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Elevated inflation readings and stock market turmoil continue to inflict pain on investors. Some are hoping for a quick turnaround. Others are just looking for a place to hide.  Unfortunately, there have been virtually no safe havens from the broad-based carnage outside of the energy sector and gold.  Gold has been one of the best performing assets this year by virtue of holding up better than stocks, bonds, and cryptos. But the yellow metal came under some heavy selling pressure in futures markets this week.  Metals markets seem to be trading more in line with economic slowdown fears and margin calls on Wall Street than with inflation. That will likely change when the recent spate of panic selling subsidies. But volatility is sure to persist. In a stagflationary environment, markets can plunge when stagnation fears predominate and just as dramatically snap back due to inflation pressures. Gasoline prices hit another new high this week while food shortage fears continue to drive higher grocery costs.  Wednesday’s Consumer Price Index report showed the rate of cost increases falling slightly in April from the previous month’s reading. But the CPI still came in at a higher than expected 8.3%. A CBS News report… Read More »Biden seeks inflation scapegoats, gold advocate wins GOP primary

In this week’s Live from the Vault, Andrew Maguire is joined by Patrick Karim, co-founder of technical analysis service, Northstar & Badcharts, to share bullish predictions for gold and silver, founded on a lifetime of accurately forecasting rallies.  The veteran chart trader analyses the breakout trend for gold and dissects the cyclical explosiveness of physical silver, indicating the historic opportunity for silver stackers everywhere.  

Global stocks rose on Friday as investors moved to buy the dip. In Europe, the German DAX rose by more than 1.3% after the positive results by Deutsche Telekom. The company’s net revenue for the quarter rose to 28 billion euros while its adjusted EBITDA jumped to 9.9 billion euros. In France, the CAC 40 index jumped by more than 1.5% while the Stoxx 50 moved upwards by 1.3%. These gains could be temporary because of the rising energy risks in the bloc. Natural gas prices have jumped sharply as investors react to the new sanctions by Russia. American stock futures rose even after Jerome Powell warned of the Fed’s policies. In a statement, he said that taming inflation will cause some pain. He said that taming inflation without causing a recession will depend on many factors outside the bank’s control. Nonetheless, he pointed that the bigger risk for the economy is a situation where inflation gets entrenched in the economy at high levels. The bank is expected to raise interest rates by 0.50% in the next two meetings and then shift to 25 basis points increases. Twitter came in the spotlight after Elon Musk announced that he was temporarily… Read More »US stocks rally accelerates as Powell warns of hikes

What moves markets? A fundamental analyst like me will talk about economic fundamentals: inflation rates, growth rates, monetary policy, fiscal policy, unemployment, etc etc. But these are facts. The facts aren’t everything. It’s also important to understand how people interpret the facts. Is the glass half full or half empty? It’s the same glass, but people will interpret it differently depending on their attitude. That interpretation is everything in markets, which arise because people want to buy or to sell. The seminal event in my career as an analyst was in January 1980.  On January 3rd, the Paris Bourse suspended gold trading for the first time in its history because of an order imbalance – buyers only. The next day it had to suspend trading again because of an order imbalance – sellers only. It took 26 years for gold to regain those prices. It took five years for me to see another day like that. On Feb 26, 1985 the dollar staged its largest single-day advance against major foreign currencies in seven years, rising 4 pfennigs in one day to hit a 13 ½ year high of 3.4390 DEM. The pound hit a record low that morning of $1.03… Read More »From FOMO to torschlusspanik

Energy The oil market continues to trade in a large intra-day range and is struggling to find direction during this period of uncertainty for both supply and demand.  Yesterday, the market took comfort in an easing of Covid cases in some parts of Shanghai. However, China still appears unwilling to drop its zero-covid policy, which will continue to be a risk for demand. There has been little progress in the EU’s proposed oil embargo against Russia. The European Commission and other member countries have failed to convince the Hungarian government to back the ban. Instead, the Hungarians have said that they would only support the ban if there is an exemption for Russian pipeline oil flows. If we were to see this, it would significantly water down the impact of the ban, given that the Druzhba pipeline flows amount to somewhere in the region of 1MMbbls/d, which is a significant portion of the roughly 2.3MMbbls/d of crude oil that the EU imported from Russia in 2021. Given the large volumes of Russian pipeline oil coming to the EU, it is hard to see an exemption on pipeline flows as an acceptable compromise. The longer these talks drag on, the more… Read More »The Commodities feed: EU no closer to a Russian oil ban

