This isn't about Cathie Woods' new space ETF. It's about the U.S. economy achieving liftoff right here on the ground.
I'm not exactly following the news minute-by-minute (yet), but even I couldn't miss the strength in the ISM surveys out this past week. First the manufacturing survey--the bellwether, and one of the market's favorite gauges--jumped to a 37-year high for March. Okay, but it's just manufacturing. It's the supply chain issues, it's a teeny part of the overall economy, etc.
Then, even more impressively, the service-sector reading on Monday soared to a new record high. Yes, it only goes back to 1997, while the manufacturing survey goes back decades more than that. However, does it leave any doubt that this economy--of which 85 to 90% is in the service sector--is roaring back right now?
Of course the 10-year bond yield has tripled from its lows last summer, when talk of the "New Great Depression" was in vogue. The astute folks who were instead talking correctly about "V-shaped" rebounds at the time--like MKM's Michael Darda--say we're headed towards 3% on the 10-year now.
That doesn't exactly mean you need to be hoarding gold and dogecoin to fend off the new dollar debasement, either. That's a pretty reasonable yield for long-term bonds, unless you're a tech SPAC with an infinite multiple. The dollar, by the way, is so far behaving just as David Zervos predicted it would--which is to say, it hasn't collapsed at all, but mostly just gone sideways. (The dollar index was at 92 when we did that video last November, and is at 92 still today.)
Point being, the economic strength the ISM surveys are picking up is real and likely here to stay. It's not just restocking. It's not just supply-chain constraints. It's a surprisingly tight labor market out there, and if we spend anything like the $2 trillion more that's being floated in Washington right now, we might just end up skyrocketing past "normal."
See you the Monday after next!