Brien Lundin – Making Sense Of The Macroeconomic Trends In The Markets Today
Brien Lundin, Editor of the Gold Newsletter, joins us to overview the upcoming New Orleans Investment Conference Oct 12-15, and provides his take on the macroeconomic trends and key catalysts in the general markets and gold and silver sector. Brien reviews the impressive who’s who list of key note speakers and 100 companies being showcased in a few weeks in New Orleans, and also points out that it is a chance to network with well-informed serious investors in the resource space. Cory and I will also be attending next month in person, so check out the event lineup and information in the link below.
We discuss gold’s recent outperformance over other assets classes by falling less, but that for some time the trend has been lower due to the central bank tightening and the rising US dollar. This leads to a discussion on the weakened global currencies continuing to push the greenback higher, and also how the recent actions and pivot by the Bank of England may be a hint of the potential future pivot that the Fed will also need to make. The other key driver in the markets and commodities lately has been interest rates pushing higher and higher, and we review the inverted yield curve, and ponder what would happen if there are not enough buyers of bonds and the Fed loses control of that market.
We wrap up with some reasons that Brien is still optimistic that when the precious metals sector does bounce and get more inflows for its safe haven appeal, that the gold and silver mining stocks will respond by moving up faster than many are expecting. While the mining stocks have definitely been under pressure the last 2 years, they are much closer to bottoming at these very low valuations and Brien notes that there are some amazing opportunities being presented to investors at this time.
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Stanley Druckenmiller Sees ‘Hard Landing’ In 2023 With A Possible Deeper Recession Than Many Expect
CNBC – Wednesday Sep 28, 2022
“Billionaire investor Stanley Druckenmiller believes the Federal Reserve’s attempt to quickly unwind the excesses it helped build up for a decade with easy monetary policy will not end well for the U.S. economy.”
“Our central case is a hard landing by the end of ’23,” Druckenmiller said at CNBC’s Delivering Alpha Investor Summit in New York City Wednesday. “I will be stunned if we don’t have recession in ’23. I don’t know the timing but certainly by the end of ’23. I will not be surprised if it’s not larger than the so called average garden variety.”
One Of The Market’s Most Important ‘Stress’ Indicators Is Flashing Red
Wednesday, SEP 28, 2022
“The all important FRA-OIS indicator of interbank funding stress (and money-market risk) is soaring once again, and at last check was above 37bps, having exploded off ‘no stress’ levels just two weeks ago… The level of ‘stress’ is now higher than that surrounding the liquidity crisis prompted by the sanctioning of Russia following Putin’s invasion.”
A very quick primer on this all important spread:
https://www.zerohedge.com/markets/one-markets-most-important-stress-indicators-flashing-red
Hi Ex, it’s all too easy to see an economic turndown these days. Nordstream and Nordstream one were shut down yesterday by explosions, there goes Europe’s economy.
Canada has a lot of debt-based problems, and they are getting worse with QT.
Russia has been taken out of the equation.
China has mostly a one-way trade with America, they ship us cheap goods and we print money. This will not be allowed much longer.
The World is getting smaller as I can see isolationism on the horizon. In order to have prosperity nations need to trade and there are many barriers in place which will be hard to dismantle. DT
Hi DT. Yes, sad but true, that the world economies look quite tenuous at present, and the more data that comes in from different countries regarding inflation, bond markets, currencies, central banks, interest rates, housing, manufacturing, trade, you name it…. it makes the future look that much more perilous.
But hey… we’ve all got each other right? Haha! 🙂
Think this is a good time to ask for all the trillions of dollars to be given back by Corporations, Banks and politicians that they received from Central Banking. That would go a long way toward softening the landing of this bad economy on the tax payers.
There was a time when people could walk away and stiff the bank with unpaid credit card balances or mail them the keys to a house that was underwater. Students never paid back their loans and it was forgotten a few years later.
Student loans are not even dischargeable in bankruptcy these days. You can have a car wreck and be mumbling vegetable and still have to pay your student loan. Bankers have come a long way not counting exorbitant usury interest rates.
