Category Archives: silver-rounds

It now looks like silver has completed a classic 3-wave correction from its May highs, following its strong advance in the Spring. On its latest 6-month chart we can see that it appears to be conforming to a classic Elliott wave pattern which consists of 5 waves up in the direction of the primary trend, as numbered, followed by a 3-wave correction or reaction that once complete is followed by another series of up waves.

The correction phase is considered to be complete or very close to complete – while it could react back further short-term towards the support level shown in the vicinity of the 200-day moving average which would not cause any technical damage, the overall pattern is strong and given that we will soon enter a seasonally favorable time of year for the Precious Metals, there is a good chance that it won’t react back much further, if at all.

Thursday’s breach of support will have thrown some investors and triggered stops, and may turn out to be the sort of “head fake” that frequently precedes a sizable advance. The dynamic in play here is that “Big Money” whacks the price through a support level to trigger stops and then they mop up the disgorged holdings ahead of renewed advance. If this is what is going on then it is of course very bullish.

So, whilst acknowledging the possibility of a little more downside short-term, the main message here is that silver is now in buying territory again with a major advance to a point way above the May highs on the horizon.

End of update. Continue reading →

(Reuters) -The Federal Reserve held interest rates steady on Wednesday but opened the door to reducing borrowing costs as soon as its next meeting in September as inflation continues coming into line with the U.S. central bank’s 2% target.The central bank’s Federal Open Market Committee ended a two-day policy meeting by keeping its benchmark overnight interest rate in the 5.25%-5.50% range.Inflation, according to the Fed’s statement, was now just “somewhat elevated,” a key downgrade from the assessment that it has used throughout much of its battle against rising prices that inflation was “elevated.”MARKET REACTION:STOCKS: The S&P 500 held a 1.59% gainBONDS: The yield on benchmark U.S. 10-year notes ticked higher but was still down on the day at 4.122%. The 2-year note yield rose to 4.381%FOREX: The dollar index pared a loss to -0.13% with the euro slipping from unchanged to -0.09%COMMENTS:TRAVIS KESHEMBERG, SENIOR PORTFOLIO MANAGER FOR THE SYSTEMATIC EDGE MULTI-ASSET TEAM, ALLSPRING GLOBAL INVESTMENTS, SAN FRANCISCO“Our base case is for the Fed to make its first cut in September and remain neutral from a forward guidance perspective, analyzing incoming data to inform future rate-cut decisions. Growth and jobs are not yet at a point that justifies a prolonged cutting cycle and less-restrictive monetary policy. We expect to see conditions deteriorate and thereby support further rate cuts later in the fourth quarter of 2024.“We continue to favor bonds, which benefit from moderating growth and moderating inflation, particularly internationally. We also continue to like equities. We expect broadening of the equity rally, and any relief from perceived looser monetary policy would likely support equity prices in the medium term.“Geopolitical uncertainty in the U.S. has increased in July, and we expect the Fed will take this situation into account in its decision-making.”DON CALCAGNI, CHIEF INVESTMENT OFFICER, MERCER ADVISORS, DENVER, COLORADO”It’s certainly what the market expected which is the right thing for the Fed to do, to sit tight.””They’re not telling you timing. What I’m seeing here is the Fed acknowledging that the risks are balancing … if you were going to make a case to cut rates, those are the data points you better cite in order to manage market expectations.””The fact that they are emphasizing that data in their communications, tells me that we’re closer to interest rate cuts in the future and the next meeting naturally would be September.””The market reaction is positive. The expectation coming into today was that the Fed is going to signal it’s closer to cutting rates. The Fed today delivered everything the market expected. There’s nothing here that in any way suggests the Fed delivered anything other than what the market expected.”JEFFREY ROACH, CHIEF ECONOMIST, LPL FINANCIAL, CHARLOTTE, NORTH CAROLINA (in an email)”The Fed used today’s statement to prepare markets for upcoming rate cuts. As inflation rates improve and unemployment increases, the Fed can cut rates yet keep the nominal funds rate above the inflation rate. Markets will likely respond favorably to the subtle shift in tone.”BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN“The Fed is tiptoeing towards being confident enough to cut. Adding that they are attentive to the risks to both sides of their dual mandate tees them up to cut in September if the next two CPI reports are well-behaved.”JAKE DOLLARHIDE, CEO, LONGBOW ASSET MANAGEMENT, TULSA, OKLAHOMA“It was the worst kept secret on the planet that the Fed was not going to cut in July. The Fed is going to have its day in the sun in September with a 25 or 50 basis point cut, but I would not be surprised if that is already priced into stocks. We may actually see the market down significantly the day the Fed actually cuts rates in September.”MICHELE RANERI, HEAD OF U.S. RESEARCH AND CONSULTING AT TRANSUNION IN CHICAGO (in an email )“There continues to be positive indicators that this may be the last meeting before we see an interest rate reduction at the next Fed meeting in September, with the possibility of a second rate reduction for 2024 still on the table.“As it applies to consumer demand for credit around large purchases such as homes and autos, this will likely begin to increase if, and when rates eventually begin to fall. Indeed, we are even seeing some early indicators that consumers are becoming more interested in new mortgages. Until rates do drop meaningfully, however, consumers should continue to use credit wisely and only to the extent that they know they can make their minimum monthly payments on.”(Compiled by the Global Finance & Markets Breaking News team) Continue reading →

