague]

@@jonathanc5848 well, in that case you therefore must believe that an uneducated beaurocrat who has never worked in the real private world is better equipped to manage your hard earned cash than you, and furthermore he has better intentions for the use of that cash than you... I, on the other hand, prefer the private sector (and its citizens) to manage themselves whatever money they have earned with their sweat in whatever way they see fit (not someone else's political agenda). I guess you must be a more optimistic man than me...

[@Patrick-z8j]

Hi Mark, any thought on the neutral rate debate? Do you think if it is possible to have a 4% in the long run as the new regime as many talked on Bloomberg. If that is the case, does that mean the 10 year will stay at high 4 or even 5s?