That is correct…………. That is why , I have said from the beginning on the RIP OFF, no one should get a student loan…… BONDAGE FOREVER……….
FREAKY FRIDAY…………………………….. AGAIN………….. 🙂
Freaky Friday is “prep” for a Monday Smash.
I’d submit that we already had a Freaky Friday last week, followed by a Freaky Monday, Tuesday, Wednesday, and Thursday… so Freaky Friday again… bring it on… 😉
We have FREAKY FRIDAY…………. EVERY WEEK…………… Nothing is going as planned… as long as we have a FAKE FED……….. and A FAKE GOVT…… 🙂
China tells state banks to prepare for a massive dollar dump and yuan buying spree as Beijing’s prior interventions have failed to stem its currency’s worst year since 1994
Phil Rosen – Reuters – Thu, September 29, 2022
“The move could stem the yuan’s fall, as it remains on track for its largest annual loss against the dollar since 1994. A hawkish Fed has pushed the dollar to 20-year highs this year, pressuring currencies around the world.”
“The People’s Bank of China has told major state-run banks to prepare to shed dollar holdings while snapping up offshore yuan, which has continued to fall despite prior interventions, sources told Reuters. The scale of this latest effort to prop up the yuan will be big and could provide a floor to the Chinese currency, according to the report.”
https://news.yahoo.com/china-tells-state-banks-prepare-141448869.html
People have been saying China could dump a number of it’s dollar holdings for years, because China has threatened to do so in the past. Then there were folks on the other side of this debate that stated that was never going to happen and don’t listen to people that claim China could dump their dollars.
Well…. China just announced it is going to dump a substantial amount of dollars to shore up the Yuan. So that settles that…
This is strikingly similar to how Japan just sold US Treasuries last week to shore up their economic situation and the Yen. Then the Bank of England had to take evasive action last week and earlier this week to avoid an economic and system collapse over there. Europe is also a basket case at present.
Things are starting to break… Volatility and systemic shocks are back on the menu…
Time to batten down the hatches and prepare for the storm…
I do wonder if this move from China to dump dollars and dollar denominated assets in the near future could cause the US Dollar to roll over? That action could serve the PMs as bit of a tailwind, and potentially give them a boost. Not sure the timing of the Chinese action from their banks, but it sounds like it is going to happen in the near-term.
Asian Equities Slide as Global Selloff Deepens: Markets Wrap
Tassia Sipahutar – Bloomberg – Thu, September 29, 2022
“Asian stocks dropped on Friday in the wake of another plunge on Wall Street as the prospect of higher interest rates and turmoil in Europe stoked fears of global recession. Shares fell in Japan, Australia and South Korea after the S&P 500 slid more than 2% to the lowest since November 2020. An MSCI Asia-Pacific equity gauge was on course for its seventh straight weekly loss, the longest streak since September 2015.”
“Chinese shares gave up early gains ahead of a week-long holiday and after factory activity showed mild growth. US Treasury yields were little changed after days of being whipsawed on the back of a debt crisis gripping the UK.”
“The Cboe Volatility Index has been well over 30 for almost all of this week, reflecting heightened worry among equity investors. Another group of Federal Reserve officials struck a hawkish tone, German inflation topped 10% and the UK government’s tax plan continued to weigh on market sentiment.”
https://news.yahoo.com/asian-stocks-set-fall-global-223134465.html
Collapse time for the stock market versus the gold and silver miners…
https://stockcharts.com/h-sc/ui?s=QQQ%3ASILJ&p=D&yr=1&mn=0&dy=0&id=p72328792098&a=1107808877
Priced in dollars, stocks could bounce soon but probably not much nor for long.
https://stockcharts.com/h-sc/ui?s=%24SPX&p=W&yr=5&mn=0&dy=0&id=p63278698406&a=1170131265
Trends: https://tinyurl.com/4ypebbv9
Markets Drawn and Quartered
PMs Low Level Topping
NatGas Bottoming
Buckling Up
PCE is what ? BDC…Yellow PCE is what?….number 3 means what in those?
was hoping for some clarity…thanks before BDC
“Personal Consumption Expenditures” which the FED apparently takes very seriously.