MicroStockHubBy Kevin Flanagan Once again, the Fed kept rates unchanged at the July FOMC meeting. As a result, the Fed Funds trading range remains in the 5.25%–5.50% band that was introduced exactly a year ago and still resides at a more than 20-year high watermark. For those keeping track, this represents the eighth consecutive FOMC meeting where the policy maker decided to take no action on the rate front. However, if the inflation and labor market data continue to “cooperate,” this may be the last meeting where rates are left unchanged, with expectations for the first rate cut building for the next FOMC gathering in September. This is exactly where U.S. monetary policy appears to be pivoting. While not explicitly stating that a rate cut is forthcoming at the September FOMC meeting, the voting members seem to be guiding the money and bond markets in that direction. Specifically, the FOMC is highlighting the Fed’s dual mandate of inflation and employment rather than solely centering on progress on the price pressure front. Indeed, the emphasis on “balance” when it comes to the risks going forward is the Committee’s way of providing forward guidance on the potential for a rate cut. Another rather important aspect of Fed signaling is Chairman Powell’s continued use of the notion of being “confident.” In other words, the renewed trend toward disinflation that became evident in the second quarter is providing the springboard for cutting rates without fear of easing policy too soon. By adding the employment aspect back into the equation, the Fed has reintroduced the concept that future decision-making is now data-dependent on not just inflation reports but upcoming labor market data as well. This is where things could get interesting. At the June FOMC meeting, policy makers dialed back their “dot plot” to show a forecast of only one rate cut rather than the three cuts that were in place beforehand. The release of better-than-expected CPI (and core PCE readings) rendered this “new” dot plot as being almost immediately obsolete. To be sure, heading into the July policy meeting, implied probabilities for Fed Funds Futures were now showing an expectation of moving toward three rate cuts in 2024. In fact, once we get that first rate cut out of the way, I continue to emphasize that the central part of the investment landscape going forward will quickly turn to what type of rate-cutting cycle this will look like. If future economic data (think labor markets) does not reveal any signs of visible weakening, then this easing episode will be based on the concept that the current restrictive policy stance is no longer warranted because of the progress on inflation. This backdrop would more than likely result in a more deliberate rate-cutting phase. However, if the Fed were to see higher unemployment rates and continued disinflation in the months ahead, this would arguably create the environment for a more aggressive easing stance. The Bottom Line An overarching theme from Powell & Co. in public appearances has been that while rate cuts seem like a reasonable case scenario in the months ahead, Fed officials would still like to see “more data” to get them over that final hurdle. If upcoming data does continue to “cooperate,” it is possible that Chairman Powell could provide such forward guidance at the Kansas City Fed’s Jackson Hole Symposium in the second half of August. There are risks involved with investing, including possible loss of principal. Foreign investing involves currency, political and economic risk. Funds focusing on a single country, sector and/or funds that emphasize investments in smaller companies may experience greater price volatility. Investments in emerging markets, currency, fixed income and alternative investments include additional risks. Please see prospectus for discussion of risks. Past performance is not indicative of future results. This material contains the opinions of the author, which are subject to change, and should not to be considered or interpreted as a recommendation to participate in any particular trading strategy, or deemed to be an offer or sale of any investment product and it should not be relied on as such. There is no guarantee that any strategies discussed will work under all market conditions. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This material should not be relied upon as research or investment advice regarding any security in particular. The user of this information assumes the entire risk of any use made of the information provided herein. Neither WisdomTree nor its affiliates, nor Foreside Fund Services, LLC, or its affiliates provide tax or legal advice. Investors seeking tax or legal advice should consult their tax or legal advisor. Unless expressly stated otherwise the opinions, interpretations or findings expressed herein do not necessarily represent the views of WisdomTree or any of its affiliates. The MSCI information may only be used for your internal use, may not be reproduced or re-disseminated in any form and may not be used as a basis for or component of any financial instruments or products or indexes. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each entity involved in compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties. With respect to this information, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including loss profits) or any other damages (www.msci.com) Jonathan Steinberg, Jeremy Schwartz, Rick Harper, Christopher Gannatti, Bradley Krom, Kevin Flanagan, Brendan Loftus, Joseph Tenaglia, Jeff Weniger, Matt Wagner, Alejandro Saltiel, Ryan Krystopowicz, Brian Manby, and Scott Welch are registered representatives of Foreside Fund Services, LLC. WisdomTree Funds are distributed by Foreside Fund Services, LLC, in the U.S. only. You cannot invest directly in an index. Kevin Flanagan, Head of Fixed Income Strategy As part of WisdomTree’s Investment Strategy group, Kevin serves as Head of Fixed Income Strategy. In this role, he contributes to the asset allocation team, writes fixed income-related content and travels with the sales team, conducting client-facing meetings and providing expertise on WisdomTree’s existing and future bond ETFs. In addition, Kevin works closely with the fixed income team. Prior to joining WisdomTree, Kevin spent 30 years at Morgan Stanley, where he was Managing Director and Chief Fixed Income Strategist for Wealth Management. He was responsible for tactical and strategic recommendations and created asset allocation models for fixed income securities. He was a contributor to the Morgan Stanley Wealth Management Global Investment Committee, primary author of Morgan Stanley Wealth Management’s monthly and weekly fixed income publications, and collaborated with the firm’s Research and Consulting Group Divisions to build ETF and fund manager asset allocation models. Kevin has an MBA from Pace University’s Lubin Graduate School of Business, and a B.S in Finance from Fairfield University. Original Post Continue reading →

