Weekend Show – Sat 20 Jun, 2020

Hour 1 – Markets and Metals – The Fed Put, Gold Stocks to Watch In The Golden Triangle, and Great Bear Resources
Full First Hour

I hope you all enjoy this weekend’s show! I balanced out the broad market comments with thoughts on the precious metals and an update from Great Bear Resources

Please keep the emails coming to Fleck@kereport.com. I love hearing about the companies you are investing in.

  • Segment 1 and 2 – Rick Bensignor kicks off the show with his outlook for US markets, the US bond market, and the precious metals.
  • Segment 3 – Brien Lundin and I chat about the Golden Triangle and companies that have some interesting exploration programs this year.
  • Segment 4 – Chris Taylor, President of Great Bear Resources joins me to recap the recent high-grade drill results at a new exploration area called the Arrow Zone. Click here to read over the full news release.

Exclusive Company Interviews The Week

Rick Bensignor 
Brien Lundin
Chris Taylor, Great Bear Resources

Craig Hemke from TF Metals Report – Thu 18 Jun, 2020

Are we entering the summer doldrums for metals already?

Craig Hemke joins me to address the generally boring nature of markets broadly but especially for the metals. This time of the year has some people thinking it’s the summer doldrums. We discuss this concept as well as how the bond market could foretell future moves in precious metals.

Click here to visit Craig’s site – TF Metals Report.

Chris Vermeulen – The Technical Traders – Tue 7 Apr, 2020

Bonds and volatility balanced with the recent run in US markets

Chris Vermeulen joins me today to address the recent moves higher in US markets while also considering the drop in bonds and volatility. To wrap up the call Chris also shares his strategy for trading high volatility markets while reducing overall risk.

Click here to visit The Technical Traders website.

I recommend signing up for Chris’s free email list to keep up to date on his trades.

Weekend Show – Sat 29 Feb, 2020

Hour 1 – Recapping the worst week for investors since 2008
Full First Hour

This was a week for the history books. Markets started off poorly and things just got worse throughout the week. It was the worst week for US equities since 2008. This weakness extended to the safe havens a well with gold moving down almost $60 on Friday. Gold stocks were hammered as well.

As disappointing as the markets were this week I think you will all enjoy this first hour. Please keep in touch by emailing me at Fleck@kereport.com.

  • Segment 1 – Axel Merk, President and CIO of Merk Investments kicks off the show by sharing his outlook for US markets, yields, gold and the overall environment for investors.
  • Segment 2 – Trader Vic is back and he has some thoughts on the fall in markets and central bank comments from the week.
  • Segment 3 and 4 – Matt Geiger, Managing Partner at MJG Capital dives into the metals sector on the back of the huge selloff on Friday. With the indiscriminate selling of metals stocks we outline where to look when the stocks bottom.

Exclusive Company Updates From This Week

Axel Merk
Trader Vic Sperandeo
Matt Geiger

Chris Temple from The National Investor – Tue 25 Feb, 2020

An argument to build up cash in both risk on and risk off portfolios

As much as Chris’s odd couple trade has worked with bonds and gold moving higher he is now recommending building up a cash position to take advantage of some future better opportunities.

While we are working to get the media upload issue fixed here is a Dropbox link to the interview. The media file will open in a new tab.


Click here to visit Chris’s site and follow along with his newsletter.

Ed Moya – Senior Market Analyst at OANDA – Tue 25 Feb, 2020

The market follow through with a morning selloff – Plus a divergence in the safe havens

Ed Moya, Senior Market Analyst at OANDA kicks off today with a look at the US markets follow through on yesterday’s big down day. We also discuss the movements in bonds and gold where yields continue to fall but gold is giving back some of its gains from yesterday.

While we are working to get the media upload issue fixed here is a Dropbox link to the interview. The media file will open in a new tab.


Click here to visit the OANDA website and keep up to date with what Ed it writing.

