Wednesday, March 10, 2021
Bond Yields Roil Markets, Gold/Silver Drop / Commodities / Gold and Silver 2021
By: MoneyMetals
As financial markets sold off this week, precious metals got dragged down in the selling. The culprit, once again, was rising bond yields.
On Thursday, the 10-year Treasury climbed above 1.5%. While still low on a historical range, the upside momentum has investors concerned. Over the past seven months, the 10-year yield has tripled from a low of just 52 basis points.
The 10-year note serves as a benchmark for mortgage rates as well as risk premiums in the equity markets. Elevated price-to-earnings ratios in the S&P 500 are more difficult to justify in a higher interest rate environment.
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Wednesday, March 10, 2021
Real US Interest Rates and Gold / Commodities / Gold and Silver 2021
By: Richard_Mills
Several factors influence gold prices (mainly the US dollar, gold ETF inflows/ outflows, inflation rate, bond yields, safe haven demand, physical gold demand, gold supply) but none is more reliable than real interest rates.
The demand for gold moves inversely to interest rates — the higher the rate of interest, the lower the demand for gold, the lower the rate of interest the higher the demand for gold.
The reason for this is simple, when real interest rates (interest rate minus inflation) are low, at, or below zero, cash and bonds fall out of favor because the real return is lower than inflation. If you are earning 1.6% on your money from a government bond, but inflation is running 2.7%, the real rate you are earning is negative 1.1% — an investor is actually losing purchasing power. Gold is the most proven investment to offer a return greater than inflation, by its rising price, or at least not a loss of purchasing power.
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Wednesday, March 10, 2021
Gold Price Momentum Selloff / Commodities / Gold and Silver 2021
By: Zeal_LLC
Gold has suffered unrelenting selling in the last couple months, hammering it and its miners’ stocks much lower. Those outsized anomalous losses have left sentiment in tatters, with overpowering bearishness universal. Gold’s thrashing had nothing to do with fundamentals, it was driven by cascading momentum selling in gold futures and gold-ETF shares. But such dumping is finite, increasingly likely to exhaust itself.
Last summer, gold rocketed 40.0% higher out of last March’s COVID-19-lockdown-spawned stock panic. That massive upleg left this metal extraordinarily overbought, guaranteeing a correction to rebalance both sentiment and technicals. That came right on schedule, with gold dropping 13.9% over 3.8 months into the end of November. That healthy selloff was in line with this bull’s precedent, leaving gold sufficiently oversold.
Gold’s three prior corrections during this secular bull had averaged 14.3% losses over 4.1 months. And that was skewed big, with two of those earlier selloffs seriously exacerbated by unique anomalous events. So the odds swung around to favor gold’s next bull upleg getting underway. Indeed it soon started marching higher in a strong uptrend, carrying gold up 9.8% by early January. Then gold went pear-shaped!
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Wednesday, March 10, 2021
Gold And US Treasuries – Punctures In The Everything-Bubble / Commodities / Gold and Silver 2021
By: Kelsey_Williams
Meanwhile, eyes are fixed on interest rates for US Treasury bonds. During the same six-month period (August 2020 – February 2021) during which the price of gold fell by seventeen percent, the price of the 20-year US Treasury bond fell by twenty percent. That IS a huge deal, as it corresponds to sharply higher interest rates from less than 1% last August to as high as 2.26% just the other day.
The rush to proclaim correlation between interest rates and gold has resumed. Also, warnings and predictions of much higher inflation from around the globe are increasing.
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Tuesday, March 09, 2021
This Isn’t Your Father’s Overvalued Stock Market / Stock-Markets / Stock Market 2021
By: John_Mauldin
Many analysts contend that current stock valuations resemble the dot-com era. You can see it visually at CurrentMarketValuation.com. Some highlights…
The classic “Buffett Indicator” certainly seems to be in nosebleed territory. Notice that the valuations in 1966, the beginning of a long-term bear market, were also high.
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Tuesday, March 09, 2021
3… 2… 1… Let the Gold Corrective Rally Begin / Commodities / Gold and Silver 2021
By: P_Radomski_CFA
Folks, it seems that gold has formed an interim bottom, and a short-term corrective upswing is now likely, before the medium-term downtrend resumes.
Any further declines from this point are not likely to be significant for the short-term. The same applies to silver and the miners.
In yesterday’s (Mar. 4) intraday Gold & Silver Trading Alert , I described briefly why I think that the very short-term bottom is already in (or is at hand), and in today’s analysis, I’ll illustrate my points with charts. Let’s start with gold.