One source for details: https://www.dailyfx.com/economic-calendar
Table numbers are relative Trend Strength.
Most alerts are eliminated after the fact (yellowed “PCE”).
added nem jan 45 calls at 2.55, Li at 2, dml at 1.55
Bought Africa Oil today. Rick Rule suggestion. (AOIFF). Tied to Lundin oil interests primarily out of Nigeria. Obviously risk but sounds like undervalued. Possibly worth some research.
Ex, what’s your latest take on WM?
I was going to retake a position yesterday but I bought some more Abra and FR (First Majestic) instead. I sold BRC and FVI, crap companies with a huge loss.
Abra is a monster, especially with the latest drill results.
Please comment on Wm, FR and Abra. I hold 777.000 ABRA as of yesterday
I am seeing a lot of three white soldier patterns in the daily charts. Nice way to end the week. Next week could be very interesting.
I think we have a MAJOR low in place even if next week begins with a “shocking” retest of the lows in the miners (which I am not predicting but is possible).
We are in for much more powerful action than we saw from the 2018 low to the 2020 high in which GDX went up more than 150%. This move will be fueled by big bear markets in stocks AND bonds, something we haven’t seen in many decades.
The Nasdaq 100 just obtained its first monthly close below its monthly Bollinger Bands since 2008 in addition to closing below its June low.
https://stockcharts.com/h-sc/ui?s=%24NDX&p=M&yr=25&mn=0&dy=0&id=t2981748873c&a=1194245810&r=1664570936174&cmd=print
Monthly GDX looks like a fantastic long term opportunity to get long and thanks to today’s rise, it managed to finish the month higher. The 5 month run lower is the worst in GDX history. It fell for 5 months in 2013 but that fall (measured from monthly high close to monthly low close) was almost 30% while this one was 38%.
https://stockcharts.com/h-sc/ui?s=GDX&p=M&yr=15&mn=0&dy=0&id=p83648523368&a=1260469386&r=1664571160287&cmd=print
The Canadian dollar’s weakness today was interesting and welcome because it completed the move to a big fork support and allowed the weekly RSI to finish the week with an oversold reading (the first since the 2020 panic). It did not appear to help the USD any.
https://stockcharts.com/h-sc/ui?s=%24CDW&p=W&yr=5&mn=11&dy=0&id=t1617424706c&a=589642399&r=1664571549930&cmd=print
UUP tested this fork resistance on Mon/Tues/Weds and ended the week with a bearish candle and the highest weekly volume in 11 years (which looks like bearish distribution action to me).
https://stockcharts.com/h-sc/ui?s=UUP&p=W&yr=6&mn=0&dy=0&id=t0829937985c&a=1257966523&r=1664571938650&cmd=print
Thanks for those charts and commentary. That Canadian dollar chart is very interesting! I just got my internet back since Sarasota was hit by the hurricane so I have some catching up to do.
Hecla chart is looking interesting as is Brixton.
Hecla had a great week as it returned 8:1 leverage to gold and 12:1 leverage to silver. As you said, next week could be very interesting!
https://stockcharts.com/h-sc/ui?s=HL&p=W&yr=3&mn=11&dy=0&id=p21358557245&a=1120953252
I actually finished in the green two days in a row. I called the brokerage firm and complained ….NOT.
However, I added to my Nine Mile today as there was some hype going on, on the ceo.ca site, plus a price pop. Some of you may want to check it out. Others may want a beer. Still others may want to go to Disney World, but it is not timely.
I think I got the Nine Mile idea from Allan Barry … it might be a good one.
LOL! Thanks Lakedweller, that gave me a good chuckle!
I sure like the looks of GDX this week. A strong day tomorrow to finish the week/month/quarter would be nice…
https://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=5&mn=0&dy=0&id=p55664659164&a=988301549