tadamichiThe US stock market is on a tear. Since the start of this year, January 2024, the Dow Jones , S&P 500, and Nasdaq have each repeatedly set new all-time records. Indeed, the trend in stocks has been strongly upward for the last two or three years. For instance, the S&P 500 is about 40% above where it was in January 2021, when Joe Biden became President [43% higher]. The price of gold has also shown a strong upward trend, reaching $2,470 an ounce on July 17, the highest in history. Why are these assets so elevated? The stock market and gold An increase in perceptions of risk due to recent political and geopolitical uncertainty, could explain the rising gold price. But it cannot explain the stock market. Anyway, the VIX has been declining during this period, not rising. That could explain the stock market, but not the price of gold. Prices for chip-maker Nvidia and other high-tech stocks have risen the most rapidly and have gotten the most attention, particularly inspired by the rapid emergence of artificial intelligence since late 2022. But even the rest of the stock market, with tech companies excluded, has seen a steady rise in prices. Prospects of an easier monetary policy in the future could, in principle, explain both the high stock market and the high gold price. It is well known that the stock market depends inversely on the interest rate, holding other things constant. One way to think about it is that an increase in the interest rate reduces the presented discounted value of future corporate earnings. (Another way to think about is that an increase in the interest rate induces investors to shift out of equities and into bonds.) Conversely, lower interest rates would explain the higher stock market. The real price of gold also depends inversely on the real interest rate, both in theory and practice. Prospects of easier monetary policy should raise demand for gold. But interest rates, including long-term rates, rose during this period, which works to lower stock prices and commodity prices, not to raise them. So, where should we look to explain recent financial markets, the rise in real interest rates that has taken place over the last two to three years, or the likely prospects of reductions in the near future? For an answer, let’s turn to the foreign exchange market. The foreign exchange market The foreign exchange market provides the most convincing evidence that recent movements in financial markets have come at a time when monetary policy is, if anything, tighter than had been expected two or three years ago, not looser. The dollar is 14% stronger than it was three years ago [=log 117/102, for the index of advanced-country currencies.]. If real interest rates during this period were low or expected to fall, the currency should be weaker, not stronger. One explanation that has been given for the run-up in gold prices is that many countries are diversifying out of dollars and into gold. This is likely to be especially true of the People’s Bank of China and other central banks of countries that don’t have good geopolitical relations with the US (for example, as reflected in voting patterns in the UN) and thus may fear future sanctions. But, again, the foreign exchange value of the dollar should have been weakening, if that were the explanation, which it is not. Furthermore, recent econometric evidence shows surprisingly little support for the hypothesis that geopolitical disaffection vis-vis the US is driving the global shift out of dollars. GDP growth can explain it all What can explain simultaneously high prices in all three markets, gold, stocks, and the dollar? The answer is strong demand for these three assets coming from a strong US real economy. Two or three years ago, professional forecasters as well as the general public thought there was a high chance of recession in the near future, if indeed the economy was not already in one. But, contrary to those expectations, real GDP over this period has continued to grow. Admittedly, in the case of the price of gold, one should look at global growth, not US growth. (Growth in Europe and China has lagged; but the IMF says that global output gaps are now closing in these places.) US consumer demand has been strong. Growth in 2021 and 2022 was boosted by the CHIPS Act, Infrastructure Investment Act and the Inflation Reduction Act. Members of neither political party are prepared to reverse the fiscal expansion in order to confront the rising national debt. And a global safe-haven demand for US assets, so far, has continued as strong as ever. True, US economic growth, registering 2.5% in 2023, has slowed relative to the rapid pace of 2021. But it is still higher than has been usual so far this century. (The average GDP growth rate since 2001 was 2.0%.) And, most relevant for asset prices during this period, economic activity has been stronger than had been expected at the beginning of Biden’s term. Not only was growth in 2021 unusually high, but observers’ forecasts that growth would disappear in 2022 and again in 2023 were repeatedly surprised on the upside. The advance GDP estimate for the 2nd quarter of 2024 last week came out, yet again, stronger than expected: a growth rate of 2.8% per annum. Presumably, each time that economic activity was higher than expected, the demand for American stocks, gold, and the dollar rose. This would explain the upward trends in all three sorts of assets. Whether this pattern of strength will continue after the November presidential election is anyone’s guess. Original Post Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors. Continue reading →

