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Features— TD on Gold, David Stockman, and A.I. Predictions
Markets— From Inflation to Disinflation
Zen Moment— Dog days
Week’s Analysis/Podcasts— Silver
Charts & Comments— Metals, Forex, Bonds, Commodities, FX
Technicals— GC, CL, BTC, S&P
Calendar— Powell Testifies 2x, LEI, PMI
Full Analysis— TD, Grants, Jefferies, Rabo
1. Features:
TD GETS UNABASHEDLY BULLISH
Last week Jerome Powell stated he would definitely be raising rates soon again, and that there would be no rate easing in the rest of 2023. The bank’s Head Commodity Strategist said the following in direct contrast afterwards:
We suspect that data and inflation will weaken in the not too distant future, with the Fed likely lowering rates before hitting its inflation target.
As such, we expect gold to do quite well in the months ahead.
TD Bank’s comments fly directly in the face of this. Their analysis pulls no punches saying:
The Fed will ease in 2023
They will ease *before* they get to their 2% inflation target
Gold will “do quite well”
For context: TD Bank’s trader is already long with a stop loss set around $1900 and he is *not* profitable yet.
We cannot deny the following: Gold was unchanged on a week in which the Fed said they will not be easing anytime soon, and inflation showed more easing signs. TD has a point.
We break down this very interesting take at bottom including the report…
GRANTS: DAVID STOCKMAN HAS HAD ENOUGH
“Folks,” Stockman continues, “you can’t borrow 7.3% of GDP every year from now until eternity and get away with it; and most especially not when American society is plunging into a 100 million strong baby-boom retirement wave—accompanied by a shrinking work force and tax base owing to collapsing birth rates and Washington’s idiotic migrant-worker internment camps at the southern border.”
Full David Stockman Excerpt At Bottom…
JEFFERIES TOP AI PREDICTIONS
Must read, short, thought provoking compendium piece (with access to much more) touching on everything that may happen in every key industry due to the AI effect.
In this piece we offer a compendium of [our] top 10 predictions on what the future of generative AI will mean for their individual universes. In addition, we offer the most compelling and consistent expected developments.
More At Bottom…
2. Market Summary
Very broadly speaking, and relative to each other, the top left does better in disinflation, the bottom right does better in inflation. This 6 month snapshot is indicating a belief in no dangerous recession, and/or a time horizon that feels the economy will be fine when the rate hikes are done
The S&P closed the week 2.6% higher the fifth consecutive weekly increase, its longest since Nov 2021.
Sectors/Technicals
Tech continued to do well, but rotation was clearly visible indicating broadening of the rally on deck
Basic materials rebounded on back of China’s latest stimulus announcement
Tesla had 13 its day up-streak finally broken
Healthcare insurance got pummeled by reports Americans are getting more procedures, insurance has to pay out on
Commodities:
Most commodities started moving lockstep higher mid day the 15th
WTI pushing back over $70 after hitting a one-month lower earlier this week
Gold and Silver ramped higher back to unch as well
Wheat finished very strongly
Natural Gas had a good week on the back of renewed EU fears
