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(Reuters) – U.S. stock index futures climbed on Monday as investors assessed the chances of a win by candidate Donald Trump in the November elections after President Joe Biden opted out of the race.Biden announced he was exiting the race on Sunday, and endorsed Vice President Kamala Harris for the Democratic ticket.Megacap stocks were up premarket, with Meta Platforms, Alphabet and Apple up between 0.5% and 0.8%, boosting the Nasdaq and S&P 500 futures.At 4:17 a.m. ET, Dow e-minis were up 54 points, or 0.13%, S&P 500 e-minis were up 18 points, or 0.32%, and Nasdaq 100 e-minis were up 102.5 points, or 0.52%.Shares of Trump-linked stocks such as Trump Media & Technology Group and software firm Phunware rose 2.8% and 1.4%, respectively.Most U.S. Treasury yields, including the 10-year one, were down as Biden ended his reelection campaign after pressure from fellow Democrats who lost faith in his mental acuity and ability to beat Trump.Biden’s exit from the presidential race could prompt investors to unwind trades betting that a Republican victory would increase U.S. fiscal and inflationary pressures, while some analysts said markets could benefit from an increased chance of divided government under the next administration.”Donald Trump is still the solid favorite to win the presidential election, but betting markets suggest he has a slightly lower probability of beating Harris rather than Biden,” said Paul Ashworth, chief North America economist at Capital Economics.”Harris will have a real chance to sell herself to the American public in the second presidential debate, currently scheduled for Sept. 10, although the Trump campaign could withdraw, not wanting to go toe-to-toe with the ex-attorney.”Investors are bracing for high volatility this week, with a deluge of quarterly earnings on deck, including from two of the so-called Magnificent Seven – Google parent Alphabet and Tesla – to gauge the sustainability of the recent run-up in the top-tier high-momentum stocks.Focus will also be on major data throughout the week including Personal Consumption Expenditures (PCE) price index data – the Federal Reserve’s preferred inflation gauge, durable goods and second-quarter GDP for clues on the U.S. central bank’s monetary policy trajectory.Traders have broadly priced in a 25-basis-point rate cut by September and two cuts by the year-end, as per LSEG and CME’s FedWatch data.Both the Nasdaq and the S&P 500 logged their steepest weekly declines since mid-April, with investors rotating out of expensive tech stocks to underperforming areas in the market, helping the small-cap Russell 2000 index post its second straight weekly gain.Among other single movers, Nvidia rose 1.3% after Reuters reported the AI chip leader is working on a version of its new flagship AI chips for the China market that would be compatible with current U.S. export controls.Shares of Bank of America lost 1.5% after Berkshire Hathaway sold about 33.9 million shares of the lender for around $1.48 billion over multiple transactions last week.(Reporting by Shubham Batra and Ankika Biswas in Bengaluru; Editing by Sherry Jacob-Phillips) Continue reading →

EC_HallexEquities have pulled back this week as rising realized and implied volatility have increased implied correlations. On July 12, the 1-month implied correlation index reached historic lows. Since then, the implied correlations have risen sharply but are still low by historical standards and are likely to rise more as we move through earnings season, and implied volatility levels rise as we move into the Presidential election. The equity market stretched itself too thin in too many places, and it didn’t take much for the trends to snap. Realized volatility fell too low, and it took a little movement in the equity market to cause this all to start to unwind. Volatility Rising As noted back on June 27, realized volatility levels were relatively low, and the ability for the S&P 500 (SP500) to continue to see small gains over a protracted period seemed unlikely. 30-day realized volatility hit a low of 6.97 on July 9 and 7.01 on July 12. The rule of 16 suggested that the S&P 500 could not rise more than 0.44 bps per day or risk realized volatility starting to climb. That was working fine, but that was right around the realized volatility bottomed because a nearly 4% rally between June 28 and July 16 started pushing realized volatility higher. Bloomberg The rise in realized volatility became a bigger problem when implied volatility also started rising, with one-month at-the-money implied volatility rising from around 10.10 to 12.5 from July 12 to July 18. This type of movement in implied volatility, at a time when the volatility dispersion trade was in full force, doesn’t work particularly well. Bloomberg Implied Correlations Rising Implied correlations increase when the implied volatility for single stocks and the S&P 500 rises simultaneously, which has been happening for the last few days. Bloomberg The issue is that next week’s earnings season is in full view, with Alphabet (GOOG) (GOOGL) and Tesla (TSLA) reporting results. Once those companies report results, implied volatility for those stocks will crash, as they always do post results. This means that even if implied volatility in the S&P 500 index comes down, implied correlations may not, because falling implied volatility in stocks and the S&P 500 index means implied volatility is becoming more correlated. The stock market is in a tough spot currently because when implied correlations start to rise, it typically follows an equity market that is moving lower, which is precisely what is happening now. Bloomberg Problems The same event happened last year, and it led to the index declining by around 10%. Now, this year is different, with a new set of problems. The biggest concern is that the S&P 500 trades at a much higher valuation. In July 2023, the S&P 500 peaked at 19 times 2024 earnings estimates; this year, it is trading at 20.0 times 2025 earnings estimates. So stocks are pricier on a 1-year forward basis. Bloomberg Additionally, it is an election year, and we typically see higher implied volatility overall in an election year. This year’s S&P VIX Index (VIX) has been tracking lower than the presidential election years, starting in 1996 and continuing through 2020, excluding 2008. That has changed some with the recent move higher, but seasonally, it would suggest that implied volatility is likely to move higher between now and the election. Bloomberg This probably means that over the coming months, we will likely see realized and implied volatility continue to move higher, pushing implied correlations higher, which will most likely send the S&P 500 lower. Because mechanically, that is how this trade typically works. It appears to be another instance of flying too close to the sun; now, as the wings melt, gravity seems poised to take over. Continue reading →