(Bloomberg) — Stocks got hit by a selloff in the world’s largest tech companies ahead of key central bank decisions. Bonds and gold climbed as traders rushed for safety amid geopolitical risks. Oil remained lower.Most Read from BloombergIsrael’s military struck Beirut, aiming at a Hezbollah commander, in response to a rocket attack on Saturday in the Golan Heights that killed 12 people. Most shares in the S&P 500 rose, but renewed tech weakness weighed on the gauge — with Nvidia Corp. tumbling 6%. After a $2.3-trillion Nasdaq 100 wipeout, investors awaited Microsoft Corp.’s results amid concern that firms aren’t yet seeing returns from artificial intelligence. Its numbers will set the scene for reports from other heavyweighs this week, with markets also gearing up for Wednesday’s Federal Reserve decision.“If the Fed does not signal a September rate cut, markets could get a bit ugly given recent tech weakness — especially if earnings underwhelm,” said Tom Essaye at The Sevens Report.While the Fed is expected to hold benchmark rates at the highest level in more than two decades, traders will be closely watching for any hints that the start of policy easing is near. In the run-up to the announcement, data showed US consumer confidence rose on an improved outlook for the economy and job openings beat forecasts.The S&P 500 fell about 1%. The Nasdaq 100 slid 1.5%. A gauge of the “Magnificent Seven” megacaps sank 2.5%. The Russell 2000 of small firms was little changed. Microsoft is investigating outages of some Office applications and cloud services. CrowdStrike Holdings Inc. plunged on a report Delta Air Lines Inc. hired an attorney after a tech outage. Procter & Gamble Co. sank on a sales miss. JetBlue Airways Corp. soared on a turnaround plan.Treasury 10-year yields declined three basis points to 4.14%. West Texas Intermediate crude hovered near $75.The yen rose. Bank of Japan Governor Kazuo Ueda will be under intense scrutiny Wednesday when he unveils his plans for quantitative tightening and delivers a decision on the policy interest rate. Recent yen weakness has done more harm than good for the Japanese economy, according to Japan’s newly appointed top foreign exchange official.*BOJ BOARD MEMBERS TO DISCUSS RAISING RATES TO 0.25%: NHKThe continuing broadening of this year’s powerful stock market rally hangs on what the Fed does and says about interest rates after its two-day meeting wraps up on Wednesday. Since the latest consumer price index print showed signs of cooling inflation, traders have stepped up their rotation out of Big Technology shares and into everything from small-capitalization stocks to value plays.If the Fed is about to begin a rate reduction cycle, stock bulls have history on their side. In the six prior hiking cycles, the S&P 500 Index has risen an average 5% a year after the first cut, according to calculations by the financial research firm CFRA. What’s more, the gains also broadened, with the small-cap Russell 2000 Index climbing 3.2% 12 months later, CFRA’s data show.Goldman Sachs Group Inc. Chief Executive Officer David Solomon said one or two Fed rate cuts later this year are looking increasingly likely, after predicting just two months ago there would be no rate reductions in 2024.“One or two cuts in the fall seems more likely,” Solomon said Tuesday in a CNBC interview from Paris. “There’s no question there are some shifts in consumer behavior, and the cumulative impact of what’s been kind of a long inflationary pressure, even though it’s moderating, is having an effect on consumer habits.”The S&P 500 Index has probably already logged the gains it will see this year, but the benchmark still presents ample opportunities for investors, according to Bank of America Corp.While neutral on the index overall, BofA’s Savita Subramanian says there’s potential for strong returns in a few areas: among dividend payers, “old school” capital-expenditure beneficiaries like infrastructure, construction and manufacturing stocks, and other themes that don’t revolve around artificial intelligence.“In mid-2023, sentiment was deeply negative and our toolkit suggested that the direction of economic and earnings surprises was more likely positive than negative,” Subramanian, the firm’s head of US equity and quantitative strategy, told clients in a note dated July 29. “Today, sentiment is neutral and positive surprises are ebbing.”Corporate Highlights:Pfizer Inc. raised its profit expectations for the year, citing new cancer drugs, as it seeks to dig out of a Covid-related hole in sales.Merck & Co. got hit as light sales of its Gardasil HPV vaccine in China dimmed quarterly profit and sales that beat Wall Street estimates.SoFi Technologies Inc. raised its forecast for this year’s profit and revenue as the fintech benefits from both its newer technology businesses and its trademark lending operation.Archer-Daniels-Midland Co.’s quarterly profit shrank more than expected as the grain trading giant faces a downturn in crop markets.Airbus SE’s operating profit fell by more than half in the second quarter after the company booked a charge at its space unit, forcing it to cut costs amid lower-than-anticipated aircraft deliveries.L’Oréal SA reported sluggish sales growth in the second quarter as the world’s biggest maker of beauty products suffered from weakness in China.BP Plc maintained the pace of share buybacks and increased its dividend as strong second-quarter earnings from pumping crude offset weakness in other parts of the business.Grifols SA, the Spanish pharmaceutical company hit by a short seller attack this year, said it overstated the value of its stake in a Chinese firm and reported an accounting adjustment of €457 million ($494 million).Key events this week:Eurozone CPI, WednesdayBank of Japan policy decision, WednesdayUS ADP employment change, WednesdayFed rate decision, WednesdayMeta Platforms earnings, WednesdayEurozone S&P Global Eurozone Manufacturing PMI, unemployment, ThursdayUS initial jobless claims, ISM Manufacturing, ThursdayAmazon, Apple earnings, ThursdayBank of England rate decision, ThursdayUS employment, factory orders, FridaySome of the main moves in markets:StocksThe S&P 500 fell 0.8% as of 1:23 p.m. New York timeThe Nasdaq 100 fell 1.6%The Dow Jones Industrial Average rose 0.2%The MSCI World Index fell 0.5%Bloomberg Magnificent 7 Total Return Index fell 2.4%The Russell 2000 Index was little changedCurrenciesThe Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.0817The British pound fell 0.2% to $1.2837The Japanese yen rose 0.6% to 153.09 per dollarCryptocurrenciesBitcoin fell 2.2% to $65,906.04Ether fell 0.9% to $3,292.95BondsThe yield on 10-year Treasuries declined three basis points to 4.14%Germany’s 10-year yield declined two basis points to 2.34%Britain’s 10-year yield was little changed at 4.04%CommoditiesWest Texas Intermediate crude fell 1.1% to $74.94 a barrelSpot gold rose 1% to $2,407.08 an ounceThis story was produced with the assistance of Bloomberg Automation.Most Read from Bloomberg Businessweek©2024 Bloomberg L.P. Continue reading →