Chris Temple from The National Investor – Mon 24 Feb, 2020

A Comprehensive Market Wrap – US Markets, the VIX, Gold, and Bonds

Chris Temple wraps up today for us with his thoughts on the big moves in US stocks, gold, bonds, and the VIX. One aspect of today to note is the fact that selling or buying did not pick up during the day. Most markets that we watch started the day either way up or way down and stayed in a relatively tight range throughout the day.

As Chris notes throughout the interview let’s see what the headlines bring for the rest of the week.

Click here to visit Chris’s site and follow along with his newsletter.

Dana Lyons Commentary – Thu 20 Feb, 2020

Buy the dip across the board remains the best strategy

Dana Lyons joins me today to share his continue buy the dip strategy for US markets, bonds and precious metals. With the over 300 point drop today in US markets that came out the blue Dana outlines how the drop presented a good short term buying opportunity. As for bonds and gold, those continue to head higher, and each dip should be bought.

Dana is also running a special at his Lyons Share Pro website. Click here to view the 33% off special.

John Rubino over at Dollar Collapse – Mon 17 Feb, 2020

A new look at what is considered a safe haven asset

John Rubino joins me on this holiday Monday in the US and Canada to discuss what assets investors are looking to for safety. With the US dollar, treasuries, gold, and US tech stocks all moving higher there is an argument to be made that US markets are being looked at as a safe haven investment.

Click here to visit John’s website – DollarCollapse.com.

The Great War of Stocks and Bonds

This post The Great War of Stocks and Bonds appeared first on Daily Reckoning.

Two options rise before us this day…

Option 1: The stock market is right. Option 2: The bond market is right.

The stock market is cheery and confident. It presently goes at record heights… and bursts with belief in a superior tomorrow.

Moreover, it has a decade of nearly unbroken prosperity in back of it.

The bond market — meantime — is dark, dour, down in the mouth.

Today the 10-year Treasury yields a slender 1.59%.

But not 1.5 years ago, in October 2018, it yielded 3.16%. In general…

The 10-year Treasury yield sinks when markets anticipate economic weather ahead, subdued inflation… and lower animal spirits.

A lean season is ahead then, the bond market struggles to say above the dinning stock market.

Two Irreconcilable Views

Pit the one against the other, stock versus bond. No compromise, no truce, can sink their differences. They are too vast.

As well ask the respective lords of heaven and hell to sign a treaty of peace…

As well ask Hatfield and McCoy to share a kiss…

As well ask the two poles of Earth to join at the equator.

That is, as well request the impossible.

As economist David Rosenberg styles it:

Both bonds and stocks can’t be right at this moment in time. We have to choose which asset class has the story right…

Which asset class has the story right — stock or bond?

We bring a prejudiced opinion to the proceedings, you say. That is, we bring a prejudiced opinion against the stock market.

Yet today we blindfold our eyes, hold the scales of justice even… and grant each side an impartial hearing.

The stock market rises to read its opening statement…

Why Shouldn’t the Stock Market Be Setting Records?

It insists the facts justify its optimism in full.

It reminds the court that unemployment scarcely has existence, that real wages are increasing, that January manufacturing jumped, that productivity is on its legs again.

The stock market is simply a mirror of these fabulous facts, it insists.

We must concede, the evidence produced has anchors in truth…

Unemployment hovers near record depths, at 3.6%. And 2019 witnessed America’s greatest productivity gains since 2009.

What is more, real hourly wages (inflation-adjusted, that is) expanded last year at the greatest rate since 2015.

Meantime, the Institute for Supply Management claims its January index of American factory activity came in at 50.9 — up from December’s 47.8.

Any number above 50 indicates a manufacturing expansion, a blossoming.

But the bond market thunders to its feet, and files a blistering objection…

Don’t be Fooled!

Take unemployment, the bond market argues.

Set aside the fact the United States Bureau of Labor is an agency of torture — that it twists, contorts, batters and gouges the numbers into false confessions.

Accept the 3.6% unemployment rate as truth, the bond market allows in generosity.

Unemployment sagged below 4% in April 2000, it reminds us — at the peak of the dot-com derangement.

The economy was in recession by March 2001… less than one year later.

And prior to April 2000, unemployment last hung below 4% in December 1969.

What followed?

