Gold & Silver are Up Again: Jefferies Loves Miners
Buy Season is Here
Jefferies loves miners now.
Goldman discusses Powell’s speech
Market Rundown
Good morning. The dollar is down 50 bps. Bonds are on either side of unchanged. Stocks were slightly weaker overnight, but are now slightly positive up 10-30 bps. Gold is up $38 at 1798. Silver is up 63 cents at 22.41. Oil is up a dollar. Nat Gas is up 11 cents. Crypto is down small. Grains are also slightly lower. - 7:57a.m.
Why did stocks rally yesterday?
Yesterday's rally in the S&P 500 was catalyzed by 2 factors. Powell confirmed the Fed will be making smaller rate hikes at upcoming FOMC meetings. The other one was the beige book which noted improvements on both the labor and inflation fronts. Two caveats: Atlanta's GDP estimates are at 4%, and the cure for Powell's comments are a rally in stocks. Higher stock prices can cure themselves with a Hawkish Fed much more aggressively than in the past.
Big data day again. PCE will be the focus for inflation watching.
Here’s today’s data
THURSDAY, DEC. 1
8:30 am Initial jobless claims Nov. 26 230,000 240,000
8:30 am Continuing jobless claims Nov. 19 -- 1.55 million
8:30 am PCE price index Oct. -- 0.3%
8:30 am Core PCE price index Oct. 0.3% 0.5%
8:30 am PCE price index (year-on-year) Oct. -- 6.2%
8:30 am Core PCE price index (year-on-year) Oct. 5.0% 5.1%
8:30 am Real disposable income Oct. -- 0.0%
8:30 am Real consumer spending Oct. -- 0.3%
9:45 am S&P U.S. manufacturing PMI (final) Nov. -- 50.4
10 am ISM manufacturing index Nov. 50.0% 50.2%
10 am Construction spending Oct. 0.2% 0.2%
Varies Motor vehicle sales (SAAR) Nov. -- 14.9 million
November 30th: Jefferies Says Buy Miners
For the last 3 weeks we have been prepping subscribers for Gold’s Buy season recommendations. Over the last 2 weeks we have seen Goldman, then JPM, and then HSBC all come out and recommend buying Gold. Today we see Jefferies tell clients to buy miners. Buy season is in full swing. And for Jefferies, it’s not short term. Copper, Gold, and Silver are their focus
Our call is to build positions in mining shares now as we are approaching the bottom of the cycle. There will be volatility along the way as we navigate through the slowdown, and, if 2023 is like most other years, a significant (albeit temporary) pullback at some point is likely. But those who buy now and continue to add to long positions on periods of weakness should be well rewarded over time as mining is likely to materially outperform the market for several years