Daniel GrizeljPolitical and geopolitical risks are escalating, challenging developed markets and creating potential opportunities for emerging markets debt investors. The VanEck Emerging Markets Bond Fund (EMBAX) gained 0.15% in June, compared to a 1.11% loss for its benchmark, the 50% J.P. Morgan Government Bond Index-Emerging Markets (GBI-EM) Global Diversified and 50% J.P. Morgan Emerging Markets Bond Index (EMBI). Year to date, the Fund is up 0.55%, compared to -0.72% for its benchmark (and compared to global developed market (DM) bonds, as measured by the Bloomberg Global Aggregate Index which was down 3.3% and U.S. 10-year Treasuries which fell by 2.0%). The decades-old story of emerging markets (EM) bonds outperforming DM continued in the first half of the year. During June, the Fund increased local currency exposure in Mexico. Initially, the Fund had a significant underweight in Mexico’s local currency, but established a long position after the market was crushed by the country’s June election outcome. The Fund was also significantly underweight Brazil local, which also fell sharply in June. We are currently exploring a potential tactical long position in Brazil local currency debt. We continue to favor duration as well as selected emerging markets currencies (EMFX), now including many of the high-betas (South Africa, Colombia, Hungary, Chile) following their weakness (Mexico, Brazil). Carry is 7.4%, yield to worst is 8.9%, duration is 6.8 and local makes up around 53% of exposure. Exhibit 1 shows EM bonds continued outperformance of DM bonds in 2024 as well as over the past 7 years (in earlier pieces we take these tables back decades and get the same result, and we’ve done volatility-adjusted research pieces, too, of course). The exhibit also highlights that an active approach like ours can boost returns over that of the EM benchmark (which has consistently beaten DM bonds). Exhibit 1 – EM Continues to Outshine DM Bonds As of June 30, 2024 1H’24 2023 2022 2021 2020 2019 2018 2017 7 Years VanEck Emerging Markets Bond Fund I 0.55 10.97 -7.22 -4.30 11.60 13.10 -6.21 11.96 2.92 50%JPM GBI-EM GD and 50%JPM EMBI GD -0.72 11.92 -14.75 -5.32 4.02 14.31 -5.15 12.74 0.75 Bloomberg Global Aggregate TR USD -3.16 5.72 -16.25 -4.71 9.20 6.84 -1.20 7.39 -0.45 ICE BofA Gbl Brd Mkt TR USD -3.32 5.56 -16.87 -5.24 8.94 6.85 -1.09 6.95 -0.72 FTSE Treasury Benchmark 10 Yr USD -1.99 3.54 -16.65 -3.51 10.37 8.85 -0.02 2.13 -0.28 Click to enlarge Average Annual Total Returns* (%) (In USD) Month End as of June 30, 2024 1 MO 3 MO YTD 1 YR 3 YR 5 YR 10 YR Class A: NAV (Inception 07/09/12) 0.26 0.52 0.22 4.94 -0.76 2.28 0.88 Class A: Maximum 5.75% load -5.51 -5.26 -5.54 -1.10 -2.70 1.08 0.29 Class I: NAV (Inception 07/09/12) 0.43 0.58 0.55 5.26 -0.40 2.60 1.21 Class Y: NAV (Inception 07/09/12) 0.19 0.45 0.40 5.03 -0.51 2.51 1.12 50% GBI-EM/50% EMBI -0.23 -0.66 -0.72 4.91 -2.88 -0.61 0.91 Click to enlarge * Returns less than one year are not annualized. Expenses: Class A: Gross 2.55%, Net 1.22%; Class I: Gross 2.51%, Net 0.87%; Class Y: Gross 2.91%, Net 0.97%. Expenses are capped contractually until 05/01/24 at 1.25% for Class A, 0.95% for Class I, 1.00% for Class Y. Caps excluding acquired fund fees and expenses, interest, trading, dividends, and interest payments of securities sold short, taxes, and extraordinary expenses. The performance data quoted represents past performance. Past performance is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Please call 800.826.2333 or visit vaneck.com for performance current to the most recent month ended. Click to enlarge The “Net Asset Value” (NAV) of a Fund is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Investors should not expect to buy or sell shares at NAV. U.S. political risk is beginning to drive U.S. rates, whereas EM always pays a risk premium for perceived political risk. The U.S. yield curve steepened after a recent boost to former President Trump’s re-election prospects. The important observation is that political and policy risks are continuing to drive asset prices in the developed markets, to now including the U.S. Also, we believe this recent bear steepening reaction is not correct. This bear steepening reaction to former President Trump’s improved election prospects is supposed to be due to likely fiscal stimulus or heightened concern. We worry that too much of market participants’ reactions are not focused purely on policy. Let’s look only at economic policy, positing trade, fiscal, monetary, and structural policy as the key elements. We “table” it out below, as we remain stunned by how unwilling many market participants are to engage with political facts, whether welcomed or not. Our conclusion is that on trade, fiscal, and monetary policy, both Trump and President Biden are equally “market friendly” (or unfriendly), with Trump maybe having an edge, (but we rate the difference ‘Meh’). Structural policy (i.e., taxation and regulation) is where the key differences are, with a Trump de-regulation effort obviously holding the prospect of boosting productivity and growth. And, supply-side economic thinking would also note that higher growth is the easier answer to any fiscal issues, maybe upgrading Trump’s grade. The big problem is – so what if this is true? We won’t list the ongoing risks as we head to U.S. elections in November, but we think the market needs to actually get through all of these before it looks dispassionately at policy…and we agree, it’s too early to look through the election itself. So, if the politics are still up in the air and too far away, what does that leave us with? It leaves us with data-dependency. And the data are clearly weakening, as Fed Chair Powell noted during his Sintra comments in early July. So, we’ll continue to defer to the data, which we think will have the Fed cutting in September or November. But we’ll be respectful of price action, as there are clearly binary views on politics at least, if not on policy. What happens after that (likely recession fears and fiscal fears as a result), is still too early for the market to discount, in our view. One step at a time, but we are not covering our eyes. Exhibit 2 – Economic Policy Over Politics: Trump or Biden “Market Friendly”? Biden or Trump the “Market Friendly” Winner? Comment/Implication Trade Policy Meh Who can be more anti-China is the new political game Fiscal Policy Meh/Trump Trump’s fiscal boost was during Covid, Biden’s during post-Covid expansion, arguably making Trump better on Fiscal Monetary Policy Meh/Trump Biden’s Fed appointments have not been inflation hawks Structural Policy Trump De-regulation and tax cuts boost productivity/growth and encourage capital inflows…but this is after an uncertain election and quarters away Click to enlarge Political risks in DM are bigger than those in EM. French snap elections raise the prospect of a divided government that will likely resurrect fiscal concerns to a highly indebted sovereign in a eurozone currency union that escaped its crises about a decade ago without fixing its core deficiencies. Comments from Germany’s finance minister questioning potential ECB support for the French bond market underscore the risks in France. For what it’s worth, your author is French-born and has worked as a security-cleared U.S. official in Paris, during the country’s last cohabitation government (the only claim is of comfort and experience, not certitude). That DM situation is more fraught than hyped political risk in Mexico and South Africa, in our view. Probably self-evidently. Just to get one basic economic fact out of the way – Mexico and South Africa have floating exchange rates with independent central banks, and most of their debt is in their own currency. That can’t be said of France is basic, so please don’t forget it. (And don’t forget that the currency union is still not backed by a fiscal or financial union.) A floating exchange-rate absorbs these problems, and recently looks like it did so in Mexico (where we owned none, but bought after the natural and healthy financial market reaction). This is not an existential moment for Mexico, where the incoming government has already committed to orthodox fiscal targets and appointed an excellent finance minister. Mexico was just crowded and mispriced, but it’s not on the edge of an abyss. In South Africa the story is easier. Financial news made the initial headline the ANC’s loss of its 50% majority, when in reality market professionals were only debating a range of 39%-41%. Anyway, the reality was always going to be a coalition government, and the market got its dream outcome of an ANC alliance (through a Government of National Unity) with the very market-friendly DA. This is simply a good outcome (whatever the country’s longer-term prospects). The story is easier because the South African rand is actually up against the US Dollar year to date. Exhibit 3 – France: Another DM to Worry About That Isn’t Japan or U.S. Source: Bloomberg. As of July 3, 2024. Geopolitical risks continue, challenging DM but creating opportunities for EM. Ongoing supply risks support commodity prices. And central banks continue to diversify their reserve assets to include safe EMs with high real rates, sustainable fiscal, and no sanctions risk (central banks aren’t only replacing U.S. treasuries with gold). None of this is new. We will repeat two things. First, the correct lens for the two hot geopolitical conflicts in Europe is NATO vs. Russia (not Ukraine vs. Russia) and Israel vs. Iran vs. Turkey (not