The economy dropped into recession that same month… where it remained until November 1970.

Be not deceived then by today’s gaudy unemployment figure. It gives a false confidence, argues the bond market.

With the serenity of a card sharp with an ace card up its shirtsleeve, this market then summons a certain Nicole Smith to the witness stand…

Damning Testimony

Ms. Smith is chief economist at Georgetown University’s Center on Education and the Workforce.

Under examination she reveals:

If we look historically at other times when the unemployment rate has fallen below 4%, it’s times where it was the boom phase just before recession or just after a major war period…

It’s almost a precursor for a recession or a precursor for another slumping economy.

We steal a furtive glance at the stock market. It is sunken in its chair, beads of perspiration forming about its forehead. It reaches for a glass of water.

But to proceed…

Next we come to the alleged productivity surge.

Less Than Meets the Eye

The bond market will allow that United States productivity expanded 1.8% last year. Yet it is eager to remind the court…

That productivity still runs substantially beneath the 2.1% average prevailing since the Second World War.

And that the current expansion’s annual productivity gains average a marginally productive 1.3%.

The bond market demands to see more before budging from its skepticism.

And manufacturing?

It concedes the January index broke above the critical 50 threshold.

But it reminds us that manufacturing was in actual recession for all 2019 — all of it, January–December.

It will not permit a random lurch in the chart to fox it, to trick it. Once again, the bond market insists upon further evidence.

The Bond Market’s Star Witness

Finally the bond market calls upon its star witness: the yield curve.

As we have explained before…

The yield curve is simply the difference between short-term and long-term interest rates.

Long-term rates normally run higher than short-term rates. That is because the long-term future holds less certainty than the short-term future.

Investors, as a result, demand greater compensation to hold a 10-year Treasury than a 3-month Treasury.

The 10-year yield should therefore run substantially higher.

But when the 3-month yield and the 10-year yield begin to converge… the yield curve flattens.

And a flattening yield curve is a possible omen of lean times.

But the true menace is when the yield curve inverts — when long-term yields actually slip beneath short-term yields..

An inverted yield curve is a nearly perfect fortune teller of recession. An inverted yield curve has preceded recession on seven out of seven occasions 50 years running.

Only once did it yell wolf — in the mid-1960s. And the yield curve is giving off another alarm.

“The U.S. Yield Curve Is Flirting with Another Broad-based Inversion”

Reports Bloomberg:

The U.S. yield curve is flirting with another broad-based inversion, reigniting Wall Street fears over the fate of the American economy… After a respite early last week, the curve is once again flattening, with the spread between yields on 3-month and 10-year Treasuries inverting once more on Monday. This followed an earlier inversion starting Jan. 30 that was caused by growing angst about the coronavirus and an equity sell-off.

Yet an inverted yield curve is not necessarily an immediate scourge. History reveals its dire effects may not manifest for 12–18 months — or longer.

The curve has inverted at various periods over the past two years, incidentally.

But the bond market rests its case. In summation, it argues the stock market gives a dreadfully inaccurate reading of economic health.

“Never Before Has There Been such a Loose Relationship to Economic Growth”

It cites the aforesaid David Rosenberg:

Never before has there been such a loose relationship to economic growth… this is a stock market that is being driven by flows rather than by economic fundamentals.

At this point we recall Mr. Rosenberg’s previous statement:

Both bonds and stocks can’t be right at this moment in time. We have to choose which asset class has the story right…

And which asset class has the story right, in his estimate?

“History sides with the Treasury market.”

A Ruling

We are forced to agree.

The bond market will let you know where the economy is heading, say the veterans.

New York Times economics reporter Neil Irwin:

Savvy economic analysts have always known the bond market is the place to look for a real sense of where the economy is going, or at least where the smart money thinks it is going.

We must rule, therefore, in favor of the bond market. The coronavirus only reinforces our judgment.

The stock market will naturally appeal its case to a higher court.

And yes — we freely concede — it may even win…


Brian Maher
Managing editor, The Daily Reckoning

The post The Great War of Stocks and Bonds appeared first on Daily Reckoning.