Weekend Show – Peter Boockvar and Dana Lyons – Making Sense Of All The Recession Talk And How To Invest In These Flat Markets
Welcome to the Weekend Edition of The KE Report. May is off to a much more interesting start than all of April, however at the end of the end of the week we didn’t see huge market moves. Most markets are still grinding sideways in tight ranges close to either highs or lows for the year.
With all the talk about recession in the second half of the year and the market pricing in 4 Fed rate cuts by January we take a more level headed look on what would need to happen for this to be true. Everyone can be right on the recession call but carrying it over to markets can have very different outcomes.
Please keep in touch with Shad and I through email. We love hearing what you all think of the markets and companies we featured throughout the week. Our email addresses are Fleck@kereport.com and Shad@kereport.com.
- Segment 1 and 2 – Peter Boockvar, Chief Investment Officer at Bleakly Financial Group and Editor of The Boock Report kicks off the show with a discussion on the data playing into recession calls and how recessions can be very different in nature. We discuss everything from inflation outlooks, job data, banking issues, earnings season and the debt ceiling.
- Segment 3 and 4 – Dana Lyons, Fund Manager and Editor of The Lyons Share wraps up the show by sharing his trading strategies for the US banking sector, US markets, gold and gold stocks and cryptos.
NatGas has bottomed,
or will very soon!
It sure seems that way, PPO oscillator is extremely stretched in one direction
It sure seems that way. PPO oscillator was stretched on extreme side in one direction
CJ: Yes. Note how the mid-April breakaway gap up was resolved later in the month. Those hashed RS Lines (Resistance/Support) will become important as the trip north unfolds: https://postimg.cc/5QWZVwcx (UNG Hourly). Now half BOIL, half cash. BDC
BOIL/UNG (Red) : https://postimg.cc/75sbwhbj
Sold holding. All cash.
Buffett’s Big Oil Bet
Jesse Felder – The Felder Report (05/06/2023)
Robust U.S. Jobs Report Delays Gold Breakout
David Erfle – Friday May 5th, 2023
“Heading into the highly anticipated FOMC meeting results on Wednesday, the gold price had been trading in a tight $40 range around the key $2000 level for the past few weeks. But regional banking concerns became the focal point for investors to begin an expectedly volatile week, which also included European Central Bank (ECB) monetary policy results on Thursday, followed by U.S. jobs data on Friday.”
“Monday saw the largest banking failure in the U.S. since 2008 after First Republic went under, marking the third death of a major U.S. bank this year. Regulators took possession of the bank to begin the week and JPMorgan Chase will acquire the majority of the regional bank’s assets and remaining deposits worth around $92 billion.”
“Regional bank stocks fell sharply on Tuesday, with PacWest Bancorp’s shares falling more than 39% and Western Alliance’s shares dropping 20% during midday trading. The Regional Banking ETF (KRE) sank sharply to fresh 52-week lows as deposit flight to mega-cap money center banks continues in the wake of the 2nd largest U.S. bank failure in history, First Republic Bank.”
“Reports say PacWest Bancorp, a California-based lender, is in trouble. Its stock price saw another 60% decline in after-hours trading Wednesday. The renewed banking fears pushed Gold Futures out of its recent $40 trading range above $2020 ahead of a Fed meeting conclusion later in the day.”
“Gold Futures follow through buying into overnight trading then came within $4 of mid-2020’s all-time high of $2089 per ounce, on bets that policy-makers would have no choice but to halt rate hikes from here to prevent further problems in the U.S. banking sector and economy, due to overly-tight credit conditions.”
“Next up, early Thursday morning, was the European Central Bank (ECB) monetary policy decision. Once the ECB meeting statement declared an also expected 25 basis point rate hike, the Euro went down initially. But then reversed after ECB President Christine Lagarde made explicit hawkish comments in her Q&A session when emphasizing that the ECB will bring interest rates to sufficiently restrictive levels. The ex-French politician also said that the hiking process is a “journey” and we are not there yet. The ECB President also stated there is more ground to cover, and that this is not a pause.”
“This news took the stock market, the U.S. dollar, and Treasury yields lower, bringing more safe-haven buying into gold. With the gold price threatening a technical breakout above $2100, the DXY is coming close to critical neckline support level at 100. A close below this key level of support in the U.S. dollar index may be enough to fuel a breakout in Gold Futures above $2100 in the not-too-distant future.”
“Volatility in the gold price ramped up this morning, after U.S. jobs data showing continued robust growth whipsawed Gold Futures down towards the key $2000 level. U.S. nonfarm payrolls rose by 253,000 last month, the Bureau of Labor Statistics said on Friday. The monthly figure was well above the market consensus estimate of 181,000. As stated previously in this column, a monthly close above $2100 in Gold Futures is required to signal a technical breakout…”
Yes, You Should Be Worried About a Potential Bank Crisis. Here’s Why.