Israel vs. Hamas or Hezbollah); you have to look at the right “thing”, and these “things” are escalating. Second, an “obvious to us” scenario that seems to get no attention is that in the NATO vs. Russia conflict, Odessa is now likely “in play”. Given the absence of any peaceful solutions (the Swiss peace conference and following G7 meeting were about broadening sanctions against those with links to Russia), Russia is likely to table its latest offer of freezing the current conflict and resume its grind westward. This will likely remind markets of geopolitical risks, particularly given the importance of Odessa to grain exports (Odessa is Ukraine’s main port along with Mykolaiv. Just look at Odessa on the map below. We think an Odessa that escapes the conflict is likely faded. Exhibit 4 – Odessa Exposure Types and Significant Changes The changes to our top positions are summarized below. Our largest positions in June were South Africa, Thailand, China, Indonesia, and Poland: We increased our local currency exposure in Poland and Hungary. Poland remains the cleanest disinflation and policy story in Central Europe with potential growth upside. These factors improved the policy and economic test scores for the country. Hungary’s central bank is slowing the pace of rate cuts, while Europe’s growth outlook is improving relative to the U.S. In terms of our investment process, this strengthened Hungary’s policy and technical test scores. We also increased our local currency exposure in Mexico and South Africa, and hard currency sovereign exposure in South Africa. The market’s initial interpretation of the election results was extremely negative. This view was challenged by the subsequent moves of President-elect Sheinbaum, including the new cabinet’s technocratic lineup and Sheinbaum’s commitment to sharp fiscal consolidation. Further, given that the pre-election positioning was predominantly long, Mexico’s local rates and the currency sold off a lot after the elections significantly improving valuations. In terms of our investment process, this improved the policy and technical test scores for the country. South Africa’s post-election journey was somewhat similar, with the market taking some time to warm up to the idea of the government of national unity (and the continuation of reforms and fiscal discipline). Once this happened, local rates and the currency staged a rally, explaining a big part of the increase in our exposure. These developments improved South Africa’s policy test scores. Finally, we increased our hard currency sovereign exposure in Qatar, the United Arab Emirates, and Saudi Arabia. The key argument here is that longer duration should do better with the softening U.S. growth outlook. In terms of our investment process, this improved the technical test score for these countries. We reduced our local currency exposure in Brazil and Chile, and hard currency sovereign exposure in Argentina. The key concern in Brazil is growing uncertainty about the pace of fiscal consolidation and the new governor of the central bank, who might be more inclined to follow President Lula’s pro-growth policy “suggestions”. This resulted in the worsening policy test score for the country. Chile might be affected by China’s slow recovery progress and limited policy follow-through after big initial statements, which poses risks to copper prices. Further, the narrowing policy differential with the U.S. if the central bank continues to cut rates can put more pressure on the currency. In terms of our investment process, this worsened the policy and technical test scores for the country. We took profits in Argentina, as the policy momentum is stalling – especially the approval of the watered-down omnibus bill and the central bank’s failure to capitalize on good harvest and boost international reserves. These factors worsened the policy test score for Argentina. We also reduced our hard currency sovereign exposure in Nigeria, Suriname, and Ghana. We took profits in Nigeria, as the government is figuring out how to proceed with policy adjustment and reforms. The key concern in Suriname is domestic politics, which might get noisy in the runup to the presidential elections. We also see limited upside in Ghana in the run-up to the elections. In terms of our investment process, this worsened the policy test scores for these countries. Finally, we reduced our local currency exposure in Peru and hard currency quasi-sovereign exposure in Singapore. We used these positions as funders for other more interesting opportunities. Peru might be affected by a slow pace of China’s recovery (which might weight on copper prices), and the narrowing policy rate differential with the U.S. In addition, there is a risk of contagion from the “bad LATAM” regional story. These factors worsened the technical test score for the country. Disclosures This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements, which do not reflect actual results, are for illustrative purposes only, are valid as of the date of this communication, and are subject to change without notice. Actual future performance of any assets or industries mentioned are unknown. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of third party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck or its other employees. Duration measures a bond’s sensitivity to interest rate changes that reflects the change in a bond’s price given a change in yield. This duration measure is appropriate for bonds with embedded options. Carry is the benefit or cost for owning an asset. Yield to worst is a measure of the lowest possible yield that can be received on a bond with an early retirement provision. Averages are market weighted. The yields presented do not represent the performance of the Fund. These statistics do not take into account fees and expenses associated with investments of the Fund. All indices are unmanaged and include the reinvestment of all dividends, but do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. Certain indices may take into account withholding taxes. An index’s performance is not illustrative of the Fund’s performance. Indices are not securities in which investments can be made. The Fund’s benchmark index (50% GBI-EM/50% EMBI) is a blended index consisting of 50% J.P. Morgan Government Bond Index-Emerging Markets (GBI-EM) Global Diversified and 50% J.P. Morgan Emerging Markets Bond Index (EMBI). The J.P. Morgan GBI-EM Global Diversified tracks local currency bonds issued by Emerging Markets governments. The J.P. Morgan EMBI Global Diversified tracks returns for actively traded external debt instruments in emerging markets, and is also J.P. Morgan’s most liquid U.S. dollar emerging markets debt benchmark. The Bloomberg Global Aggregate Index measures the performance of global investment grade fixed income securities. The FTSE Treasury Benchmark 10 year measures the return of the 10 year U.S. Treasury. ICE BofA Global Broad Market Index tracks the performance of investment grade debt publicly issued in the major domestic and eurobond markets, including sovereign, quasi-government, corporate, securitized and collateralized securities. Information has been obtained from sources believed to be reliable but J.P. Morgan does not warrant its completeness or accuracy. The Index is used with permission. The index may not be copied, used or distributed without J.P. Morgan’s written approval. Copyright 2024, J.P. Morgan Chase & Co. All rights reserved. You can lose money by investing in the Fund. Any investment in the Fund should be part of an overall investment program, not a complete program. The Fund is subject to risks which may include, but are not limited to, risks associated with active management, credit, credit-linked notes, currency management strategies, derivatives, emerging market issuers, energy sector, ESG investing strategy, foreign currency, foreign securities, hedging, high portfolio turnover, high yield securities, interest rate, market, non-diversified, operational, restricted securities, investing in other funds, sovereign bond, and special risks considerations of investing in African, Asian and Latin American issuers, all of which may adversely affect the Fund. Emerging market issuers and foreign securities may be subject to securities markets, political and economic, investment and repatriation restrictions, different rules and regulations, less publicly available financial information, foreign currency and exchange rates, operational and settlement, and corporate and securities laws risks. Derivatives may involve certain costs and risks such as liquidity, interest rate, and the risk that a position could not be closed when most advantageous. ESG integration is the practice of incorporating material environmental, social and governance (ESG) information or insights alongside traditional measures into the investment decision process to improve long term financial outcomes of portfolios. Unless otherwise stated within an active investment strategy’s investment objective, inclusion of this statement does not imply that an active investment strategy has an ESG-aligned investment objective, but rather describes how ESG information may be integrated into the overall investment process. Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Securities Corporation. © 2024 Van Eck Securities Corporation, Distributor, a wholly-owned subsidiary of Van Eck Associates Corporation. Original Post Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors. Continue reading →

