Brien Lundin – Is The Move Today In PMs An All Clear For Investors?
Brien Lundin, Editor of the Gold Newsletter and our host at the New Orleans Investment Conference joins us to discuss the pop in metals and equity prices today on the back of the lower than expected CPI data. We carry this data over to Fed expectations and highlight the major drop in the US Dollar.
Click here to keep up to date with Brien at the Gold Newsletter website.
Thanks Lakedweller2. Haha! I couldn’t help but use the Charlie Brown analogy once again, especially when we’ve heard from so many investors that got tripped up and fell resulting in negative sentiment. It’s been frustrating for some investors to miss so many rallies and then try to jump on board after the moves had happened and then quickly reversed.
It’s not been an easy 2 years in the resource stocks, with short periods of surging prices, and then sharp reversals back lower. Traders have had to be much more nimble then Chuck trying to kick the football… that’s for sure…
Wall St Soars As Cooling Inflation Spurs Bets Of Smaller Rate Hikes
By Devik Jain and Sruthi Shankar – Reuters – Nov 10, 2022
“Wall Street’s main indexes rallied on Thursday, with the tech-heavy Nasdaq leading gains, after data showed consumer prices rose less than expected in October, spurring hopes that the Fed might scale down the size of its future rate hikes.”
“The benchmark S&P 500 and the Nasdaq were set for their biggest percentage gain since April 2020 as the data pointed to strongest signs yet that inflation was starting to subside, with the annual number below 8% for the first time in eight months.”
“It’s very good news for future Fed policy and indicates that what the Fed has been doing has been appropriate,” said Mike Zigmont, head of trading and research at Harvest Volatility Management. “It takes off the table the risk that the Fed will have to overtighten and break the economy.”
Once again, it is clear, to Brien’s point, that what has been moving the markets for some time, are the market expectations around the Fed policy. This has had a direct impact on the direction of both the US Dollar and Interest Rates (specifically the 2 year and 10 year rates).
This was the market’s takeaway on Friday from the Jobs Report when unemployment came in worse than expected, giving the market confidence that the Fed would start to reduce the amount of their rate hikes at the next 2 meetings and slow their roll. That then took the US Dollar and interest rates down and spiked the punchball for all risk assets.
We heard a lot this week about the cause being the “rumor” that China was going to reopen, but that was taken down on Friday, was not covered much by the main stream media, and was quickly discounted and even reversed over last weekend, so it was done by Saturday/Sunday.
We’ve seen follow through buying in gold, silver, and the commodities and general equities on Monday, Tuesday, and today on Thursday, and it didn’t have anything to do with China rumors.
It is blatantly clear that the market is looking for a reason to be bullish, and again, this lower CPI inflation reading news out today was more fodder that the Fed would decrease the rate of their increases at the next 2 meetings, and therefore bad for the dollar/10 year, and good for the metals and mining stocks and other general equity markets. People may not like that, but it is largely what is guiding the markets, and as we discussed with Brien, and more importantly for the volumes of trading in the market, it is what the HFT algo trading from machines are keying off of using the same data points aforementioned.
A while ago somebody said PM’S cannot rally big time if Wall Street is also going up….Can someone comment on it
My guess is that when you intervene in all markets and particularly the General Markets for about 12 years ensuring they go irrationally up, the money is going to stay with a guaranteed winner whether fundamentally correct or not. While simultaneously suppressing metal prices and miners, in accordance with a theory that says that positive metal prices are a threat to the belief that fiat currencies and Central Banking are healthy, and that theory receives Governmental support in order to perpetuate power and control of an economy, then all investment actions are directed away from metals even to the extent of deceptive market practices sponsored by the government and private financial interests. In essence, you create a faux paper market that distorts feee market pricing, endorse corrupted practices and keep investment away from an entire sector
Got it thanks. Treasuries also up today, confirming what you say. PM’s could continue being an uphill battle.
Doc’s opinion, exactly
Great interview as always. Thanks.
Charlie Brown