OpenAI seeks ‘vast quantities’ of nuclear fusion energy to power superhuman AI

OpenAI’s energy demands will be substantial. Not just OpenAI but this set off an AI arms race which will turn into an Energy Sourcing Stampede.Grids are already stressed out in USA. (Remember Texas, California, Mid Atlantic, East Coast and other regions where heat waves or impact weather created hundreds of blackouts and this summers heat has caused of 7,500 power interruptions)

Data centers in their rush to be first movers are developing pop up power plants (solar) but AI data centers are going to source even more so lets discuss Nuclear Energy.

OpenAI is seeking to purchase “vast quantities” of electricity from nuclear fusion to power its data centers.

The International Energy Agency (IEA) forecasts that total data center electricity consumption could reach more than 1,000 terawatt-hours (TWh) by 2026, which is roughly equivalent to Japan’s entire electricity consumption.

AI-related services are significantly increasing energy demands. For example, incorporating AI into search engines like Google could lead to a tenfold increase in electricity demand.

OpenAI’s ChatGPT uses about 2.9 Wh of electricity per request, compared to 0.3 Wh for a typical Google search.

The AI industry’s electricity demand is expected to grow exponentially, potentially increasing tenfold from 2023 to 2026.

Microsoft and OpenAI are reportedly working on a massive 5GW AI data center project called Stargate, which could cost up to $100 billion and come online in 2028.

In the US, data center electricity consumption is estimated to rise from about 200 TWh in 2022 to almost 260 TWh in 2026, accounting for 6% of total electricity demand.

OpenAI’s data centers energy needs will be enormous, likely in the hundreds of terawatt-hours range annually.

The fact that OpenAI is seeking nuclear fusion energy, which is still in development, underscores the magnitude of their anticipated energy requirements for future AI systems

Forget Uranium: Silver is a Much Better Way to Profit from AI & Nuclear Energy

Rod Cluster Control Assemblies (RCCAs)

Structure:

RCCAs consist of absorber rods attached to a spider assembly.

A typical RCCA has 24 absorber rodlets.

The spider assembly includes a brazed spider, spider springs, a spring retainer, and a spring tension bolt.

Dimensions:

While exact dimensions aren’t provided, we know that RCCAs are designed to fit within fuel assemblies in the reactor core.

For example, they’re available in configurations for 14×14, 15×15, 16×16, 17×17, and 17x17XL core layouts.

Materials:

The absorber rods are made of a silver-indium-cadmium (Ag-In-Cd) alloy.

The rod cladding is made of high-purity, partially cold-worked Type 304 stainless steel tubing.

The outer surface of the cladding is coated with industrial hard-chrome plating for enhanced wear resistance

RECAP:

AI data centers will use more energy than any other industry sector in USA.

The two prevailing sources of AI Data Center Energy Needs are Solar and Nuclear.

Solar panels use 500,000 ounces of Silver per gigawatt

Considering a project like Microsoft / Open AI Stargate

This table illustrates the silver usage for solar installations, comparing a standard 1 GW installation to the proposed Stargate AI data center project. The Stargate project, with its massive 5 GW capacity, would require five times the amount of silver used in a 1 GW installation, totaling 2,500,000 ounces of silver.

This significant silver requirement for large-scale solar projects like the Stargate AI data center underscores the growing demand for silver in the renewable energy sector. It also highlights the potential impact of AI and data center projects on silver consumption, as these facilities increasingly turn to solar power to meet their enormous energy needs

Silver: Best Way to Invest in AI and Silver could rival Uranium when considering Nuclear Energy based on the Rod Cluster Control Assemblies mentioned above

Uranium is relatively abundant in Earth’s surface due to its lithophile nature, which causes it to concentrate in the continental crust during geological processes.

Additionally, uranium’s long half-life allows it to persist in the crust over geological time scales. Unlike siderophilic elements that alloy with iron and sink to the core, uranium’s chemical properties prevent it from doing so, contributing to its presence in the Earth’s crust.

The Earth’s crust contains about 2-4 parts per million of uranium, making it more common than silver.

In contrast, silver is rarer in Earth’s surface, with an average crustal abundance of only 0.075 parts per million. There are only 33 deposits of Silver Globally with over 25 Million ounces and most of these are not of the highest grade compared to the 4 silver miners we endorse.

Silver is in high demand for various applications, including AI, aerospace, solar panels, electronics, robotics, jewelry, investment, and military uses.