Gold is one of the most reliable and accurate financial measures one can use. Historically, the Dow/gold ratio has provided a very good signal for silver bear and bull market cycles

Here is a long-term silver chart compared to a long-term Dow/gold ratio chart:

On the silver chart (the top chart), I’ve highlighted the significant Dow/gold ratio peaks with a blue line. In every case, silver made a significant bottom some years after the Dow/gold ratio peak. These were signals for the (then coming) silver bull market.

Once in the bull market, significant silver peaks occurred within 8.5 years, as measured from the Dow/gold ratio peak (marked in red), with the Great Depression silver peak occurring the soonest (6 to 7 years after).

In October of this year, it will be 6 years since the Dow/gold ratio peak. That’s when we’ll be entering a phase where an interim peak becomes probable, but not before some big rallies manifest.

The takeaway from this should be that we are close to a period where massive (sustained) silver rallies will likely occur, seeing that the best rallies are often near the peaks and that silver actually rallied on a sustained basis for at least 2 years before each of those peaks.

Each of the silver peaks (indicated) was nearer the bottom of the Dow/gold ratio. The current level of the ratio is still closer to the 2018 peak, so it still has some way to go. Again, this means that the best rallies are still ahead.

This is even more interesting (not always in a good way) when considering that we are probably very close to monetary reform:

Warm regards

Hubert Moolman

For more of this kind of analysis, subscribe to my Premium Service. I also have a Silver Fractal Analysis Report that provides more insight regarding silver market.
Hubert Moolman is an independent gold and silver analyst who specializes in fractal analysis and the fundamentals of gold and silver . Hubert is the owner of HGM and Associates and HGM Research. Hubert’s work is regularly published in the premier gold and silver publications such as: Kitco.com, GoldSeek.com, SilverSeek.com, Mineweb.com, Resourceinvestor.com, Seekingalpha.com and many more.

Investment Research Services – Gold and Silver Research

HGM Research provides a world-class research service, covering the Gold and Silver markets, JSE Gold Miners, HUI and other selected markets. We offer a free newsletter as well as a premium (pay per article service) covering the above financial markets. We are known for our proprietary Fractal Chart Analysis. Our Fractal Analysis helps us to identify great investment opportunities. We would also consider requests for research, covering specific companies traded on a public listed exchange or research of specific global or local indices.

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An employee handles one kilogram gold bullions at the YLG Bullion International Co. headquarters in Bangkok, Thailand, on Friday, Dec. 22, 2023. 
Chalinee Thirasupa | Bloomberg | Getty Images

Gold prices advanced Tuesday, on track for a record close as rising expectations of a September interest rate cut bolstered demand for bullion.
Spot gold gained 0.7% to $2,438.83 per ounce. Gold futures advanced 0.6% to $2,443.80. Earlier in the day, futures hit a high of $2,448.2, the best level since May 20 when it traded for as much as $2,454.20.

Gold prices hit all-time highs earlier this year before pulling back as the prospect of higher-for-longer interest rates dampened investor enthusiasm for the precious metal.
But interest in the asset has grown after June’s softer inflation data and some recently dovish comments from Federal Reserve Chair Jerome Powell combined to raise the odds of rate cuts coming this year. Markets are pricing in three quarter-percentage point cut coming this year, with the first slated for September, according to the CME FedWatch Tool, which uses 30-day fed funds futures to find probabilities.
A weakening dollar has also supported demand for bullion. On Tuesday, the U.S. greenback rebounded after falling to a five-week low.
“Interest to ‘buy-the-dip’ remained prevalent among investors amid strong sentiment towards gold, which is likely why the market was quick to rally on soft U.S. data prints and dovish Fed expectations,” UBS’ strategist Joni Teves said in a note on Friday.
“With the market sitting just above the psychological $2400 level, we think risks are skewed to the upside,” Teves continued. “We think positioning remains lean and there’s space for investors to build gold exposure.”

Gold rallied to record highs in the first half of 2024 on the back of a multi-year spike in demand from central banks around the world, as mounting global geopolitical risks boosted interest in the safe haven asset. According to UBS, central bank buying of bullion is the highest it’s been since the late 1960s.
“With some central banks now questioning the safety of holding USD- and EUR-denominated assets (following the financial and debt crises and more recently the war in Ukraine), many are choosing to instead fill their reserves with gold,” read a note last month from UBS.
On the flip side, gold has also come under pressure from lackluster Chinese demand. In a recent note, Citi said China central bank and retail consumption of gold is expected to remain weak over the summer, but noted “underlying strength” in demand amid a slow recovery in the China real estate market.
Gold mining stocks also advanced on Tuesday. The VanEck Gold Miners ETF gained 1.2% in the premarket, on pace for a fifth winning day in six. The U.S.-listed shares of Harmony Gold and Gold Fields rose 6% and 4%, respectively. The U.S. listed shares of DRDGold popped more than 5%. Continue reading →

