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Ed Moya – A Rotation Into Value Stocks, Fed Policy, Precious Metals, and Cryptocurrencies.

Ed Moya, Senior Market analyst at OANDA, joins us for a discussion on the general markets, Fed policy expectations, the rotation from growth to value, the precious metals sector, and the pullback in the cryptocurrencies.   We start off noting the rough start to this week in the general markets, but that there does seem to be a rotation into some more defensive sectors like consumer staples, utilities, healthcare, and energy.   We also not that that this recent pullback in some tech and growth stocks may be attractive to generalist investors looking perpetually to buy the dip near key moving averages.  

 

Next we delved into how the market is now adjusting for an increase in the number of central bank rate hikes, to fight persistently high inflation, and that this may continue to pressure the general markets and US dollar, but be an environment where gold and the precious metals may get a bit more of a bid.  Ed recaps that last year there were a number of factors working against a bid in gold, such as the move into surging cryptos, the strength of the general markets, and the strong dollar, but that many of those trends may be versing some as we get closer to the tapering of accommodative buying and the initiation of the rate hiking cycle.

 

We wrap up by getting Ed’s thoughts on the recent 40% crash in Bitcoin and pullback in many other cryptocurrencies over the last 2 months, and where he sees supporting coming in.  Many of the market traders and commentators in the crypto sector had pivoted over to positions in altcoins, but with the recent underlying weakness in both Bitcoin and Ethereum, that just pulled down the whole sector.  Despite many traders in the digital space rotating into NFTs and other DeFi companies in the sector, Ed still sees the recent bounce in Bitcoin from $37,600 up to $42,000 earlier this morning as proof there are plenty of investors on the sideline waiting to buy the dip.

Click here to follow along with Ed’s free daily market note.

Discussion
19 Comments
    Jan 10, 2022 10:35 PM

    Bill Holter: The Fed Must Inflate or Die
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    Palisades Gold Radio – Jan 9, 2022
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    “Tom welcomes back an absolute icon to the show, Bill Holter. Bill works and writes alongside the legendary Jim Sinclair at JSMineset.”

    “Bill discusses the current liquidity situation with the Reverse Repo system. Banks can sleep at night with their funds being stored with the Fed while earning a return. However, the Fed can’t allow interest rates to go negatives since that would indicate the dollar is worthless.”

    “JP Morgan has a large derivative concentration which carries 3.3 trillion in counterparty risk. Globally, everything is a promise today as the world runs entirely on credit. Small failures can cascade like dominoes. The Fed can’t truly taper and should they try we will see the next round of Q.E. within a few weeks. The Fed will likely attempt a small rate hike but multiple hikes seem unlikely.”

    “The situation today is completely different than when Paul Volcker raised rates in the 80s. We’re far more in debt than back then and the U.S. had plenty of collateral at that time. In today’s world, there is massive leverage and every available asset is already encumbered.”

    “Eventually, excessive money printing will completely dilute the currency and we already see that occurring with inflation. The Fed is completely out of means to limit inflation. Many countries are abandoning the dollar as quickly as possible.”

    “He notes that more people are wanting to get their dollars out of the system and into gold. It’s almost like a mini bank run. Inflation is causing part of this run but people are beginning to understand that something is very very wrong.”
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    https://youtu.be/dpXIZCcuSiY

    Reply
    Jan 10, 2022 10:39 PM

    FedCoin is Coming, Say Goodbye to Your Privacy in 2022 Warns E.B. Tucker | Outlook2022
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    Stansberry Research – Jan 7, 2022
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    https://youtu.be/zhv2Z2z9JoU

    Reply
    Jan 10, 2022 10:41 PM

    Bitcoin price: Why is crypto crashing? Crypto prices of BTC, Ethereum, Dogecoin, Solana and more in 2022 crash
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    Liv McMahon – The Scotsman – 10 hrs ago
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    “As Bitcoin’s price fluctuates around $40,000 as the first crypto crash of 2022 continues, here’s the latest cryptocurrency news and prices for Bitcoin, Ethereum, Dogecoin, Shiba Inu coin, XRP and more today.”
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    https://www.msn.com/en-gb/money/other/bitcoin-price-why-is-crypto-crashing-crypto-prices-of-btc-ethereum-dogecoin-solana-and-more-in-2022-crash/ar-AALhteo

    Reply
    Jan 10, 2022 10:47 PM

    It’s all so easy in The World of easy money, all sorts of dubious financial practices can go on as long as prices rise in the stock market and crypto currencies, margin accounts, countless bubbles floating everywhere. Easy money covers a multitude of sins.

    Millions of speculators, here a winner there a winner, what a wonderful way to live, forget about a reckoning, isn’t life great with easy money! Everybody ought to be rich on easy money, it’s The American way! LOL! DT

    Reply
    Jan 10, 2022 10:29 PM

    Tesla and Talon Metals T.TLO enter a supply agreement for nickel. It should be interesting tomorrow.

    https://money.tmx.com/en/quote/TLO/news/6348259803800704/Tesla_and_Talon_Metals_Enter_into_Supply_Agreement_for_Nickel

    Reply
      Jan 11, 2022 11:01 AM

      Thanks for sharing that news DT, as it has been a speculation for the last 2 years about which company (or companies) Tesla would partner with for their nickel off-take to be used in batteries. That’s a big win for Talon.