This increased demand across multiple industries will lead to a massive spike in silver’s value and importance in the global market, making it a critical resource and its significant to report Silver’s relative rarity compared to uranium.

Outcrop Silver TSXV: OCG | OTCQX: OCGSF | DE: MRGOutcrop Silver is advancing the Santa Ana project, a high-grade silver deposit located near the town of Mariquita in Colombia’s Tolima Department. The project covers over 27,697 hectares and is situated approximately 190 km from Bogota.

Santa Ana is notable for its exceptional silver grades, with indicated resources averaging over 600 g/t silver equivalent

The company has conducted extensive exploration, completing more than 330 diamond drill holes and discovering seven mineralized veins within a 3.7 km area of the historic Santa Ana mines vein system.

Outcrop Silver’s focus on this primary silver project with world-class discovery potential positions it as a unique player in the silver mining sector Continue reading →

In this article, I will present evidence that shows it is highly likely the next US President will inherit a major recession and stock bear market. This is likely to dominate the early years of their administration, which will lower his or her popularity and make it difficult to implement their agenda.In addition to being interesting, I hope this information will help investors who want to prosper during the challenging times ahead. Betting Markets Currently Favor Trump According to the table below from Real Clear Politics, betting markets are predicting Trump will likely win the Presidency with 58% odds. Harris is second with 33% odds, and Michelle Obama is a distant third with only 3% odds. Whoever wins the election will likely have a challenging time in their early years if there is a recession and bear market, particularly with the country already highly divided politically. Real Clear Politics Presidential Economic Policies Are Not Likely To Prevent Recession It is unlikely that the next President will have any major influence on the likelihood of a recession and bear market. If Trump is elected, he may try to implement higher tariffs, trade restrictions, and tougher immigration policies while trying to offset the negative impact of these policies on the economy by reducing regulations and lowering income taxes. Unfortunately, high-budget deficits and the huge government debt problem will likely persist, since neither party has a plan to restructure major entitlement programs like Social Security or Medicare, which is the key driver of long-term debt and deficits. Federal Reserve Monetary Policy Drives Boom-Bust Business Cycle Unlike Presidential fiscal policies, I believe Federal Reserve monetary policy is the key driver of the boom-bust business cycle. That is why Wall Street hangs on every word said by Fed Chair Jay Powell and his central planning colleagues. According to the Austrian Business Cycle Theory, developed a century ago by Austrian economists Ludwig von Mises and F.A. Hayek, unsustainable economic booms are caused by central and commercial banks creating new money out of thin air. The inevitable busts occur when they slow money supply growth or, even worse, contract it. In response to the Covid panic of 2020, the Fed created 40% more US dollars. That led to the highest inflation rates since the early 1980s. That high “transitory” inflation forced the Fed to raise the Federal Funds interest rate by over five percentage points over the past couple of years, which is the biggest increase in over 40 years. Every time there has been a large increase in rates by the Fed, there has been a recession. One of the Fed’s preferred inflation measures is “SuperCore CPI”, which is services inflation less shelter. SuperCore CPI rose 4.8% in June, which is 2.4 times higher than the Fed’s 2% target. This suggests the Fed should not be cutting rates anytime soon if they are serious about fighting the inflation they created, but I believe they will as unemployment rises and a recession becomes obvious. For those investors who believe the Fed can prevent a recession with rate cuts at this point, I remind them that the Fed slashed rates all throughout the early 2000s and 2008-2009 recessions, but that failed to prevent them or their related stock bear markets. The chart below shows the Federal Funds rate going back 70 years. It indicates that recessions (shaded gray) began after significant Fed rate hikes, including in the early 2000s, 2008-2009, and 2020. It also shows that the Fed has held rates at a similar level and for a similar year-long period as they did before the Great Recession. This is not a bullish chart for the economy. FRED Yield Curve Inversion Always Precedes Recessions Due to the Fed rate hikes, short-term rates are higher than long-term rates, which is called an “inverted yield curve”. Every time the yield curve has been this inverted in the past 100 years, there has been a major recession. That includes the Great Depression of the 1930s. The 10-Year/1-Year Treasury yield curve has been inverted for the past two years, as shown in the chart below. That is longer than the 18 months of yield curve inversion before the Great Recession of 2008-2009. Historically, the longer the yield curve inversion, the longer the subsequent recession. FRED Money Supply Has Been Declining Due to the Fed’s tight monetary policies, the Fed’s Monetary Base (currency plus bank reserves) has declined 11% since December 2021, as this chart shows. FRED The popular M2 money supply