Nick Hodge – Macroeconomic Data Continues To Weaken Yet Opportunities Remain In The Resource Sector
Nick Hodge, Co-Owner of Digest Publishing and editor of Foundational Profits and Hodge Family Office, joins us to review the macroeconomic data continuing to weaken, but also where he sees both near-term and longer-term opportunities in the commodities and resource stocks.
We start off looking at the market reactions to higher interest rates and a strong US dollar, but also noting the trend of GDP and job growth revisions downward, stickier inflation, rising wages, and potential challenges moving forward for the consumer. It’s an odd environment where the general markets have also rolled over the last few months, but where investors are not seeking the normal defensive areas of bonds, utilities, or gold, but instead have preferred to plow into cash and fixed income money markets waiting for more market certainty. There has also been an increase in hedging through options and volatility showing up in the VIX numbers.
With regards to gold, Nick reiterated that he continues to sell the rips and buy the dips, taking advantage of the volatility and range bound trading. With oil and uranium stocks, he remains bullish on both in the medium to longer term, but notes that they were do for a healthy corrective move lower, which we’ve been seeing play out the last few weeks, presenting potential opportunities. With regards to copper, he has not seen a reason to be overly exposed to the copper stocks, aside from a few speculative positions, and mentioned several times over the course of the year his expectation that copper prices would stay closer to $3.50 than $4.50, which has been a great call. He points out that longer-term, the value drivers are there to take copper to much higher price levels, but not in the short to medium-term, with a recession still very much on the horizon.
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John Feneck – Will October Be The Worst Month For Stocks? Fed Is ‘Backed Into Corner’
w/ David Lin – Oct 3, 2023
1:47 No new highs on SPY would be made in 2023, despite tech rally
2:10 Bull run in broad mkt is “long in the tooth”
3:01 We are in “no man’s land” on certain momentum stocks at/near all-time highs
3:26 Tech / A.I.
4:57 Interest Rates
7:42 Airbnb policies under pressure
9:51 Debt on a balance sheet
10:46 GDX
11:42 “We own zero gold at 1925/oz”
12:31 “Expect broad market pressure in Oct 2023”
13:30 Inflation is causing high capex at the PFS level
16:00 “Managing the business” in mining is important
17:43 ECRFF has 2.4mil oz gold in a solid jurisdiction and is conserving cash (no large raise expected in 2023)
18:33 Russia / oil
19:30 Margins in mining today much better than in 2009-2012 rally
20:15 All time hi for gold in 2024 and stress in financials
20:54 We remain short Wells Fargo WFC, Santander Bank SAN and are using FAZ to short financials
22:11 Most people have their “core money” in 401ks – how do you diversify?
23:14 Fed has another 25 BPs to go in coming months, but likely cant “mean too much business” as mid-late 2024 unfolds
24:02 Critical Minerals / Battery Metals conference in Wash DC April 29-30
26:00 Copper & Silver
26:30 Gold to silver ratio
27:14 Broad market
Oil: ‘Demand destruction has begun’, say JPMorgan analysts
Ines Ferré · Yahoo Finance Senior Business Reporter – Wed, October 4, 2023
“Oil rallied an average of 28% last quarter, jumping to a 2023 high in September, as OPEC+ output cuts and further supply restraints from Saudi Arabia and Russia created a deficit in the market. Expect crude demand to decline this quarter following the recent rally, JPMorgan analysts said in a recent client note.”
“After reaching our target of $90 in September, our end-year target remains $86 [per barrel],” wrote Natasha Kaneva, head of the global commodities strategy team at JPMorgan.
https://finance.yahoo.com/news/oil-demand-destruction-has-begun-say-jpmorgan-analysts-151912451.html
It is time for someone to be grounded without their phone. Enough is enough…
Gold update!
It may sound redundant but if you’re not buying these lows in the miners then your going to be disappointed.
I don’t pretend to be a good or great technician but it’s been awhile since i posted my thoughts. I expect next week to have a high percentage probability that gold will put a final low that does not make a new low in this move down/sideways consolidation. Expecting breakout third week of October with November an absolute explosive move higher for the miners from current lows. It will get started though third week of October.
Best of luck to all it’s been a grind but the time is here now before us.
Glen
Rick Rule Fireside with Robert Friedland
Ivanhoe Mines (recorded July 27)
https://youtu.be/HJKtk9ayBCg?si=4aEBLN38jbB2Eapq