#1318 Darius Dale | Bitcoin Hits $60,000 and Still Bullish?!

— The 42 Macro "weather model" uses 20 quantitative indicators (growth, inflation, unemployment, liquidity, credit, positioning) to forecast three-month asset returns and volatility across stocks, bonds, and Bitcoin.

— Current market regime is "Goldilocks"—bullish signals across equities, bonds, and Bitcoin with above-median returns expected and below-median volatility.

— Global liquidity is rising, driven primarily by China's policy stimulus (reserve requirement cuts, lending rate reductions) and positive private-sector credit creation.

— Inflation expected to bottom in Q3 2024, then accelerate in Q4; the market is currently pricing an "immaculate disinflation" that may not materialize.

— Productivity growth is the key variable for determining soft vs. hard landing; currently tracking above trend, which supports margins and limits inflation and job losses.

— Election year politics are secondary to macroeconomic fundamentals; Fed activity in election years (2008–2020) has followed economic needs, not political cycles.

— Stock market composite signal: bullish (green); bond market: bullish; Bitcoin: bullish.

— Liquidity models show uptrending signals in both 42 Macro Net Liquidity and global liquidity proxy; historically, rising liquidity correlates with positive excess returns in stocks and Bitcoin.

— Implied S&P 500 earnings sales growth: 4.4%; next 12-month P/E earnings growth rate: 8.2%.

— Expected GDP growth to decline 170 basis points over 12 months; headline inflation to fall 80 bps; unemployment to rise 40 bps.

— Dollar real effective exchange rate turned bearish this week; sovereign fiscal balance trending weaker at −6.3% of nominal GDP.

— Treasury positioning: bearish; equity positioning: neutral; commodity positioning: bearish.

— Investors should monitor productivity data closely throughout 2024; a reversal to negative productivity growth would likely trigger a shift from Goldilocks to a bearish regime and derisk accordingly.

— Bitcoin and traditional asset allocations benefit from quantitative risk management overlays (like 42 Macro's KISP process); a 60/30/10 SPY/AG/Bitcoin strategy with overlays showed max drawdown of −11% vs. −26% without overlays over the 2018–present period.

— Expect one or two Fed rate cuts (May–June timeframe) before inflation likely re-accelerates in Q3–Q4, limiting further easing despite election-year pressure; focus on economic data, not political calendars.