Former President Trump officially won the GOP nomination with his vice presidential pick, Sen. JD Vance, in tow.The Republican senator from Ohio, a former Marine, private equity alum and author of a bestseller-turned-Netflix special, received the nod on Monday, two days after the former president narrowly escaped an assassination attempt during a rally in Pennsylvania.”Prior to this horrific event, the markets were already sniffing out, subsequent to the debate, a Trump victory. Now, investors are sniffing out a what? A ‘red sweep,'” said Jason Katz, UBS managing director and senior portfolio manager, on “Varney & Co.,” predicting what could unfold should the GOP ticket win the White House. “The tax laws of 2017 become permanent, maybe you get additional tax cuts. You will have much less erroneous regulations; we could see a very big pickup in M&A activity,” he detailed.ELON MUSK HAILS JD VANCE, TRUMP’S VP PICKSen. JD Vance and wife Usha Chilukuri Vance celebrate as he is nominated to be Donald Trump’s vice president on the first day of the Republican National Convention at Fiserv Forum in Milwaukee on July 15, 2024.FED’S POWELL CONDEMNS TRUMP ASSASSINATION ATTEMPT: A ‘SAD DAY FOR OUR COUNTRY’The Dow Jones Industrial Average closed firmly above 40,000 on Monday, a new record high, up 6.7% this year, with the S&P 500 just shy of its all-time high, up 18% this year. The tech-heavy Nasdaq Composite has gained 23%, closing just below its record high reached this month.READ ON THE FOX BUSINESS APPWith the Republican National Convention underway, investors will be listening for details on whether the GOP’s policy platform can keep the momentum for equities going.LIVE UPDATES FROM THE RNCAt a recent “How will the Election Impact the Markets?” Ameriprise virtual roundtable in late June, attended by FOX Business, Anthony Saglimbene, chief market strategist at Ameriprise Financial, said investors may be subject to more volatility through November.”As the markets start to discount not only who sits in the White House but where control of Congress lies, that could create a period of volatility. But what we generally see historically is that no matter how the results shake out, volatility ebbs back to more normalized levels post-election day,” he noted, and then investors turn back to fundamentals. “The level of interest rates, growth and corporate profits, and obviously the trajectory for monetary policy, these are the four things that generally drive the markets,” he said.Republican presidential candidate Donald Trump is rushed offstage during a rally on July 13, 2024, in Butler, Pennsylvania.The team was not available to comment on whether there will be any market or election impact after the assassination attempt on Trump over the weekend.FED DOESN’T NEED TO WAIT ON RATE CUTSOutside the upcoming election, tailwinds for the economy are emerging. On Monday, Federal Reserve Chair Jerome Powell said policymakers are seeing positive inflation data and don’t necessarily need to sit idle for inflation to hit their preferred target rate.Federal Reserve Bank Chair Jerome Powell”The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long because the tightening that you’re doing, or the level of tightness that you have, is still having effects, which will probably drive inflation below 2%,” Powell told attendees at the Economic Club of Washington, D.C.The consumer price index fell 0.1% in June vs. May, the first monthly drop since May 2020. Still, year-over-year prices remain elevated at 3%.Currently, 89% of market participants are pricing in a September rate cut, according to the CME’s FedWatch Tool, which gauges rate moves. No action is predicted at the July meeting.Russell Price, chief economist at Ameriprise, expects one rate cut in September and another in December but says the health of the U.S. consumer is a bigger driver of the economy.”What’s really most important is consumers. Consumer spending has eased a little bit. In my mind, consumers are still doing just fine. But they have gone a little bit long in the tooth when it comes to the amount of spending they did on goods a few years ago and more recently on services, particularly on travel and vacations and the like. But generally, consumers, though, are [in] good financial shape,” he noted.Original article source: Trump, JD Vance and stock market momentum: Here’s why Continue reading →

