Business Cycle Momentum

The ISM cycle is the closest representation of the Business cycle. We can expect economic activity to rise now that ISM is moving into positive territory. Rising activity leads to higher levels of business growth and bullish stock prices.

Market Forces are Tightening

In the near term, free market forces are responding to strong growth by tightening financial conditions. This works to slow down inflation pressure, leading to the Fed slowly loosening financial conditions to maintain economic momentum. If oil, interest rates, and the dollar continue to climb, we can expect an economic slowdown and Fed cuts this summer.

Cooling Prices

70% of the U.S. economy is services, and we see service costs falling via the ISM non-manufacturing prices index. ISM prices have a 3-month lead on CPI, which tells us CPI should make considerable progress by July. This is very bullish because it allows the Fed to begin the rate-cutting cycle in the face of stable growth and falling inflation.

Magic Code

Productivity Growth is the Magic input to Booming economies and bullish markets. Margins expand as production costs (labor and raw materials) fall and production levels rise. Productivity growth is disinflationary, leading to ideal investing conditions and explosive asset prices.

Liquidity is KING

The money cycle reached its bottom in October 2022 and has been picking up ever since. We are still in the early innings of a global monetary expansion. Risk assets are set to explode over the next 12-18 months as long as the global credit expansion turns higher. Crypto is king during this period of the credit cycle.

Purely Bullish
The Bloomberg Credit Impulse Index represents the percentage of new credit loans by the non-financial private sector in nominal GDP. The non-financial private sector includes households, NGOs, and non-financial firms.

Currently, my most bullish conviction regarding the macro cycle is Chainlink. Not financial advice!