Jobs data majorly surprises to the upside, markets higher, PMs lower
Chris Temple joins me to address the surprise jobs report this morning. With the estimate of a decrease of 7.5 million jobs in May the report showed an increase in 2.5 million jobs. This is feeding into the risk on trade with markets higher and precious metals and treasuries lower. Chris also shares some thoughts on a trade into copper stocks.
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Gold is oversold versus stocks but looks like it could dip another 5-7% versus SPY:
https://stockcharts.com/h-sc/ui?s=GLD%3ASPY&p=D&yr=0&mn=9&dy=0&id=p81717527391
Gold is very oversold versus silver but still looks like it might (just maybe) have one more plunge before it starts to beat silver for awhile:
https://stockcharts.com/h-sc/ui?s=GLD%3ASLV&p=D&yr=0&mn=9&dy=0&id=p87376850976
At this rate the S&P 500 will be over 4,000 in a couple of months, then it should really take off…
This would be unfortunate because all those people that I have been warning about having too much in stocks and nothing in gold are not going to listen to me again until the next time when it looks like the world is coming to an end and stocks crash. Just like they did not listen to me about stocking up on essentials when this virus first started to happen. Luckily for them it was not as bad as it could have been and probably will one day be.
If it manages a new high, it will be a huge bull trap.
I totally agree with JMiller and Matthew, my comment was half tongue in cheek and half an increasing fear that this may indeed happen in which case the ultimate downside will rival the 1929-1934 crash and unfortunately wipe out a lot more people than the move in March which was just 30% or so
Wow, look at this huge setup unfolding in S&P 500. Squeeze the FOMO !
by @TheTechnicalTraders -Chris Vermeulen – 5 Jun 2020
“If you have FOMO on the stock market you better watch this video because it will make you feel better if what is unfolding is exactly what I have been talking about for the past week. The Short/FOMO Squeeze.”
https://ceo.ca/@thetechnicaltraders/wow-look-at-this-huge-setup-unfolding-in-sp-500-squeeze-the-fomo
The economy is strong, the US is rich, big, and diversified, to be influenced by stock market fluctuations. Just look at those wonderful employment figures. Speculators/investors/bankers have now decided that deflation is over and this is the perfect time to be buying again. Even The President say’s be a Bull on America. The expected recovery is because the rich, the wise, and the powerful are leading the charge. Why one only needs to apply a little imagination to see the Rough Riders are taking San Juan hill again. LOL! DT
Haha! Good one DT.
Aside from the flock of Anderson Coopers reporting the news, main stream Americans are perfectly capable of deciding for themselves what jives.
Great info Ex. We may be able to enjoy that golden cross yet.
long CORR
(MMX) Maverix Metals and (PAAS) Pan American Silver Announce Closing of Secondary Offering
by @newswire on 5 Jun 2020
“Pan American has acquired ownership or control of an additional 8,250,000 common shares of Maverix through the exercise of 8,250,000 common share purchase warrants. 5,000,000 Warrants had an exercise price of US$1.56 and 3,250,000 Warrants had an exercise price of US$2.408. Maverix received gross proceeds of approximately US$15.6 million. After the exercise of the Warrants, Maverix will have 128,009,804 common shares issued and outstanding on an undiluted basis.”
“The 10,350,000 common shares of Maverix disposed by Pan American in the Secondary Offering represented approximately 8.6% of the issued and outstanding common shares of Maverix on a non-diluted basis. Immediately following the closing of the Secondary Offering and the exercise of Warrants, Pan American directly owned 25,483,500 common shares of Maverix, representing approximately 19.9% of the issued and outstanding common shares of Maverix on a non-diluted basis.”
https://ceo.ca/@newswire/maverix-metals-and-pan-american-silver-announce-closing
Gold Price Drops on Stronger US Jobs data
Jackson Chen | June 5, 2020
“An increase of 2.5 million jobs versus an anticipated decline of 7.5 million incited expectations of recovery in the world’s no.1 economy, eroding the investment appeal of safe-haven assets such as gold.”
Pressure was already on gold Thursday when the European Central Bank approved a larger-than-expected expansion of its stimulus package, boosting investor confidence in riskier assets. Meanwhile, stock indices worldwide kept close to their three-month highs.
“The European Central Bank’s move yesterday is supporting risk-taking …. It seems more investors holding gold are switching out to the equity market,” UBS analyst Giovanni Staunovo told Reuters.
https://www.mining.com/gold-price-drops-on-stronger-us-jobs-data/
PNG threatens Barrick over alleged gold export attempt
Cecilia Jamasmie | June 5, 2020
“Papua New Guinea (PNG) has threatened Barrick Gold with criminal proceedings, claiming the company’s joint venture in the country was planning to illegally export $13 million in silver and gold to Australia.”
“The move, the Mineral Resources Authority (MRA) said, is considered illegal given that BNL is not allowed to process or ship gold since the government’s refused to extend its mining lease for the Porgera mine almost two months ago.”
https://www.mining.com/png-threatens-barrick-over-alleged-gold-export-attempt/
With the fresh correction in gold and silver in mind, I think the PMs match upwards in the near future will be more of a grind than a moonshoot. Especially as we are still reasonably early in golds bull market.
I have a little wager with a friend of mine made a month ago that silver will not hit $22 before years end. At stake: A nice slab of pale ale beer. I am confident but who knows for sure.
Looks like there was a 5 mil discrepancy by counting layed off employees as being employed rather than unemployed. Which means if true, the unemployed increased and todays general market was a misdirection the algos weren’t aware of.Next week we have the Fef meeting and the algos have a standard way of dealing with meetings also. But, yhr Fef has nothing to offer but QE to infinity. I think the general markets have some issues to think about.
This was supposed to be under employment reporting above.
Good listen and good thoughts from Chris, especially comments about copper. Not impressed with job #s. A few hundred billion of the care act is bound to modify some of the numbers……
BLS…….should be B(L)S……….
https://www.zerohedge.com/markets/bls-admits-survey-error-may-have-reduced-unemployment-rate-3