      Reply
    Jan 11, 2022 11:33 AM

    (AMX) (AMXEF) Amex Reports on Regional Exploration Program including Four New Gold Zones
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    by @newsfile on 11 Jan 2022
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    https://ceo.ca/@newsfile/amex-reports-on-regional-exploration-program-including

    Reply
      Jan 11, 2022 11:34 AM

      That was a pretty interesting comment that David made about his guest Kurt Wucker claiming that now that the credit card company Mastercard got involved in Bitcoin, that they are now throwing their weight around and affecting the price swings. I’d never heard that thesis before, but went and found the interview he referenced in the Kitco interview. I’ve not listened to it yet, but will post it below in case anyone is interested.
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      ___________________________________________________________________________________________________________
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      The Crypto Conspiracy Podcast – Episode 14 – The Other Side of Crypto That Nobody Is Talking About
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      By David Morgan on January 4, 2022
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      Special Guest: Kurt Wuckert Jr., Chief Bitcoin Historian
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      https://www.themorganreport.com/blog/the-crypto-conspiracy-podcast-episode-14-the-other-side-of-crypto-that-nobody-is-talking-about/

      Reply
        Jan 11, 2022 11:03 AM

        Thanks, I was about to go find that interview.

        Reply
    Jan 11, 2022 11:42 AM

    Certainly not a factor any time soon for uranium but definitely something to keep an eye on long term. Luckily I know someone in the field so have been aware of it for years.

    https://www.forbes.com/sites/christopherhelman/2022/01/02/fueled-by-billionaire-dollars-nuclear-fusion-enters-a-new-age/?sh=344f44b929f3

    Reply
      Jan 11, 2022 11:59 AM

      Yes, every ten years or so (for the last 50-60), nuclear fusion is trotted out and it’s always about ten more years away. 😉
      .
      Fusion may eventually happen, and it is quite interesting, but it is the ultimate reboot idea for the energy sector. Nikola Tesla’s idea around free energy make more sense, but then again, the problem he had convincing people was “where is the money in free energy?” Haha!
      .
      This recurring Fusion energy theme was teased even in cinema. Remember the last reboot of Wallstreet (released in 2010), where they were investing in a fusion company as the big new trend?
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      _______________________________________________________________________________________________________
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      Wall Street: Money Never Sleeps | Official Trailer (Feb 2010)
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      https://youtu.be/HcMFA2SHES4

      Here’s the clip that has the plug for Nuclear Fusion in it:
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      https://youtu.be/I2UVRT0DyRs

      Reply
        Jan 11, 2022 11:09 AM

        The other disruptive narrative to Uranium-based nuclear power that is trotted out every 2-3 years, is that suddenly Thorium-based nuclear reactors are going to be come the rage and replace the 440 existing reactors…. There have been people waiting on that for about 6 decades as well…
        .
        For now, uranium-based nuclear energy is the way and the investment thesis. People that were buying U-stocks when U308 was cheap and when the stocks were destroyed are up very nicely over the last few years. When the pandemic crash hit all asset classes, I was adding to most of my Uranium stocks as it was just a matter of time before they were rerated higher. It was discussed here on the blog and in interviews repeatedly that when Uranium stocks run, they really run fast, and boy did they ever, with most up 300%-1000% from 2 years ago to their highs a few months back.
        .
        Now that many of those same U stocks have corrected down by 25%-40%, they’re getting much more attractive again, and I’ve been gradually accumulating positions back into the weakness, and would actually have preferred a bit more corrective action. However, now with all the political instability in Kazakhstan, it may be another driver of higher U308 prices. The 150 new reactors planned and proposed to be built over the next decade is another value driver, so while others are waiting in the wings with fusion and thorium reactor dreams, I’m going to stick with boring ole’ uranium for investing in the here and now…

        Reply
    Jan 11, 2022 11:46 AM

    Some up…some down…same programs ….same algos. So much for another day.
    This gives me the chance to put “stop payments” on checks that Post Master DeJoy has blocked somewhere and pay bills electronically. Strange how the checks not arriving are all credit card and mortgage payments. “Things that go to banks”. How much can banks make in late fees if they don’t process paper checks until after the late dates? How many things can be foreclosed on. How many peoples credit can be ruined.?

    Reply
      Jan 11, 2022 11:09 PM

      Turned out to be a decent day …for stocks. Not so much for missing mail. I always drop my bills inside the Post Office box inside the post office. Only 6 of about 25 missing with the longest 6 weeks. I had a Priority Mail go missing for 5 weeks and they have a 2-3 day delivery guarantee. Not much of a guarantee if you don’t deliver it.

      Reply

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