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Briefing Notes From “Navigator 7 Report.pdf” and “Navigator Report 8.pdf”

March 2, 2025

Created by NYUGrad. Available at his notyouradvisor.com site: https://www.notyouradvisor.com/p/bill-cara-global-market-navigator-521

Overview: These excerpts from “Navigator 7 Report.pdf” and “Navigator Report 8.pdf” present a broad overview of global financial markets, covering currencies, government bonds, stock indices, and individual company performance across various sectors and countries. They also highlight specific geopolitical and economic developments impacting these markets. The reports adopt a technical analysis approach alongside fundamental overviews of different sectors and geographies.

Key Themes and Ideas:

  1. Currency Markets:
  • The reports provide extensive lists of currency pairs, including those with “NBD” (likely indicating a New Bid Day) and “EOD” (End of Day) pricing. Examples include:
  • British Pound to New Zealand Dollar (NBD) $GBPNZD GBP/NZD
  • US Dollar to Japanese Yen (EOD) $USDJPY USD/JPY
  • A specific note is made about the Yen: “$JPYUSD The Yen to the US Dollar strengthened around January 10-13. It is still strong.”
  1. Government Bonds and Yields:
  • The performance of government bonds and yields is a central focus, particularly on US Treasuries, German Bunds, Japanese Government Bonds (JGBs), and UK Gilts.
  • The reports track changes in yields, like the 1-month US Treasury yield increasing modestly: “▪ 1 Month: +0.10 (a modest 10 bps increase, adjusting from -15.00, as yields climbed since late January).”
  • Significant moves in Japanese Treasury yields are noted: “The 10-year Japanese Treasury has soared +5.2% this week, +17.2% over 1 month, and +30.4% YTD. These are spectacular moves.”
  • A drop in the 10-year US Treasury is noted. “The decline in the 10-year US Treasury has been -1.1% this week and -4.6% YTD.”
  • The 10-year US Treasury Yield is also dropping due to risk-off market conditions.
  1. Stock Market Analysis (US Dow Indexes):
  • Emphasis is placed on the Dow Theory, using the Dow Jones Industrial Average (DJIA), Dow Jones Transportation Average (DJTA), and Dow Jones Utilities Average (DJUA) as benchmarks.
  • The reports underscore the fundamental basis of the Dow Theory: “Dow Theory has a legitimate foundation – the US economy- unlike cryptocurrency.”
  • The reports examine technical indicators. “Dow Jones Industrials Average in black vs $NYA. The Technical indicators are RSI-7 and MACD.”
  • Components of the DJIA are listed, with links to Value Line Studies.
  • AAPL – Apple, Inc. AMGN – Amgen, Inc. AMZN – Amazon.com…
  1. Technical Analysis & Trading Signals:
  • The reports employ technical indicators such as RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) to generate trading signals.
  • A scoring system is used to provide overall ratings:
  • “Buy signal: +1. Sell signal: -1. Neutral signal: 0.”
  • “Strong Buy: 0.5 to 1.0. Buy: 0.1 to 0.5. Neutral: -0.1 to 0.1. Sell: -0.5 to -0.1. Strong Sell: -1.0 to -0.5.”
  • RSI signals potential selling at >70 (Overbought) and potential buying at <30 (Oversold).
  1. Gold and Silver Miners:
  • The reports track performance of gold and silver mining stocks and related ETFs.
  • Examples of ETFs include the GDX VanEck Vectors Gold Miners ETF, the GDXJ VanEck Vectors Junior Gold Miners ETF, and the SIL Global X Silver Miners ETF.
  • Specific mining companies, such as Agnico Eagle Mines, First Majestic Silver, B2Gold, and others, are monitored.
  1. Industrial Sector Analysis:
  • The industrial sector is analyzed, with a watchlist of stocks and their performance.
  • Industry bellwethers such as Waste Management, Quanta Services, Delta Air Lines, and Caterpillar are identified.
  1. International Stock Markets:
  • The reports cover international stock markets, including Europe (France, Germany, Italy, Spain, Netherlands, Nordic countries, Switzerland, UK), Asia (India, Japan, Singapore, Hong Kong, China), and South America.
  • Lists of companies trading on domestic exchanges and in the US (via ADRs) for various countries are provided.
  • Examples: Toyota 7203.T TM, SAP SAP SAP.DE SAP, Novo Nordisk A/S NOVO-B.CO.
  • ETFs for various countries and regions are also listed.
  1. Geopolitical and Economic Drivers:
  • The reports acknowledge the impact of geopolitical events on the markets. Examples include:
  • Trump’s tariffs on Canada, Mexico, and China and the potential market reactions: “Trump’s Tariff Shock: Trump’s reaffirmation of 25% tariffs on Canada/Mexico (effective March 4) and 20% on China (February 28 announcement) sparked a global sell-off Thursday (SmartNews).”
  • Monitoring OPEC+ talks and Iran-Israel tensions affecting oil prices.
  • India’s economic growth and IPO market are highlighted. “NSDL’s ₹3,000 crore ($360 million) IPO filing capped a record week for Indian markets, with banking stocks (SBI, HDFC) in focus.”
  1. Investing in Specific Countries:
  • Dedicated sections are devoted to investing in various countries.

Key Facts and Data Points:

  • US Treasury Yields: 1-Month US Treasury Yield increased by 0.10bps.
  • Japanese Treasury Yields: 10-year Japanese Treasury yield soared +5.2% this week, +17.2% over 1 month, and +30.4% YTD.
  • Dow Jones Components: Lists of DJIA, DJTA, and DJUA components are provided.
  • Sector-Specific Stocks: Watchlists of stocks in the gold mining, industrial, and consumer discretionary sectors.
  • International Company Listings: This section includes extensive listings of companies trading on exchanges in various countries and their US ticker symbols (ADRs) where available.
  • Currency Pair Listings: Lists of currency pairs and their symbols.