has declined by 3.5% since March 2022. I believe a better money supply measure is one that does not double count and includes money that can be immediately spent. Based on the work of economist Murray N. Rothbard, this can be defined as M2 less small time deposits less retail money market funds plus Treasury Deposits with Federal Reserve Banks. This measure is down 12.7% since May 2022, as shown here. That is the biggest decline since the Great Depression. FRED Housing Demand Is In Recession Housing demand is very sensitive to interest rates, which makes it an excellent leading economic indicator. Due to mortgage rates more than doubling over the past few years and very high home prices relative to incomes, buying conditions for homes are near the worst levels in history and housing demand is very weak. As a result, the NAHB Housing Market Index (blue line in the chart below) has fallen to a level typically seen during recessions. In addition, housing starts (red line) are down 4.4% year-over-year. NAHB Manufacturing And PMIs Are In Recession Manufacturing is also a proven leading economic indicator. As shown below, manufacturers’ new orders (ex-defense and aircraft) are declining -0.3% year-over-year. That is not an inspiring sign for the economy. FRED The composite of the ISM manufacturing and services purchasing manager indexes (“PMIs”) is below 51, which typically only occurs in a recession, as shown below. Arch Global Economics Real Retail Sales Are Declining Declining real retail sales are a typical recession sign. In June, real retail sales fell 0.7%. As the following chart shows, real retail sales have been flattish or declining for more than two years. Imagine how much real retail sales can decline when unemployment starts rising significantly, as it typically does about two years after the yield curve inverts. FRED Unemployment Is Rising At A Recessionary Pace Speaking of unemployment, there are numerous signs it is getting worse. One sign is temporary job losses, which are a leading employment indicator since temporary workers are the easiest type of employee to lay off. Temporary job losses have totaled 515,000 since March 2022 and are falling at a rate only seen in recessions. That is also true of other leading employment indicators such as job openings, quits, and hires. Another sign of a recession is declining full-time jobs. While part-time jobs have increased, a whopping 1.6 million full-time jobs have been lost over the past year. As this chart shows, full-time jobs are falling at a pace only seen around recessions. FRED Historically, a recession has always occurred when the four-week moving average of continuing unemployment insurance claims rose 20% or more. So far, they have increased 37% from their lows in June 2022, as shown here. FRED Another sign of a recessionary jobs market is the combined ISM manufacturing and services Employment Composite has been below the neutral 50 level for months, as shown here. Longview Economics Perhaps the simplest and most useful employment indicator is the unemployment rate. Historically, whenever it has risen at least 0.5% from its lows, there has been a recession. So far, it has increased 0.7% from its low of 3.4% in 2023 to 4.1% now. FRED Leading Economic Index Is Declining At A Recessionary Pace The Conference Board’s Leading Economic Index is a composite of 10 proven leading economic indicators. As the chart below shows, it is declining -5% year-over-year. That is similar to the declines seen at the beginning of recent recessions. The Conference Board Stock Market Valuation Is At All-Time High What does a recession mean for the stock market, when we’re at the beginning of the “AI revolution”? Remember when Internet mania drove the stock market to such high valuations in 2000 that the NASDAQ ended up collapsing about 80% during the relatively brief and mild recession of the early 2000s? The stock market always falls into a bear market during a recession. The higher the starting valuation, the deeper the bear market that usually follows. As this chart from economist and fund manager John Hussman shows, the stock market is now at the highest valuation level in history…even higher than the valuations seen at the Tech Bubble peak of 2000 or even the 1929 peak. This stock market valuation ratio (which is similar to Warren Buffett’s preferred valuation ratio: total stock market capitalization to GDP) has a century of accurately forecasting long-term (12-year) returns for the S&P 500 better than any other valuation metric. Based on this all-time high valuation level, the S&P 500 is likely to be at least 50% lower in 12 years. Hussman Strategic Advisors What Can Investors Do? With a new President likely to inherit a recession and bear market, what can an informed investor do? The easiest strategy is to identify when the bear market is likely starting based on technical indicators and simply invest in Treasury bills or a money market fund and earn 5% interest risk-free. I believe they can also consider investing in gold and silver. I recently argued that gold and silver are in a bull market uptrend that is likely to continue for a while. For those investors willing to take on more risk in the goal of seeking higher returns during a bear market, they can buy inverse ETFs that rise in price when stocks fall, such as SH or PSQ. I wish you the best of luck in navigating the challenging times ahead. Please let me know your thoughts in the comments below, so we can all continue learning from each other. adamkaz Continue reading →