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Tuesday, March 09, 2021
US Bond Market Rocks the Richter Scale / Interest-Rates / US Bonds
By: Michael_Pento
The global sovereign bond market is fracturing, and its ramifications for asset prices cannot be overstated. Borrowing costs around this debt-disabled world are now surging. The long-awaited reality check for those that believed they could borrow and print with impunity has arrived. From the U.S., to Europe and across Asia, February witnessed the biggest surge in borrowing costs in years.Thursday, February 25, 2021, was the worst 7-year Note Treasury auction in history. According to Reuters, the auction for $62 billion of 7-year notes by the U.S. Treasury witnessed demand that was the weakest ever, with a bid-to-cover ratio of 2.04, the lowest on record. Yields on the Benchmark Treasury yield surged by 26 bps at the high—to reach a year high of 1.61% intra-day--before settling at 1.53% at the close of trading.
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Tuesday, March 09, 2021
Stock Market Great ADP Figures But Things Can Still Turn Nasty / Stock-Markets / Stock Market 2021
By: Submissions
Powell gave a wait-and-see answer to my yesterday‘s rhetorical question about the bears just starting out, indeed. The S&P 500 plunged, breaking far outside the Bollinger Bands confines, illustrating the extraordinary nature of the move. Rebound would be perfectly natural here (and we‘re getting one as we speak) – but will it be more than a dead cat bounce?
Stocks partially recovered from last Friday‘s intraday plunge, and good news about the stimulus clearing House followed after the market close – stock bulls took the opportunity, and Monday‘s session gave signs that the worst is over. Tuesday‘s move partially negated that, but even after Wednesday, the short-term case was undecided (even as tech kept acting relatively weak).
Yesterday‘s session though gives the short-term advantage to the bears, and that‘s because of the weak performance I see in other stock market indices and bonds. The Russell 2000 got under pressure, negating what by yesterday still looked like a shallow correction there. So did the emerging markets and their bonds. More downside can materialize either suddenly or slowly over the coming say 1-2 weeks. It depends on the tech and its heavyweight names, where these find support.
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Tuesday, March 09, 2021
Amid Uncertainty, China’s Quest for Bold Development / Economics / China Economy
By: Dan_Steinbock
At a historical moment of hope and uncertainty, China pledges bold economic development, despite global tensions.
China’s annual “Two Sessions” meeting has approved national priorities for 2021. Delivered by Premier Li Keqiang, the Government Work Report set a growth target of over 6 percent for Chinese economy for 2021, releasing a numeric goal after it was skipped in 2020, due to the COVID-19 pandemic.
China plans to create more than 11 million new jobs in 2021, while keeping inflation rate (CPI) at 3 percent and cutting the deficit-to-GDP ratio to 3.2 percent. The goal is to increase annual R&D spending by more than 7 percent in the next five years, including foreign-funded R&D centers in China.
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Tuesday, March 09, 2021
U.S. Stocks: Here's a Big Sign That "Sentiment Cannot Get Much More Extreme" / Stock-Markets / Stock Market 2021
By: EWI
The stock exposure of the most bearish active investment managers is revealing
Relatively few investors want to bet against the stock market rally.
As a Feb. 18 financial article says (CNBC):
Short interest in the market has fallen to near-record lows.
Indeed, bullish sentiment is so extreme that even the most bearish among a group of professionals are behaving bullishly.
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Monday, March 08, 2021
The AI Stocks Megatrend Big Picture / Stock-Markets / AI
By: Nadeem_Walayat
Stock markets are soaring on the back of vaccines that herald the end game to the Covid nightmare. However the vaccines, covid-19 are all mere blips in the long-term trend trajectory that is being driven by AI and it's full spectrum application. For instance these are the key areas that I identified to focus upon over 5 years ago, though the number is always increasing as AI encroaches into every aspect of our lives which is why my focus primarily on core AI stocks rather than applications of AI.
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Monday, March 08, 2021
The Future of FINRA, Regulatory Defense and Bad Stockbrokers / Stock-Markets / Financial Markets 2021
By: Steve_Barker
FINRA stands for the Financial Industry Regulatory Authority. This tends to be the first line of defense against a bad experience with a securities broker, and it also has many other benefits. FINRA is an independent nongovernmental organization that focuses on the root of problems, securities sold to investors, and selling them to investors. It is the single largest independent regulatory body for securities firms operating in the United States. It writes and enforces the rules governing broker-dealer and registered brokers firms in the United States.
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Monday, March 08, 2021
Almost Everyone Is Online: But Most of the Money Isn’t / Companies / Tech Stocks
By: Stephen_McBride
Ottawa sure is a long way from Silicon Valley. In the summer of 2010, Tobi Lütke met with venture capitalists at Bessemer Ventures. He was looking for a couple million bucks to fund his money-losing Canadian startup. Cash was so tight Lütke’s father-in-law had to write checks to pay the employees.
Bessemer was skeptical at first. A tech startup in bitterly cold Ottawa? But they took the plunge with a $7 million cash injection, valuing the startup at $25 million.
Guess What Shopify (SHOP) Is Worth Today?
It’s Canada’s largest company, valued at $160 billion. Longtime RiskHedge readers know I called Shopify “the next great trillion-dollar stock.”