Actionable Insights (Based on Excerpts):

  • Monitor US Treasury Yields: Pay close attention to the direction of US Treasury yields as an indicator of risk sentiment.
  • Track Dow Theory Components: Analyze the performance of the DJIA, DJTA, and DJUA for insights into the health of the US economy.
  • Consider International Diversification: Explore investment opportunities in international markets, particularly those with strong growth potential (e.g., India) or attractive valuations.
  • Be Aware of Geopolitical Risks: Stay informed about geopolitical events that could impact markets, such as trade disputes and tensions in the Middle East.
  • Utilize Technical Analysis: Employ technical indicators like RSI and MACD to identify potential trading opportunities.

These reports offer a comprehensive overview of global financial markets, combining technical analysis with fundamental insights into various sectors and regions. The emphasis on government bond yields, stock indices, and individual company performance provides a valuable framework for investment decision-making. The reports also highlight the importance of monitoring geopolitical and economic developments that could impact markets.

Study Guide

I. Short Answer Quiz

  1. What is the significance of the Dow Jones Transportation Average (DJTA) in assessing the US economy?
  2. Explain how the Relative Strength Index (RSI) is used to identify potential buying and selling opportunities.
  3. Describe the “Dow Theory” and its foundation.
  4. How can investors use the information provided about government bond yields to understand market risk sentiment?
  5. What is an ADR, and why is it relevant for international stock investments?
  6. What is the relationship between intra-market analysis and decision-making support?
  7. Explain the difference between a buy signal and a sell signal using the scoring system provided.
  8. Name at least three components of the Dow Jones Industrial Average (DJIA).
  9. What is the Eurodollar Index ($XED), and where can it be found?
  10. What are the implications of Trump’s tariffs on the global economy?

II. Short Answer Quiz – Answer Key

  1. The DJTA consists of 20 prominent US transport companies and is used to assess the condition of the US economy because goods producers must deliver goods to consumers. The index is also used to measure the performance of other transportation industry companies.
  2. RSI measures price momentum; an overbought signal (>70) suggests a potential sell, while an oversold signal (<30) suggests a potential buy. These signals help investors identify possible trend reversals.
  3. The Dow Theory is based on the premise that the US economy is driven by its industry, commerce, and finance. It uses the Dow Jones Industrial Average, Dow Jones Transportation Average, and Dow Jones Utility Average as leading benchmarks.
  4. Rising bond yields often indicate increasing confidence in the economy, leading investors to sell bonds. Conversely, falling yields can signal risk aversion, with investors seeking the safety of government bonds.
  5. An ADR (American Depositary Receipt) represents shares of a foreign company trading on U.S. stock exchanges, simplifying international investment for U.S. investors. Tracking ADRs is important for arbitrage purposes.
  6. Intra-market analysis is a powerful research and decision-support tool that assists investors in evaluating various market sectors for trends and reversals.
  7. A buy signal has a value of +1, meaning the stock has upside momentum; a sell signal has a value of -1, meaning the stock has downside momentum.
  8. AAPL (Apple, Inc.), AMZN (Amazon.com), and MSFT (Microsoft Corp.) are three components of the Dow Jones Industrial Average (DJIA).
  9. The Eurodollar Index ($XED) (Discontinued) measured Eurodollars (U.S. dollars held in banks outside the United States) and is listed alongside other currency pairs.
  10. Trump’s tariffs could spark a global sell-off. Reactions from trade partners like Canada’s counter-tariff hints and China’s February response could influence equities and commodities.

III. Essay Questions

  1. Discuss the role of government bond yields as indicators of economic sentiment and potential investment strategies.
  2. Analyze the significance of the Dow Theory in modern economic analysis and investment decision-making, considering its historical context and current relevance.
  3. Compare and contrast the investment landscapes of two countries listed in the report (e.g., Japan and India), focusing on key industries, market trends, and potential risks.
  4. Evaluate the factors that influence the performance of gold miner stocks, including economic indicators, geopolitical events, and technical analysis.
  5. Explain how technical indicators like RSI and MACD can be used to identify potential trading opportunities in the stock market, providing examples of specific stocks or ETFs mentioned in the report.

IV. Glossary of Key Terms

  • ADR (American Depositary Receipt): A certificate representing shares of a foreign stock trading on U.S. exchanges.
  • Basis Points (bps): A unit equal to 1/100th of 1%, used to denote changes in interest rates and other percentages in finance.
  • Bond Yield: The return an investor receives on a bond, expressed as a percentage.
  • DJIA (Dow Jones Industrial Average): A stock market index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange (NYSE) and the NASDAQ.
  • DJTA (Dow Jones Transportation Average): A stock market index that tracks 20 transportation companies in the U.S.
  • DJUA (Dow Jones Utilities Average): A stock market index that tracks 15 utility companies in the U.S.
  • ETF (Exchange-Traded Fund): An investment fund that holds a collection of assets, such as stocks or bonds, and trades on a stock exchange like a single stock.
  • Eurodollar Index: A measure of U.S. dollars held in banks outside the United States.
  • GICS (Global Industry Classification Standard): A standardized system for classifying companies into sectors and industries.
  • Intra-market Analysis: Examination of relationships within a single market to identify trends and opportunities.
  • MACD (Moving Average Convergence Divergence): A trend-following momentum indicator that shows the relationship between two moving averages of prices.
  • NBD (Next Business Day): Denotes that the exchange rate or data is effective for the next business day.
  • RSI (Relative Strength Index): A momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset.
  • Treasury Yield: The return an investor receives on a U.S. government bond.
  • Value Line Studies: A service that provides investment research and stock ratings.