LilliDayIntro Analysts have been expecting a recession for years now, but the S&P 500 (NYSEARCA:SPY) does not care and continues to rise. During 2024 it recorded new all-time highs several times, and those who waited for a crash to invest in it probably regretted not doing so earlier. Those who sold in panic I hope have realized that it always pays to stay invested, even if everyone expects a new 1929 soon. At the end of 2023 I wrote an article on the 2024 of S&P 500 where I showed my optimism for the first half of the year, thanks to the AI hype, but I underestimated the magnitude of this trend. I expected a new all-time high but not that it would touch $5,600; never did I think Meta would grow an additional 50% in a few months and Nvidia by 160%. It was a pleasant surprise for my portfolio, but I think it is time to question the sustainability of this growth. Obviously, I will continue with my buy & hold strategy no matter what, but the concerns I had at the end of 2023 are gradually materializing and may halt the growth of the S&P 500. In the second half of 2024, I expect there will be many more challenges to overcome than in the first 6 months, as interest rates are only now really hitting the economy. Empirically, the consequences of a rate hike have been shown to have a lagging effect of about 12 to 18 months on the economy, and we are only now experiencing them in full. My S&P 500 price target for late 2024 was only $3,600, a highly improbable figure after such a strong rise in big tech companies. In any case, I would not rule out a good portion of the gains made so far being wiped out. In my opinion, it is necessary for the Fed to start cutting rates as early as the next meeting, otherwise an economic slowdown/recession at the end of the year is inevitable, which is something I already anticipated in my previous article. I would like to emphasize again that this article is not intended to spread panic and entice you to take profits on the best performing companies; just take it as food for thought. As I have previously mentioned, my view about the investment world is totally different from doing market timing. I think it is always worth staying invested and taking advantage of slumps to invest more, as long as you have chosen the right companies, of course. The economy is beginning to creak High interest rates are beginning to hurt the economy, particularly the labor market. No one doubts its current resilience. In fact, the unemployment rate is only 4.10%, but there are signs that do not bode well for the coming months. Investing.com First of all, from April onward there has been a slow but steady deterioration. Among other things, for three months in a row, analysts’ estimates have been too optimistic. In general, we cannot criticize the current level of unemployment, but at the same time we cannot base our analysis of the labor market solely on it. First of all, because it is a lagging indicator, so it does not give us any information about the future, and secondly, its volatility can change drastically depending on the macroeconomic environment we are in. Let me give you a real-life example to make my point. In June 2008, the unemployment rate was 5.60%, and no one expected it to rise much higher, not even the FOMC. Federal Reserve The expected range for the 2008 unemployment rate was between 5.50% and 5.80%, in 2009 between 5.20% and 6.10%. At the end of 2008, the unemployment rate rose to 7.30%, yet the estimates had been made a few months earlier. In just 6 months, the situation changed dramatically, but the biggest error concerns the estimate for 2009: the unemployment rate at the end of the year reached 9.90%. In light of these considerations, it seems clear that the unemployment rate is not suitable for understanding the future of the labor market, and therefore not useful in our investment theses. It gives us information about the past, but we are interested in the future. What can help us instead is the Sahm Rule Recession Indicator, created by the macroeconomist of the same name, Claudia Sahm. Often, to predict a recession, we look at the inversion of the yield curve, but this other indicator has also proven flawless at predicting all recessions since the 1970s. But how does it work? The rule is very simple and involves relating the value of the current three-month moving average unemployment rate to the value of the lowest three-month moving average unemployment rate over the past 12 months. In other words, it seeks to show an abnormal increase in the unemployment rate compared with what has been recorded over the past year. Its purpose is thus to predict whether the unemployment rate is about to shoot up, much more than the market might expect. Federal Reserve Bank of St. Louis Every time the indicator has exceeded the 0.50 threshold there has been a recession; today we are at 0.43 and the figure is rather worrying since it is steadily worsening. Of course, the Sahm Rule is not law, so it could be wrong, but I, personally, rely on it a lot. After all, I have no reason to think that this time is different. It is not certain that we will touch 0.50 in a few months, but at the same time I wonder why there has to be an improvement. Interest rates are still very high, and the Fed, unlike other central banks, remains quite reluctant to reduce them. It wants to make sure 100% that inflation has been defeated, which is agreeable, but economics is not a certain science and historically, the timing of central banks has never been perfect. I would like to point out that I don’t think it is their fault, recessions are part of the business cycle and will always be there. An economy cannot grow all the time, and surely a mild recession is better than out-of-control inflation. The point is that the magnitude of the recession cannot be known in advance, and keeping rates high even though inflation is falling may prove to be the wrong choice. Right now, no one knows for sure what the right choice is; my view is that rates should be cut by 25 basis points as early as the next meeting, so one cut in 2024 is not enough. Only in a few years will we know whether the Fed has made the right choice, and at that point it will be very easy to judge. Returning to the analysis of the labor market, there are other signs that puzzle me. Federal Reserve Bank of St. Louis Federal Reserve Bank of St. Louis Since the pandemic, both full-time and part-time jobs have achieved significant increases, however, since January 2023, full-time jobs have halted their run. They are even declining from the end of 2023. In other words, employers are beginning to prefer part-time rather than full-time hires. This could be due to less demand for their products/services, and therefore it is no longer necessary to have as many full-time employees. In addition, another interesting data point is that of continued claims. Federal Reserve Bank of St. Louis More and more people are struggling to find new employment, and while the current figure is not alarming, there has been a rather rapid deterioration since late April 2024. This is something that needs to be monitored, not least because as long as rates remain high, I see no reason why continued claims should improve. Overall, the labor market data are not positive, and for the first time in several years (with the exception of the pandemic) we can see the first cracks. In any case, I would like to emphasize that I do not think we are facing a new 2008, it would not make sense to make this kind of analogy. Every recession is different, although there are common features. The motivations behind the 2008 crisis are different from those that might trigger a recession in late 2024-early 2025. To some extent, one aspect that perhaps can connect them might be people’s inability to meet their loans on credit cards. Federal Reserve Bank of St. Louis Until 2021, delinquency rates were at historic lows, but since rates were raised, there has been a rather steep increase. While current levels are not too different from the historical average, what is worrying is that this upward trend has never stopped. In other aspects, such as the inability of households to pay their mortgages, we are on two totally different tracks. Federal Reserve Bank of St. Louis U.S. households have never shown a sign of weakness in recent years and delinquency rates have declined quarter by quarter. Finally, to conclude the topic on the impact of high interest rates on the economy, I must mention the GDP growth estimates for Q2 2024. Federal Reserve Bank of Atlanta Real GDP is expected to grow by 2% in Q2 2024, a positive figure but halved from just a few months ago. In a very short time frame, expectations have deteriorated radically, but we still cannot call it an economic contraction. Basically, the economy remains solid, but high interest rates are hurting the expectations for future growth, yet the S&P 500 is not discounting any of this. TradingView The index continues to record new all-time highs, driven mainly by the most influential tech companies active in artificial intelligence. As much as this pleases me (Meta is the top position in my portfolio), I believe that sooner or later, investors will have to do a reality check, since this upward trend cannot be sustainable. The market is just waiting for the first-rate cut to feed the bull market, which is quite controversial since a recession has always followed the pivot in the past decades. If we based on what has happened in the past, we should hope that it will never happen. @kurtsaltrichter X profile In any case, it should be made clear that it is not the first-rate cut that triggers a recession, but the wrong timing with which it occurs. Theoretically, rates should be cut gradually, but it almost always ends up with panic cutting, as happened both during the early 2000s and during the Great Financial Crisis. TradingView To date, the market is discounting only one cut of about 25 basis points by the end of 2024, too little in my view to curb the continued deterioration of the labor market. Moreover, with the S&P 500 making all-time highs every week, it is clear that much of the investor base is discounting a future scenario in which the Fed will succeed in fighting inflation without triggering a recession. As much as I might hope that this is the case, the track record of the past few decades tells an entirely different story. In other words, I think the market is not considering at all the option that something could go wrong, and that is what worries me. What has sustained the U.S. economy to date Since the Fed raised rates, the word recession was in many more articles/journals. High rates coupled with the end of QE looked as if it might deal the death blow to the S&P 500’s climb, but actually, it did not. Excluding a brief pessimistic interlude that ended in late 2022, and the flash crash of March 2020, investors have not experienced a real bear market since 2008. Yet, the conditions for it to happen were there. The reason the most anticipated recession of all time never happened is because expansionary fiscal policy was able to offset the Fed’s restrictive moves. Federal Reserve Bank of St. Louis Thus, even though the Fed Funds Rate has exceeded 5%, when the fiscal deficit/ GDP greatly exceeds the historical average, the economy is being held up artificially. In 2023, this figure was -6.19%, in 2022 -5.34%, in 2021 -11.76% and in 2020 -14.69%. I mean, I can understand that in 2020-2021, we were facing an unprecedented global pandemic, but the deficit in the next two years is still much higher than it was historically. The large fiscal stimulus has fueled a sharp rise in the stock market, regardless of the Fed’s actions. This is probably why rates have not yet been lowered, because the fiscal deficit is still too high. Something might change after the presidential election. What is worrying is that this kind of deficit is becoming the norm, which will lead to negative consequences in the long run. CBO’s Budget Projections Total deficit estimates do not seem to be improving in the next few years, quite the contrary. Even if the United States is the world’s leading power, it does not mean that it can borrow as much as it wants, because this process involves a gradual distrust of the quality of its debt. In particular, if there is no reversal of the trend, the cost of net interest will become a burden that will limit economic growth. Today, we are close to reaching the trillion mark in net interest, and according to estimates, it will be worse in the future. Its weight compared to GDP could reach 3.90% in 2034. In other words, the large deficit may have postponed the recession, but long-term economic growth will suffer. Of course, the rating agencies are aware of all this, which is why both Fitch and S&P no longer consider U.S. debt AAA. This does not mean that the United States is at risk of default, it simply needs to avoid running deficits as if we were in the middle of a world war. Once the deficit is contained, there will no longer be the driver that is offsetting the negative effects of restrictive monetary policy. Moreover, the deficit issue may also be of interest to investors concerned about the re-inversion of the yield curve. Let me explain further. Federal Reserve Bank of St. Louis We all know that yield curve inversion has predicted all past recessions, and the main trigger is its re-inversion. In any case, re-inversion does not always happen in the same way. In the first case, it can occur because T-bills are bought more than T-bonds, so it is called bull steepening. In the second case, the exact opposite can happen, that is, T-Bonds are sold more than T-Bills, so it is called bear steepening. The second case is the one we are most interested in at the moment, because short rates will probably remain high for a long time to come, while long-term rates may see an increase due to the problems addressed earlier regarding the huge fiscal deficit. To put it another way, many expect re-inversions at the time when rates will be cut several times (this is many quarters from now) but actually, it could happen before that time. Certainly, worse-than-expected inflation data could speed up this process, as T-bond yields would surge upward. The Budget and Economic Outlook: 2024 to 2034. EUR/USD exchange rate and AI bubble My bearish thesis on the second half of 2024 is mainly based on what has been discussed so far, but there are other factors to consider that I will dwell on a bit. The first is the EUR/USD exchange rate, as it is affected by the monetary policy of the Fed and ECB. The latter has already started to cut rates, while the Fed may not even cut rates in 2024, although this is an unlikely scenario. Regardless, it is evident that the ECB is more inclined than the Fed regarding a more expansionary monetary policy, and this could depreciate the euro against the dollar. While part of this assumption is already discounted in the current exchange rate, in my view there may be a case for a weaker euro than expected. ECB inflation dashboard Taking a look at the HICP in detail, we can see that there are some countries where there is a risk of deflation rather than high inflation. Italy’s HICP is only 0.80%, for Finland and Latvia 0.40% and 0% respectively. At the same time, others such as Belgium and Croatia are well above 4%, Portugal and Spain slightly below. There is a great diversity in Europe in terms of inflation rate, and keeping the main refinancing operations rate at 4.25% can be detrimental to countries with inflation below 1%. In short, I think there are conditions for the ECB to cut rates faster than expected in 2024, resulting in an appreciation of the dollar against the euro. If it does not, some countries may experience a severe recession. This is important for any U.S. company that sells in Europe, as imports will be hurt. Finally, one last aspect I would like to address is the issue of artificial intelligence. You have been hearing about the famous AI bubble for months now, so I will not dwell on it too much. In my opinion, it is pointless to make comparisons with the tech bubble of early 2000; we are in a totally different situation. The tech companies that are fueling the bubble today are giants that generate tens of billions of dollars in free cash flow every year, as well as having negative net debt: the companies in vogue in 2000 were not even generating profits. Bubble or no bubble, justified valuation or not, what is certain is that these giants cannot grow that much every single year and have a huge weight on the S&P 500. TradingView Historically, consumer staples (XLP) have never experienced such a divergence in returns compared to the tech sector (XLK). I do not doubt that today’s tech companies are even sounder than many consumer staples, but such a divergence is too marked not to expect a return to the mean. Simply put, I think it makes more sense at the moment to add to the portfolio those businesses that we consider boring rather than those that are recently in the spotlight. Conclusion Everyone was pleased with this huge bull run, but like every good thing, sooner or later, there is an end. No one can know when, but based on the data analyzed in this article, I would say that a crucial time will be the end of the year. The outcome of the presidential election will have a major impact on the issue of the fiscal deficit, and by that time the Sahm Indicator may have already crossed the 0.50 threshold. At the same time, the yield curve may also have re-inverted due to bear steepening. In my view, the deterioration of the labor market can only be stopped (if it is not already too late) if the Fed starts cutting rates as early as the next meeting; otherwise it risks getting the timing wrong, as it almost always did. My strong sell rating refers to a second half of the year far more disappointing than the first, whose difficulties could perpetuate into 2025. We will see what happens, I certainly will not sell everything in a panic even in the event of a 15-20% collapse from current levels. Having a long-term approach allows you to see recessions as an opportunity to be exploited and not as something negative. Continue reading →

