Lancers32
Often Wrong Never In Doubt
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The surge in long-term rates has cracked the stock market below what’s easily apparent, say Bank of America’s derivatives strategists.
A team including Benjamin Bowler say the S&P 500 SPX has held up thanks to the major tech stocks, but problems have emerged: gold GC00, -0.34% has been down six days in a row, real estate is flirting with a nearly three-year low and utilities XLU matched their worst five-day return in 20 years outside the global financial crisis and COVID.
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The bigger picture is that the Fed has conditioned investors to fear upside risk more than downside risk and that investors have become comfortably numb to macro uncertainty, they say.
They say S&P index level protection remains good value, in case tech “catches down” to other sectors. The team said various S&P 500 put products appear to be cheap relative to other options, due to high interest rates.
The bond market is front and center for investors these days, with JPMorgan warning of a “financial accident” if yields keep going up, driving prices lower.
“The damage in bonds has been more severe and more sustained than for equities, and you can’t help wondering where the real damage is. You can’t have this much value destruction in bonds without there being some stress somewhere. However, it’s near impossible to work out where exactly it might come to the surface and on the heels of the worst month for bonds of the year,” noted a team of Deutsche Bank strategists led by Jim Reid on Monday.
Our call of the day from Ed Yardeni, president of Yardeni Research, offers an idea on the next market to fall. That’s as he raises the alarm over what he calls the “Wild Bunch,” or bond vigilantes, who have “seized control of the Treasury market.” His hope is that cooling inflation will calm things down.
In a note to clients, Yardeni ticks off evidence of those bond vigilantes in action. For starters, the fact that the 10-year Treasury yield BX:TMUBMUSD10Y rose on recent weak data instead of declining suggests a “shift in bond investors’ focused from what monetary policy makers may do to rising alarm about what fiscal policy makers are doing.”
“The worry is that the escalating federal budget deficit will create more supply of bonds than demand can meet, requiring higher yields to clear the market; that worry has been the bond vigilantes’ entrance cue,” he says.
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Don't know. He never said.Where did he go?
He is looking to be a buyer soon if not now. 190ish HUI.World Class Financial and Commodity Analsyis from Gann Global Financial
Gann Global’s stock market forecasting and commodities trading insight has helped thousands to enter and exit trades profitably; daily stock market forecastswww.gannglobal.com
Long term SILJ series of lower highs. Silver down close to 3 bucks off last week's high in the after market yesterday. Question is was yesterday a good buyable double bottom or do we see high 6's or even a move back down to the 2020 lows? Closer to 0 the better the risk/reward is.
View attachment 10657
S&P 500 daily chart.
I mean you can eyeball some areas of potential support, but nothing is really a given at this point.
[So.]
View attachment 10658
He is looking to be a buyer soon if not now. 190ish HUI.
Not strictly technical, but this feels like it might have some downward momentum.I've had these line for a while... I think ~ 4179 is about the level to buy this.
View attachment 10659
Not strictly technical, but this feels like it might have some downward momentum.
[I mean look at 10 year yield. This feels (there's that word again) a tad serious.]
[Of course I don't trade on feelings, so just sharing some thoughts I guess. Uh, I meant feelings.]
Thinking a bounce. Nothing goes straight down.AGAUD Mometum crossed +ve today, normally that is within a week of AGUSD bottoming and going +ve. Toady it was smaller in the USD but coincident. ROC also maxed out downside to levels that typically indicate a low. IMO there is a trade in silver here and now, in the least a bounce. JMO DYODD and use stops etc!
Hunt on Silver.
Thinking a bounce. Nothing goes straight down.
[I mean look at 10 year yield. This feels (there's that word again) a tad serious.]
[Of course I don't trade on feelings, so just sharing some thoughts I guess. Uh, I meant feelings.]
He's right, it is a doom loop ...
It's a mirror of what I posted this morning:
https://www.pmbug.com/threads/the-lunatic-fringe-market-and-trade-chat.4019/post-81010
It's a mirror of what I posted this morning:
https://www.pmbug.com/threads/the-lunatic-fringe-market-and-trade-chat.4019/post-81010
So I'm guessing Armstrong was wrong with his buy Gold by July prediction. Might be a good idea to unplug the computer and plug it back in.
The gold market is seeing some healthy buying as the U.S. labor market continues to show signs of cooling as the number of private sector jobs created last month significant missed expectations.
Wednesday, private-sector payrolls processor ADP said that 89,000 jobs were created last month. The data was significantly weaker than expected as economists were looking for job gains of around 154,000.
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In a recent interview with Kitco News, Robert Minter, director of ETF Investment Strategy at abrdn, said investors continue to underestimate the growing supply imbalance, impacting the global economy and keeping inflation persistently elevated.
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Minter said that while there has been some improvement in recent months, the supply of critical LME metals, nickel, lead, zinc, aluminum, and copper, are still near their lowest levels in decades. He added that demand for these metals continues to grow as the world transitions to greener energy technology. He said that he doesn't see future production keeping up with demand.
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While Minter said that he is bullish on a variety of metals, his top picks for investors are copper, gold and silver.
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Finally, Minter said that as an investor, if you love copper and gold, then you have to love silver.
"Silver is the best of both worlds. It's an important monetary metal and industrial metal. I would expect when sentiment shifts, silver will outperform both metals," he said.
Simon White - Bloomberg macro strategist said:...
Treasuries are losing their efficacy as a portfolio hedge.
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But if the very reasons for owning them – their portfolio-smoothing properties and recession protection – can no longer be taken for granted, managers may question owning many of them at all, no matter what the price.
In a world of high cash rates, owning more equities may end up looking more attractive – the return of TINA (There Is No Alternative), but with a vengeance (however ill-advised that may be).
There will always be demand for government debt, from households, banks and liability-matchers. But for a large constituency, owning USTs is a choice.
With non-believers, there’s no need for vigilantism, just a swift exit past the pews and out of the church of bonds – and even higher yields as a consequence.
PM's slip sliding away...
Gold prices are hovering around session lows after activity in the U.S. service sector saw a moderate pullback in September, according to the latest data from the Institute for Supply Management (ISM).
On Wednesday, the ISM said its Services Purchasing Managers Index declined slightly to a reading of 53.6% last month, down from August's reading of 54.5%. The data was right in line with consensus estimates.
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Readings above 50% in such diffusion indexes signify economic growth and vice-versa. The farther an indicator is above or below 50%, the greater or smaller the rate of change.
“Thirteen industries reported growth in September,” Nieves said. “The Services PMI, by being above 50 percent for the ninth month after a single month of contraction and a prior 30-month period of expansion, continues to indicate sustained growth for the sector. The composite index has indicated expansion for all but three of the previous 163 months.”
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