On the daily chart, the SP500 index is still retreating from the historical peak of 4819.5, which was reached in January. As we can see, stock markets have had a challenging year so far in 2022, and this index has fallen by more than %35 so far. Another sign of a prevailing downtrend is the 50-day EMA crossing below the 200-day EMA early in May. Even though buyers stepped in on Friday to raise the price to 3980, as long as the price moves below the moving averages, making lower tops and lower bottoms, the outlook is bearish. For the bears, the immediate key support is seen at 3811.6, which lines up with the 38.2% Fibonacci level. In case the downtrend continues, and sellers manage to push the price down, then the decline will continue towards the next support level at 3672.8. If this level cannot provide sufficient support to the price, sellers will be prepared to target 3500.2, aligning with the 50% correction of the prior uptrend. Alternatively, a bullish correction might take the price to the 3996.7 and 4062.1 resistance levels. If each of these price levels can successfully halt the rally, sellers will consider that an opportunity… Read More »S&P 500 bearish bias remains despite daily traction [Video]

Dow Jones Bears are taking a breather on Friday, as traders collects profits after a sharp fall this week (the index was down over 3% during Mon/Thu period. Stock markets were slashed by worries of high inflation and aggressive monetary policy tightening, as Fed signaled a series of rate hikes in coming months to contain the raging inflation. Today’s bounce from new multi-month low (the lowest since Feb 2021) eases immediate downside pressure, but the Dow is still on track for strong weekly loss ( the sixth consecutive weekly close in red). Corrective action was signaled by Thursday’s long-tailed daily candle and oversold conditions, with fresh bulls trading above initial resistance at 31824 (Fibo 23.6% of 34017/31146 bear-leg), but needs more work at the upside and violation of pivotal Fibo barrier at 32243 (38.2%) to generate initial reversal signal. Turbulent geopolitical and economic conditions are likely to keep traders away from risky assets, suggesting that current correction is likely to be limited and offer better selling opportunities, with the base of thick weekly cloud (32781) expected to cap and keep larger bears in play. Res: 31958; 32152; 32243; 32501. Sup: 31678; 31561; 31456; 31338.

Overview: Global equities are bleeding lower. Several large markets in the Asia Pacific region, including Hong Kong, Taiwan, and India are off more than 2%. Japan and Australian bourses fell by more than 1.5%. Europe's Stoxx 600 is off more than 2% and giving back the gains recorded in the past two sessions plus some. US futures are extending yesterday's loses. The sharp sell-off of equities has given the sovereign bond market a strong bid. The 10-year US Treasury yield that had approached 3.20% on Monday has tumbled to 2.81% today. The 2-year yield had approached 2.75% yesterday after the disappointing CPI report. It is now around 2.57%. European 10-year benchmark yields are 10-14 bp lower. The dollar is flying, except against the Japanese yen. The Antipodeans and Norwegian krone are getting tagged more than 1% today. The euro and sterling have been sold to new lows. Emerging market currencies are a sea of red too. Hungary, which kept its one-week deposit unchanged, has seen the biggest hit, off almost 1.5% today, while the Chinese yuan is off by slightly more than 1%, which is a large move for it. The Hong Kong Monetary Authority intervened to defend its peg… Read More »Dollar and yen surge

Overview: Global equities are bleeding lower. Several large markets in the Asia Pacific region, including Hong Kong, Taiwan, and India are off more than 2%. Japan and Australian bourses fell by more than 1.5%. Europe's Stoxx 600 is off more than 2% and giving back the gains recorded in the past two sessions plus some. US futures are extending yesterday's loses. The sharp sell-off of equities has given the sovereign bond market a strong bid. The 10-year US Treasury yield that had approached 3.20% on Monday has tumbled to 2.81% today. The 2-year yield had approached 2.75% yesterday after the disappointing CPI report. It is now around 2.57%. European 10-year benchmark yields are 10-14 bp lower. The dollar is flying, except against the Japanese yen. The Antipodeans and Norwegian krone are getting tagged more than 1% today. The euro and sterling have been sold to new lows. Emerging market currencies are a sea of red too. Hungary, which kept its one-week deposit unchanged, has seen the biggest hit, off almost 1.5% today, while the Chinese yuan is off by slightly more than 1%, which is a large move for it. The Hong Kong Monetary Authority intervened to defend its peg… Read More »Dollar and yen surge

Overview: Global equities are bleeding lower. Several large markets in the Asia Pacific region, including Hong Kong, Taiwan, and India are off more than 2%. Japan and Australian bourses fell by more than 1.5%. Europe's Stoxx 600 is off more than 2% and giving back the gains recorded in the past two sessions plus some. US futures are extending yesterday's loses. The sharp sell-off of equities has given the sovereign bond market a strong bid. The 10-year US Treasury yield that had approached 3.20% on Monday has tumbled to 2.81% today. The 2-year yield had approached 2.75% yesterday after the disappointing CPI report. It is now around 2.57%. European 10-year benchmark yields are 10-14 bp lower. The dollar is flying, except against the Japanese yen. The Antipodeans and Norwegian krone are getting tagged more than 1% today. The euro and sterling have been sold to new lows. Emerging market currencies are a sea of red too. Hungary, which kept its one-week deposit unchanged, has seen the biggest hit, off almost 1.5% today, while the Chinese yuan is off by slightly more than 1%, which is a large move for it. The Hong Kong Monetary Authority intervened to defend its peg… Read More »Dollar and yen surge