May 4, 2023 – New York Times By Amit Seru
Mr. Seru is a professor of finance at the Stanford Graduate School of Business.
Ray Dalio: The U.S. and China Are On ‘The Brink Of An Economic Resources War’
Anna Golubova – Kitco – Monday May 01, 2023
“Controlling essential technologies and minerals to defend against being cut off from them, and being able to cut off the opponent’s essential technologies and minerals, is now being done and is provocative,” Dalio wrote. “It is leading to more onshoring and ‘friendshoring,’ both of which are much less cost-effective and will reshape alliances.”
Dalio also made his thoughts known about gold and Bitcoin in a recent interview with podcaster Chris Williamson.
When asked about the crypto space, Dalio said he owns a small amount of Bitcoin but favors gold. “I would prefer gold,” he said. “I don’t understand why people are more inclined to go to Bitcoin than gold. If you look internationally, gold is, for central banks, the third highest reserve asset. First is dollars, then euros, then gold, and the Japanese yen. And central bankers are buying gold, and they’re not buying bonds.”
The billionaire described gold as “timeless and universal.”
“Where Else Do You Go Besides Gold And Silver?”
By Quoth the Raven – QTR’s Fringe Finance May 06, 2023
“The regional bank crisis is continuing on, or ahead, of schedule. Not wanting to live in an echo chamber – but also mindful of the fact that I’m in the minority with how I think about the economy – I wanted to have a long-form discussion with two of my friends, Andy Schectman and Larry Lepard, to discuss the state of the U.S.”
We talked about the blowoff valve for the economy – something I wrote about days ago – as gold and precious metals.
“When we take out 2100 with authority, it’s game on,” Larry says. “That’ll be a clear historical breakout. When that occurs, we’re going to squirt up to 2500 or 3000 very quickly.”
“Where else do you go beside gold and silver? Yes I own a precious metals company, but I try to be objective. Where do you go in the system where rising rates inversely affect stocks and bonds?” Schectman asks.
Year-Over-Year Productivity Negative for 5 Quarters, That’s Never Happened Before
Wages are soaring but year-over-year productivity is sinking the most in history.
Mish Shedlock – Mish Talk – 05/05/2023
TF Metals Report @TFMetals – Craig Hemke
“The birth-death adjustment adds 378,000 completely made up fantasy jobs to the total.
Without this purely statistical guess, the total payrolls report would have been -125,000 “jobs”.
Nevada Regains Position As Most Attractive Mining Jurisdiction
Mining.com – May 4, 2023
“The state of Nevada has recovered the world’s top-ranked jurisdiction spot for mining and exploration it yielded last year to Western Australia, the Fraser Institute’s 2022 annual survey of the global industry shows.”
“The ranking is the result of a combination of two indexes — the jurisdiction’s geologic attractiveness (minerals and metals) and government policies that encourage or discourage exploration and investment, including permit times.”
“Canada’s Saskatchewan province continues to be on the podium for overall investment attractiveness, dropping slightly from a rank of 2nd in 2021 to 3rd in 2022. Rounding out the top 10 are Newfoundland & Labrador, Colorado, Northern Territory, Arizona, Quebec, South Australia, and Botswana.”
(IAUX) (IAU) i-80 Gold Announces New High-Grade CRD Discoveries at Ruby Hill & Expands Ruby Deeps & Lowerjack Gold Horizons [in Nevada}
– Results Include 226.1 g/t Silver, 10.0 % Lead, 9.7 % Zinc and 0.5 g/t Gold over 8.4 m (CRD)
– Also 11.6 g/t Au over 13.1 m (Lowerjack)
“Our 2023 drill program has picked up where we left off in 2022, expanding high-grade mineralization in several zones and resulting in multiple new discoveries.”, stated Tyler Hill, Chief Geologist of i-80 Gold. “These results confirm a substantial mineralized system that remains open for expansion making us optimistic of further discoveries as several of our priority targets remain to be tested.”
Ex, I thought you would be at Churchill Downs today instead of slaving away. Remember you only pass this way once, unless you plan to live to be 200 and then once is enough. LOL! DT
Haha! Good point DT. Well I went out with some friends last night for a long dinner and then dancing and am heading out to a beach with my lady this afternoon, so I’m trying to take some time to smell the roses and enjoy the present. Carpe diem!
Gentleman……still reading and listening as much as possible…..2 points I get out of reading most comments…..the one regards everyone’s understanding that a certain amount of manipulation exists. The key is to take it into account as one makes their investments and plans their strategy…on that front I could see gold/silver pulling back during next week as it is short term overbought and CPI and PPI numbers will be released during the week and we all know they will manipulated to make things look better than they are. After that pullback I see the uptrend continuing and making new highs.
The other point is many of us see the flaws in the EV agenda and have stated said concerns. Having said that, it doesn’t change the fact the agenda is going ahead full bore despite even the general public in a recent survey having over 50% of people still looking to buy a gas powered vehicle when they buy their next car……. so we can poo poo the idea all we want but the bottom line is there is tons of money to be made buying critical metal plays.