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Monday, March 08, 2021
It is Time for Stock Market Investor Caution? / Stock-Markets / Stock Market 2021
By: Andre_Gratian
Current Position of the Market
SPX Long-term trend: There is some evidence that we are still in the bull market which started in 2009 and which could continue into the first half of 2021 before coming to an end.
SPX Intermediate trend: SPX is not likely to end its intermediate trend until it reaches about 4150.
Analysis of the short-term trend is done daily with the help of hourly charts. They are important adjuncts to the analysis of daily and weekly charts which determine longer market trends.
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Monday, March 08, 2021
Gold Predictive Modeling Suggests A New Rally Targeting $2300+, But When Will it Start? / Commodities / Gold and Silver 2021
By: Chris_Vermeulen
One of our readers’ favorite tools is the Adaptive Dynamic Learning (ADL) predictive modeling system. This tool maps out technical and price patterns into an array of similar setups using historical data, then applies that data to current and future price bars. Using the ADL predictive Modeling tool, we can see into the future based on historical technical analysis that maps statistically relevant price activity and shows us the highest probability outcomes.
Monthly ADL Gold Predictions
In this research article, we’re going to focus on Gold and how current price action suggests a bottom is likely near the $1720 level. The YELLOW price channels on this Monthly Gold chart highlight exactly where we believe support is located for Gold. If this $1700 price level is breached to the downside, then the previous lows, near $1400, are the next support level for Gold.
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Monday, March 08, 2021
Gold: Crisis or Opportunity? / Commodities / Gold and Silver 2021
By: The_Gold_Report
Peter Krauth, editor of Gold Resource Investor, delves into gold's recent price movements and discusses whether now is a good time to buy gold and gold stocks.
People…relax. It's a correction.
If you're a serious gold investor, then I sympathize.
If you're freaking out, then this is not for you. If you're anxious, then you need to check your premises.
After all, what's changed since gold reached a new all-time nominal high over $2,000 last August?
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Monday, March 08, 2021
US Bitter Cold Snap is a sign of the times / Politics / Climate Change
By: Richard_Mills
The polar vortex is at it again.
The weather phenomenon responsible for bone-chilling cold fronts settling over parts of North America and Europe, including those that normally experience mild winters, has held much of the central United States in its icy grip the past few weeks.
In mid-February, a blob of Arctic air moved as far south as Texas, causing extreme cold and heavy snowfalls, loss of life, traffic chaos and power outages for millions. According to the US National Weather Service, more than 100 million people over a distance of 1.6 million square kilometers were under winter storm warnings. On Feb. 16, some three-quarters of the continental USA was covered in snow, the greatest extent on record in the database which goes back to 2003.
As the mercury plunged to –31F (-37C) in Lincoln, Nebraska and –28 (-33F) in Sioux City, Iowa, parts of Texas were colder than Alaska. Dallas’s 4F (-15C) was the chilliest the city has experienced since 1989, while in Houston, the temperature at the airport fell to 17F, or -18C. A reported 4 million Texans were at one point without power, due to the extreme cold and several snow / ice storms. The two maps below by NASA show Houston and surrounding areas that were plunged into darkness overnight on Feb. 15-16, compared to the week earlier.
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Monday, March 08, 2021
How Scan Computers Builds Your Custom Built PC - Scan.co.uk Review (2) / ConsumerWatch / Computing
By: HGR
The day has finally arrived when Scan computers has actually started to build our custom build PC system. Here's what to expect in terms of time and feed back during Scans build process which covers all key aspects from hardware build, to software installs to memory and burn in tests all the way to dispatch when buying a custom computer from Scan.co.uk in 2021.
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Monday, March 08, 2021
US Economy, GDP, Unemployment, Inflation Impact on House Prices Trend 2021 / Economics / US Economy
By: Nadeem_Walayat
The US economy is recovering fast from the corona crash with annualised GDP down just 2.8% for Q3, a remarkable performance and far better than most western nations.
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Monday, March 08, 2021
BACK TO SCHOOL - UK Coronavirus Lockdown Ending - Summer Holidays & Booming Economy Ahead / Politics / Coronavirus 2021
By: N_Walayat
UK lockdown is ending! The kids are all back to school starting Monday 8th March, soon followed by outdoor sports facilities, then shops with the bulk of opening including Universities to resume teaching students after Easter so in about 2 months now, by Mid May we will be largely be living in post pandemic lockdown's world when we can all soon go on holiday at home and abroad with our vaccine passports which should mark the start of a 2 year economic boom, given pent up demand and £400 billion of money printing to date. Though with 5 million on furlough then despite the coming boom unemployment will increase as 5 million workers find out whether they still have a job or not.
Yes masks will still need to be worn for some time and mass testing will continue especially wherever variants are detected nevertheless the end is now in sight all courtesy Britains highly successful vaccines programme where the UK literally leads the world, out vaccinating every major developed nation with the United States not far behind.
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