Phil Streible of Blue Line Futures highlights a market rally driven by optimism despite recent CPI volatility, suggesting interest rate cuts, a strong economy, and opportunities in bonds and gold amid fluctuations in commodities like natural gas.
Transcript:
I mean, that CPl number yesterday, it just represented a small derailment of the current rally that we are going on right now. I mean, it is going to push forward those interest rate cut expectations. But the reality Is, is that interest rates aren’t going back up to all-time highs. The Fed is not going to hike rates. It’s just going to take a little bit longer.
We got really good earnings. We got a good economy. We’ve got good employment. I think it’s risk down right now. And the reflection is they’re thinking about where it can go then. I mean, what will be required to get us back into the bond rally mode? I mean, the stock rally mode is there. What about bonds?
How important is it to keep yields from going higher?
I mean, you look at the yields. I mean, It’s just we had a little bit of volatile data. I mean, we had, you know, things that are very volatile. We have like housing. shelter, medical supplies, insurance, things like that. Those components of the CPl were what caused the volatility in here. Now, when you go a couple of months out, those things will start to simmer down and that’s where you get a reset on interest rates.
They start coming back down again to your two-year yields, down about 148%, six basis points right now. I think that’s where you start to get the bonds going. back up. Gold starts to go up with it. So I look at these as long-term opportunities in some of those asset classes. Okay. So maybe a little dip buying and bonds from the last couple of weeks.
Bonds and gold, I think sell Okay. All right. So the dips are fairly limited. One other category that does have some pretty steep declines, though, since were kind of in that group. Let’s talk the commodities, Crude’s firming up, but now gas is like disappearing before our eyes. Most other commodities are, too. What do you make of this? Yeah, we were kind of joking around because, like, natural gas is like an invisible thing, right? But we’ve got real uses for it where Bitcoin is this other invisible thing that we don’t know what those uses are. So it’s a tale of two extremes. You look at Bitcoin year to date up 22%, whereas natural gas year to date down 24%. The one year Bitcoin up 113%, natural gas one year down 55% So it started off as a joke in the office.
Hey, can natural gas go negative just like crude oil futures could? And it was it’s the reality that there was no place to store that crude oil That’s why it went negative So ff you wanted to sell it, you had to pay someone else to store it. So fundamentally, on the natural gas side, we’ve got a mild winter. The concerns about, you know, supply have evaporated. The current inventories are 78% above the one-year average, 10.65 above the five-year average So if you’re a producer, you need to hedge that for production. Now, here’s where things get a little bit interesting If you Google negative natural gas prices, it’s already happened in 2020 And in 2022, West Texas, natural gas prices went to $2.
So producers had to take some supply out their hands. And where the negative play comes in is that the regulators limit the amount of natural gas that producers can burn. It’s known as flaring because it releases carbon dioxide. And guess what’s getting canceled this year? Liquid natural gas. The environmentalists are after the Biden administration and they’ve got to get this environment buttoned down to secure those votes.
So natural gas stockpiles are going to continue to build higher. Interesting. So it seems like you think this thing might be literally heading to zero or one Yeah, it’s a joke. You had the options, guy. I just thought, Rick a second ago, I mean, l’m surprised he’s not talking about maybe puts in natural gas. They cost 200 bucks. I mean, you know, you get two of them, you double your money on one, sell one You got a free lotto ticket, not a recommendation. I’m just throwing it out there as a fact. And one of the biggest reversals of sentiment over like a two-year period, possibly ever. And Natural Gas, when there was panic in late 20 to early 23 that, like Europe, wouldn’t even be able to heal itself. Natural gas was going to be so scarce. I mean, what a fade. That was Incredible stuff. All right. So at least a week, it’s cold. Were prepped. We can heat our homes for cheap. Seems like the only thing that could save nanny gas right now is like a day after tomorrow. Winter storm. Give me Bitcoin thoughts as were ramping up here.
How high can we go? I’ll give it to you. BlackRock, the Bitcoin ETF, they have over 100,000 bitcoin under management. Investors keep accumulating the spot.
Bitcoin ETF daily inflows broke another record 631 million and it’s onty been trading for 22 days now. Here’s where things get interesting. Rewind back to November 18, 2004. GLD was launched the gold ETF.
It surpassed 51 billion in assets within three trading days. We went from $40 or I’m sorry, $400 on gold to 1900 dollars in a decade. Who knows? Bitcoin might hit $100,000 this year and $1,000,000 in a decade just thrown it out there. All right. Well, you’re not the first.
So we’ve heard the i think you can find about any price level prediction for Bitcoin out there. So you’re not alone. You got to get to 53,054, then 55. Just keep rolling those price predictions. I love it. All right. Thanks, Phil. Appreciate the thoughts. As the chief markets, jobs, blue and futures get eyes on an out-of-gas trade two. Pretty amazing. I think it’s just now total free fall All right. Speaking of free falls, upstart.