By: Adam Hamilton, CPA, Zeal Research - 31 January, 2020
The bottom line is the Fed’s QE4 Treasury-monetization campaign fueled this extraordinary recent stock-market surge. The S&P 500’s tight low-volatility ascent path since QE4’s birth in mid-October has closely mirrored the Fed’s soaring balance sheet, much like it did during QE3. But the Fed can’t inject hundreds of billions of dollars of newly-conjured money forever. Sooner or later it will have to taper off and stop QE4. Full Story
Just trade in the technical till Monday. Trump and his impeachment could be closed by Friday. This can result in some mild correction in gold. It remains to be seen how the prices in all metals and energies will move once China reopens. Various US jobs numbers will be released next week. Focus will be on global economy next week. Fundamentals will dictate price of all metals and energies next week. Full Story
Corona virus is spreading. Companies have restricted employees from travelling to China. Most global companies and domestic Chinese companies have asked employees to work from home till middle of February and also get themselves quarantined if they travelled to the regions affected by corona virus. Nations and global corporations have banned travel to regions affected by corona virus. Most of believe that the economic impact will be limited. I do not believe so. 2020 global growth will slowdown as a result of corona virus. Nations will continue with easy monetary policy. Interest rate cuts and liquidity injection will continue till April. Sharp corrections should be used to invest in gold. Full Story
The normally reliable Love Trade during China’s Lunar New Year has been impacted by the deadly coronavirus, which was first reported in the central Chinese city of Wuhan—population 11 million—but has since spread to other areas of the country, not to mention the U.S. Travel and spending in general have largely been restricted, with the Chinese government’s recent travel ban affecting as many as 35 million people. On Friday we even learned that Shanghai Disneyland has temporarily closed its doors in an effort to curb the outbreak. Full Story
Another thing which haunts me is that how will China fulfill its obligation with USA under the trade deal signed this month. Will another trade war be started or will China fulfill trade deal this year (due to US elections) and break the same next week. The spread of the Chinese corona virus will have a long lasting impact on Chinese consumer spending. Change in Chinese consumer spending will make it difficult for Chinese political leadership to fulfill their trade deal obligations with USA and other nations. The Chinese year of rat is testing the political leadership in China. Gold investment demand in China will skyrocket this year. I expect gold investment from China to be a major catalyst for gold price to near $2000. Full Story
Coronavirus. Who suspected that was coming. Epidemics and even pandemics are a somewhat regular occurrence. A check of statistics shows that there has been at least a dozen that have had an impact worldwide since 1900. That’s at least one every 10 years. But what is the effect on markets? We have a look. But the question begs. Will coronavirus morph into a worldwide pandemic or eventually just stay an epidemic? The former appears to be taking shape.
We moved our “Chart of the Week” from the end to near the beginning. We have a look at U.S. dollar hegemony and what it means.
Bonds and gold benefitted from the initial outbreak of coronavirus while stocks markets particularly those in Asia and oil and copper swooned. With bond yields falling the closely watched recession spread has begun to narrow again. As to the stock markets, have they topped? It was 20 years ago January that the Dow Jones Industrials (DJI) topped signaling the beginning of the end of the high tech/dot.com bubble. The resulting crash saw the NASDAQ collapse 80%. Can history repeat?
This article does not contain any coronavirus. Full Story
I have indicated significant gold stocks rallies with blue rectangles. As you can see that they mostly occur around Dow/Gold ratio peaks and Major Dow peaks.
In fact, the best nominal gold stocks rallies have been after Major Dow peaks (1929 and 1973). This is not really surprising, since many of the factors that drive gold stocks rallies are bad for general stocks. Full Story
By: Rick Ackerman, Rick's Picks - 27 January, 2020
I’d written here on Friday that it would take a lot more than a virus to kill a U.S. bull market that has been powered by reckless buying. But we shouldn’t dismiss the possibility that coronavirus could turn out to be the black-swan event that investors knew would arrive eventually. The heavy selling that ended the week was noteworthy because it was accompanied by bullish breakouts in the Dollar Index and T-Bonds. Although it is difficult to predict exactly what this may portend, it is safe to say that if the respective uptrends in these massive markets gain momentum over the next week or two, a major tone change for financial markets and the global economy could lie in the offing. Full Story
Gold and silver will remain firm as long unless a vaccine to the Chinese corona virus is found. Treatment is there for the virus but there is no vaccine. The quicker the spread of the corona virus globally the quicker will gold and silver rise. Yen will also fall sharply if the numbers zoom. Numbers (of people affected by the corona virus) are suppressed or fudged globally to prevent a panic. Full Story
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