BrianAJacksonChinese central bank gold bullion purchases lagged in June, contributing to flat prices for the month. Agnico Eagle’s Ontario, Canada mine may emerge as a promising prospect for the gold industry. Monthly gold market and economic insights from Imaru Casanova, Portfolio Manager, featuring her unique views on mining and gold’s portfolio benefits. Mixed News Drives Flat Prices in May After reaching a new all-time high in May, offsetting forces kept gold unchanged during the month of June. Gold traded as high as $2,376 per ounce on June 6. On June 7, gold closed at its monthly low of $2,294 following news that the Central Bank of China did not buy any gold bullion in May. Global central bank gold buying has been one of the main drivers of this year’s gold rally, with the Chinese central bank behind a large percentage of those purchases. The People’s Bank of China has been reporting bullion purchases since November 2022, 18 consecutive months of buying. The pause in buying likely raised concern among gold market participants that this important driver of gold demand could weaken. In contrast, gold investment demand has been in decline since April 2022, but in June, global holdings of gold bullion-backed exchange traded products finally registered inflows, albeit small, after 12 consecutive months of net outflows. Is Western investment demand, the main driver of gold rallies historically, staging a comeback? Gold also gathered some support from inflation readings (May CPI and PCE) that were interpreted by the market as increasing the likelihood of interest rate cuts by the U.S. Federal Reserve (Fed). At the end of June, the market was pricing in two 25 basis point cuts in 2024, compared to only one 25 basis point cut being priced in at the end of May. Lower real interest rates have historically been supportive of higher gold prices. Gold closed at $2,326.75 per ounce on June 28, essentially unchanged from its May 31 close of $2,327.33. Rally in Miners Stalls (Despite Positive Outlook) Gold stocks did not fare quite as well as the metal in June; NYSE Arca Gold Miners Index (GDMNTR)1 and the MVIS Global Juniors Gold Miners Index (MVGDXJTR)2 were down 3.71% and -6.33%, respectively. We are disappointed with this outcome. The lack of investor interest in gold as an asset class in recent years has frequently led to gold stocks underperforming the metal, not only in a declining gold price environment, which is justified but also in periods of flat or sideways gold price action. There were no sector-wide results, updates, or any major events that could explain the generally widespread underperformance across the sector. Quite the opposite, in fact. Many companies provided project updates during the month of June that, in aggregate, we viewed as largely positive. We took the time to catalogue the announcements, news, and updates released by the companies in our gold mining universe during the month of June. We logged approximately 45 company releases including drilling results; completion of debt and equity financing; completion of mergers and acquisitions; new economic studies, as well as maiden resource estimates, and permits and regulatory approvals for several projects; construction updates, including declaration of first gold pour, from several new mines approaching production; mine specific news and production guidance revisions; comprehensive reviews of companies and assets via investor days; and a new life of mine plan for one of the largest gold mines in the world. Our original assessment, deeming the news flow broadly positive, was supported by our classification of each release as having the potential of being positive/neutral or negative to the outlook of the company. We classified over 40 of the updates as potentially positive/neutral and only 4 as potentially negative. For reference, the negative news included short-term production guidance downgrades due to weather/geotechnical-related disruptions, and a serious incident at a single asset, junior company (not held by the Strategy) that halted its operations. Fundamentally, in our opinion, any signs of trouble or weakness were significantly outweighed by signs of strength and health of the sector. A Closer Look at Agnico Eagle’s Detour Lake We had the opportunity to visit Agnico Eagle’s (5.01% of Strategy net assets) Detour Lake mine in Ontario. The mine and its potential can certainly be highlighted as a bright spot for the gold industry. We toured the open pit, the processing plant, the tailings dam, the site where the underground exploration ramp portal will be constructed, the maintenance shop and the training center (fleet operating simulator). Overall, our impressions were positive. The mine, the plant and the team showed well. The site visit followed the release of a new life of mine plan and underground project for the asset. The company also hosted a two-hour technical session to review the details of the new plan and project ahead of the site visit. The 2024 plan updates the existing open pit mine production profile and incorporates updated costing. The company has also completed a preliminary economic assessment for a proposed underground mining and mill throughput optimization project, demonstrating the potential to increase the Detour Lake mine’s overall production to an average of approximately one million ounces of gold per year over a 14-year period, starting in 2030. Portfolio Manager Imaru Casanova visiting Agnico Eagle’s (AEM, AEM:CA) Detour Lake mine in Ontario. Interested in digital assets? Receive the latest updates Annual production is expected to increase to approximately one million ounces per year from 2030 to 2043. This is an increase of approximately 43% or 300,000 ounces of gold annually, when compared to average annual production from 2024 to 2029. From 2044 until 2054, the mine is planned to process stockpile material, producing an average of about 300 thousand ounces of gold per year. Additional exploration has the potential to add ounces to the mine plan in future years and extend the life of the mine beyond 2054. With costs declining as production increases over the next twenty years, the cash flow generation of Detour Lake expands significantly (see chart below). With a pathway to one million ounces, Detour Lake has the potential to move from being one of the 10 largest gold mines in the world to being one of the top 5 gold mines in the world, in one of the most attractive mining jurisdictions. There is a lot for Agnico Eagle investors to be excited about, providing a great opportunity for Agnico to demonstrate why they are the highest quality gold mining company in the world, and solidify the case behind its historical valuation premium relative to its peers. Agnico Eagle’s “Pathway to One Million Ounce Producer” 1 Higher Cash Cost in stockpile reclaim period reflects drawdown of long-term low-grade stockpiles, lower head grade, and re-handling costs. Open Pit feed offset by Underground to Stockpile Reclaim period is 52Mt at 0.5g/t. 2 Free cash flow ((FCF)) represents the cash that a company generates after accounting for cash outflows to support operations and maintain its capital assets, and is non-GAAP measure. Source: Agnico Eagle. Data as of June 2024. Free cash flow ((FCF)) represents the cash that a company generates after accounting for cash outflows to support operations and maintain its capital assets. Important Disclosures All company, sector, and sub-industry weightings as of June 30, 2024, unless otherwise noted. Please note that VanEck may offer investments products that invest in the asset class(es) or industries included in this communication. This is not an offer to buy or sell, or a solicitation of any offer to buy or sell any of the securities mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results. Please note that the information herein represents the opinion of the author, but not necessarily those of VanEck, and this opinion may change at any time and from time to time. Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. Any graphs shown herein are for illustrative purposes only. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of VanEck. Diversification does not assure a profit or protect against loss. Nothing in this content should be considered a solicitation to buy or an offer to sell shares of any investment in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction, nor is it intended as investment, tax, financial, or legal advice. Investors should seek such professional advice for their particular situation and jurisdiction. 1 NYSE Arca Gold Miners Index (GDMNTR) is a modified market capitalization-weighted index comprised of publicly traded companies involved primarily in the mining for gold.2 MVIS Global Junior Gold Miners Index (MVGDXJTR) is a rules-based, modified market capitalization-weighted, float-adjusted index comprised of a global universe of publicly traded small- and medium-capitalization companies that generate at least 50% of their revenues from gold and/or silver mining, hold real property that has the potential to produce at least 50% of the company’s revenue from gold or silver mining when developed, or primarily invest in gold or silver. Personal consumption expenditures (PCE) is the primary measure of consumer spending on goods and services in the U.S. economy. 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Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein. Gold investments are subject to the risks associated with concentrating its assets in the gold industry, which can be significantly affected by international economic, monetary and political developments. Investments in gold may decline in value due to developments specific to the gold industry. Foreign gold security investments involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, or political, economic or social instability. Gold investments are subject to risks associated with investments in U.S. and non-U.S. issuers, commodities and commodity-linked derivatives, commodities and commodity-linked derivatives tax, gold-mining industry, derivatives, emerging market securities, foreign currency transactions, foreign securities, other investment companies, management, market, non-diversification, operational, regulatory, small- and medium-capitalization companies and subsidiary risks. All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance. ©&bsp;Van Eck Associates Corporation. Original Post Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors. Continue reading →

