Sean Brodrick – Macroeconomic Outlook, and Why He Is Holding Off Adding To Positions In Gold, Silver, and Copper Stocks, But Has Been Adding More Oil and Rare Earths Stocks
Sean Brodrick, Editor of Wealth Megatrends and contributing analyst to Weiss Ratings Daily, joins us to review the macroeconomic market movers he is watching and he outlines why he is still bullish but holding off on adding to positions in gold, silver, and copper stocks, but that he has been adding to positions in dividend-paying oil stocks and rare earth stocks.
We start off looking at the financial macroeconomic factors coming back into focus this week and moving forward, now that some of the recent noise from geopolitics has faded back down. He is not convinced in that the tariff implications are behind us, but believes the market is largely shrugging off the pause coming off of the reciprocal tariffs, and that it is likely that many of them just get pushed off further into the distance. He believes the large upcoming tax and spending bill in the US is going to mean more debt and deficits, which is a negative longer-term, but that the tax cuts are seen as a market boon because they will allow citizens to hang onto more of their own money, and thus those excess funds will find their way into the stocks markets. Sean notes the continued weakness we’ve in the US long bond, US dollar, and business guidance through year end.
We discussed the fact that the gold price had surged higher in April, well before the geopolitical conflict even began between Iran and Israel, so there wasn’t really any war premium to come out of the PMs, despite those recent narratives being spun. Sean noted that after seeing gold channeling sideways the last couple of months at historically very high levels, that it needed to rest. In a similar sense, after Silver broke up through long-term $35 resistance, and got up to hit $37 briefly, that it made sense for it to pull back down and retest the area of the breakout, and that this is healthy overall.
With regards to the precious metals equities, Sean is mostly holding onto the names that he and his subscribers have purchased over the last few months, but did sell his Equinox Gold Corp.(TSX: EQX) (NYSE American: EQX) position a few weeks back to free up some funds to be able to rotate down into more gold developers and silver stocks once he believes this current pullback has bottomed.
Next we shifted over to the steadily climbing copper price, noting that we’ve actually seen some life in the copper junior stocks, where (COPJ) has been outperforming (COPX) or (ICOP). While he agreed this move higher in copper and the copper equities has been positive, and based on strong fundamental drivers, he’s not that animated by investing in the copper juniors, and hasn’t traditionally fared well in them.
Wrapping up, Sean did mention that he has been animated accumulating the better run intermediate oil stocks that pay good dividends even at current WTI oil prices, and specifically mentioned Granite Ridge Resources, Inc. (NYSE: GRNT) as an example of the type of oil stock that has his attention. We also discussed why he is bullish on rare earth stocks that have exposure to downstream processing and separation, and he highlighted why he likes MP Materials Corp. (NYSE: MP).
Click here to follow along with Sean’s work at Weiss Ratings Daily and Wealth Megatrends
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Is it just me but bearish engulfing on oil stocks was a false breakdown, pretty sure oil stocks are heading higher from here.