Morning Rundown | "Not This Time Gold"
Premium: on Iran, Gold, Oil, Copper, Aluminum
Housekeeping: There was much interest in the Oil data yesterday and we added several new Founders and some Premium subscribers. Thank you.
Market Rundown
Good Morning. Almost all prices should be taken with a lot of salt this early morning as markets are going to focus (too) heavily on the CPI number. Of the last 10 releases, 8 have come in above expectations. In fact the White House actually weighed in as if to get in front of a bad number. Keep in mind they did this with the Jobs number ( “It might be bad” they said) last week and were completely wrong. Best to ignore politicians on this ( and all other) type stuff.
The Dollar is unchanged. Stocks are slightly softer. Gold is down small. Bonds are slightly firmer. Oil and Copper are very strong perhaps reflecting interest out of Asia again. Crypto is mixed but holding yesterday’s gains. Grains are mixed.
Today’s data will cause the weakest hands to capitulate. So if there are a lot of nervous longs, they will sell first even if the number is bullish for the asset class. If there is a lot of money on the sidelines waiting for a dip, then a bullish number is rocket fuel. The opposite is also true. After the markets digest and settle down, perhaps the last half of the day will reflect some normalcy. Investors shouldn’t care. Traders shouldn’t be caught with pants down.
Not predicting, but a piece of equity research came across our desk yesterday. It implied to us and others that if there is reason to buy stocks today, there will be pain. Here is what we said to a colleague with big exposure in the space:
…that hedge funds paired their longs off near the lows last month by selling what they hate... so if we rally, they will push their shorts against themselves in an attempt to capture alpha... the problem is there is a lot less liquidity for leverage than there used to be….this can be kind of like the memestock rally
He didn’t disagree. So if there is a reason to buy stocks it could get weird. If Gold gets hit, watch the 1790-1775 area.
cheers
Premium Excerpt
GS:“While recent news has suggested an increased likelihood of the return to a JCPOA-like Iran nuclear deal this year, we don’t believe such a deal would derail our expectation for structurally higher oil prices.”
Gold technical brief report by TD: Not This Time Gold
***Attached beneath the fold***
Zen Moment
Have a good one
If you enjoyed this piece, please do us the HUGE favor of simply clicking the LIKE button!