WASHINGTON (Reuters) – U.S. producer prices increased moderately in June, further confirmation that inflation had resumed its downward trend and strengthening the case for a September interest rate cut.The producer price index for final demand rose 0.2% last month after being unchanged in May, the Labor Department’s Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast the PPI nudging up 0.1%.In the 12 months through June, the PPI increased 2.6% after advancing 2.4% in May.The government reported on Thursday that consumer prices fell for the first time in four years in June amid cheaper gasoline and a broad deceleration in the costs of goods and services, including rents.The tame inflation data followed news last week of a rise in the unemployment rate to a 2-1/2 year high of 4.1%.With the Federal Reserve now wary of labor market weakness, economists and financial markets are increasingly betting on a rate cut in September, with another reduction in borrowing costs expected in December.Fed Chair Jerome Powell acknowledged the improving inflation environment during his testimony before lawmakers this week, but also highlighted the risks to the labor market saying “we have seen considerable softening.”The U.S. central bank has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range since last July. It has hiked its policy rate by 525 basis points since 2022.(Reporting By Lucia Mutikani; Editing by Andrea Ricci) Continue reading →

(Reuters) – Futures tied to the S&P 500 and the Nasdaq 100 indexes paused near record levels on Friday ahead of results from JPMorgan, Citigroup and Wells Fargo that will throw second-quarter earnings season into high gear.JPMorgan Chase, the largest U.S. lender, is expected to report a decline in quarterly profit, with analysts expecting large lenders to set aside more money to cover deteriorating loans.Shares of both JPMorgan and Citigroup were marginally down ahead of results.As the S&P 500 and Nasdaq scale new peaks, investors are hoping for strong profit growth from companies beyond the heavyweight tech names such as Nvidia so that the U.S. stocks rally can broaden out.A rotation out of high-flying large cap stocks in favor of small-cap shares knocked back the tech-laden Nasdaq by nearly 2% on Thursday after a surprise fall in U.S. consumer prices solidified bets of a September interest rate cut.Traders now see an 86% chance of a rate cut in September, up from 72% a week ago, according to CME Group’s FedWatch Tool.For further evidence of cooling inflation, investors will look to producer prices data for June and the University of Michigan’s consumer survey data later in the day.At 04:46 a.m., Nasdaq 100 E-minis fell 9.25 points, or 0.05%, and S&P 500 E-minis rose 4.75 points, or 0.08%. The Dow E-minis gained 39 points, or 0.1%.Tesla dipped 1.4% as UBS downgraded the electric vehicle maker to “sell”.U.S. regional lender Bank of New York Mellon and industrial supplies maker Fastenal are also scheduled to report.(Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty) Continue reading →