Stock specific, I obviously have my bias with Magna and EMO and now osisko metals for potential value plays but the stock I’m really getting excited for again is Brixton as we get close to the drilling beginning again..pure exploration play but lots of upside potential. Had the lull I expected with no news flow but sold off more than I expected as I thought it would hold in the low .20’s. Expect it back in the .20’s by months end.
Ex or anyone else following the Stillwater Critical Minerals. I was waiting to see if they were able to get price up enough to get those warrants exercised but it never happened and warrants expire this month so is there an alternative plan aka a financing planned or what.
As always great work Cory and Shad and thanks to all the contributors….still looking like the year of the wolf. 😎
Good comments Wolfster, and agreed on all points. I’ll try to get Mike from Stillwater Critical Minerals on for an update soon, but yeah, at one point all pre-revenue generating companies will need to raise more capital.
It’s sickening. Just look at one of the Chinese cities and then compare with what is going on with America today.
I lived in Guangzhou for 15 years and the big city metros are the most incredible Chinese transportation story.
GZ metro is 100% underground and sells over ten million rides daily. The cost is a minimum thirty cents for a two mile ride, up to a maximum of two bucks.
The other story is fast trains servicing much of the country.
It is a shame not more people can own a car in China. 🙂
America was the first country in the World to drive an automobile to the poor house, they are destined to be the second country to achieve that same result ninety-three years later. DT😉
New cars once part of The American Dream, now are out of reach for many. DT
Peppy Pepe: “It’s a gigantic snowball all over the world. We cannot even keep up with it,” Pepe Escobar said in an interview with the New Rules podcast.
Is it possible that the global south will walk away from their USD debts after establishing their own currency, leaving the US holding trillions of worthless paper? Or taking a bad haircut?
Not likely if they want to maintain trust, no matter what the ‘other’ side has done to them. However, the Dollar Debt that China and others(?) hold could be used as an equalizing force. Could a world based Gold/Commodity ‘Dollar’ supersede, yet not replace, the old model?
I chart Bitcoin, but do not own any.
On one hand, there are two bearish patterns that might indicate much lower BTC prices. Reverse H&S (currently working on right side of head) which would give a ~ $9,000 target and (2) a fairly rare Diamond Top pattern that would give a ~ $24,000 target (also at 144 SMA (Low) = support line).
But …. on the other hand (“Give me a one-handed Chartist ! *), the MACD looks like BTC is beginning another leg up when the triangle pattern is completed. Possible divergent RSI.
I follow Gareth Soloway’s weekly updates on his BTC charts, so that might be why I also have a possible $9,000 bottom target. At that point, I might consider buying BITO as a long-term hold (not-HODL)
* Harry Truman quote: ““Give me a one-handed Economist. All my economists say ‘on hand…’, then ‘but on the other…”
Looks like the bears are gunning for a double top in silver and it’s easy to see why but if they don’t get it silver will move several dollars higher quickly as they get squeezed.
Same goes for GDX vs QQQ.
SILJ:GDX finally filled its significant weekly gap of 3 years ago.
The Canadian dollar reversed powerfully and is ready to break out.
Friday’s action undid Thursday’s GDX:SPY breakout but it probably won’t stick for another week.
Silver’s COT is not pretty but it still should not be relied upon for short term direction. Silver could move up quickly before correcting.
REDACTED’s host Clayton Morris did a GLITZY infomercial last evening on YT for new IPO USGO. STOCK UP 25% this morning. He did the same in Mar with Dolly Varden on a Sunday evening with the very same results
60 minute UNG…..This shows one of THE strongest reversal patterns…This occurring after an extended down move…an extreme over sold condition…extreme sentiment fear….at a correct seasonal cycle juncture…w technicals set to support moves up…will it work …no idea…no one tells me a thing…glta…i will not mention this bottom alert again …..until the 3 year cycle tops ….hopefully right translated…https://tos.mx/0RiNqfi
Friday’s low should hold.
Will likely confirm
later, if so.
hey BDC.. I.still remain a bit thick to understand the numericals inside the boxes…but i do get that Black is a good thing…lol….We should be near if not at the elusive low in /NG…Since the years back when it was this price we have had like 50% inflation of the currency…seems like it should be inflation adjusted cheap..but i have no data on that…
Larry, Friday’s low ‘slingshot’ is panning out so far.
Thursday’s ersatz low must hold though!
Sold some puts on UNG. Made a few bucks coffee money.
Terry, PMs will someday set up like NatGas did Friday. A first thing GDX call option buy then, two steps OTM, could pay off immensely. One proven example was 700% same day. BDC
Added some Aztec Minerals and then fell asleep on the keyboard…
(Maybe I got that backwards)
FT headline: “European [natural] gas price sinks to lowest level since energy crisis began”