US stocks rose during morning Trading Friday, poised for a comeback bid as investors embraced new pricing data that showed inflation continuing to ease, solidifying expectations for coming interest-rate cuts.The Dow Jones Industrial Average (^DJI) added 1.6%, or more than 600 points, after the blue-chip index eked out a closing gain. The S&P 500 (^GSPC) rose about 1%, while the Nasdaq Composite (^IXIC) climbed 0.8%, both coming off a failed attempt to rebound from this week’s tech-led sell-off.Stocks are looking positive after a volatile series of sessions that have put the major gauges on track for hefty weekly losses. The Nasdaq and the S&P 500 have taken a bruising as Big Tech earnings undermined confidence in the AI trade, spurring the ongoing exodus from megacaps into small cap stocks.That pause in this year’s rally has Wall Street questioning whether the sell-off is a turning point to sustained lower prices or a typical bull-market pullback. In play are earnings-fueled concerns about softness in the US economy, though Thursday’s surprisingly hot GDP print eased those somewhat.Friday’s big data point was the closely watched Personal Consumption Expenditures (PCE) index, which provided more fuel to the notion of a still-strong economy and gradually cooling inflation. “Core” PCE, which strips out the cost of food and energy and is closely watched by the Fed, came in slightly higher than expectations but rose at its slowest pace in over three years.Read more: 32 charts that tell the story of markets and the economy right nowInvestors are also getting set for quarterly earnings next week from four more “Magnificent Seven” techs — Apple (AAPL), Microsoft (MSFT), Amazon (AMZN) and Meta (META).Live5 updatesFri, July 26, 2024 at 11:45 AM EDTThe Fed inches closer to easing Fed officials will huddle next week to decide the next the next course of action on interest rate policy. While the market widely expects officials to hold rates steady in July, the meeting’s significance comes as officials hint at where they stand for their September meeting, when observers predict the first rate will arrive.”We expect the Fed to keep its policy rate unchanged in July while signaling progress on reducing inflation has resumed,” said Bank of America Global Research analyst Michael Gapen in a report on Friday.Even though Fed officials have indicated that recent inflation readings are encouraging, some analysts still do not believe that a September cut is guaranteed. Fed officials have emphasized that more data is needed before they can pull the trigger on an easing cycle.”The Fed is optimistic that cuts are likely in the near-term, but we do not think it is willing to signal September is a done deal,” Gapen said. “It could happen, but it would depend on the data.”Gapen also noted that easing inflation has prompted the Fed to emphasize both sides of its dual mandate, instead of just focusing on price stability. That will give officials leeway to cut rates for a variety of reasons.”Cuts can happen because the economy cools, because inflation slows, or both.”Fri, July 26, 2024 at 11:00 AM EDTStocks trending in morning tradingHere are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.3M (MMM): Shares of the manufacturing company rose more than 15% early Friday after raising the low end of its full-year adjusted earnings guidance and reporting second quarter sales that came in above expectations.DexCom (DXCM): The manufacturer behind glucose monitors saw its shared plummet close to 40% Friday morning after the company shocked Wall Street with a cut its annual revenue forecast tied to fewer new customers and an internal restructuring.Deckers Outdoors (DECK): Shares of the footwear designer rose 7% after the company reported Q1 results that beat estimates, with net sales of $825.3 million coming in better than the $807.8 million Wall Street was expecting. Deckers also raised its full-year profit forecast.Coursera (COUR): The online learning platform that has been under pressure because of the looming threat of an AI-led disruption in education, surged more than 40% Friday after earnings came in above expectations. Coursera said it surpassed more than 2 million enrollments in its array of generative AI offerings.Fri, July 26, 2024 at 10:22 AM EDTComing rate cuts could calm fears of slowing growth This week’s topsy-turvy trading was fueled in part by fears of slowing growth, and second guessing tied to Big Tech’s AI push.But Friday’s favorable inflation reading, which will boost the case for the Fed to start cutting rates, could help calm those fears, as more affordable borrowing will help the economy to continue to expand.”Recently, the market has pivoted to fears of slowing growth over fears of sticky inflation, and we think both concerns are valid, but if the Fed is able to lower rates in a predictable and reasonable manner then the economy should continue to expand and inflation should (very slowly) proceed lower to the Fed’s target,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, in a note on Friday.A recent stream of encouraging inflation data has also helped minimize less favorable price pressure data from the first quarter, which Fed officials have said prompted them to rethink their rate-cutting timeline and instead instill a plan of higher rates for longer.Without that impediment, central bankers now have more leeway to start cutting rates. “For the past few months the inflation data have been cooperating,” Zaccarelli said. And as long as the data keeps coming in to boost the Fed’s confidence in slowing inflation, multiple cuts could be in store for the year.Fri, July 26, 2024 at 9:31 AM EDTStocks poised for rebound after encouraging inflation data The final session of a volatile trading week had stocks set for a rebound as new inflation data showed easing price pressures, boosting investor confidence in a widely expected September rate cut.The Dow Jones Industrial Average (^DJI) added 0.6%, or about 200 points, after the blue-chip index eked out a closing gain. The S&P 500 (^GSPC) rose about 0.8%, while the Nasdaq Composite (^IXIC) climbed 1.1%, both coming off a failed attempt to rebound from this week’s tech-led sell-off.Fri, July 26, 2024 at 8:56 AM EDT Fed’s preferred inflation gauge steadies ahead of expected cutsThe latest reading of the Fed’s preferred inflation gauge showed prices increased slightly more than expected in June.The core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Federal Reserve, rose 2.6% over the prior year in June; above economists’ estimate of a 2.5% increase and unchanged from the month prior. Still, the print marked the slowest annual increase for core PCE in more than three years.Core PCE rose 0.2 % from the prior month, in line with Wall Street’s expectations for 0.2% and faster than the 0.1% increase seen in May. Continue reading →

DNY59The major market averages rebounded during the first half of yesterday’s trading day on a better-than-expected GDP report for the second quarter, but the rally fizzled in the afternoon when technology stocks resumed their downtrend. The relentless selling in the sector that started the day after the Consumer Price Index (CPI) report for June was released on July 11 is probably closer to its end than just beginning. The sector was simply overbought, as the euphoria over the benefits of artificial intelligence (AI) reached a fever pitch, and the sector needed to revert to the mean. FinvizCoincidentally, investors were also looking for a good reason to broaden the bull market rally beyond technology, which came in the form of an extremely favorable inflation report, affirming the Fed will likely begin easing policy no later than September. That opened the floodgates to the ongoing rotation. The Magnificent 7 technology stocks and many other names in the sector that have been riding the AI wave were clearly exhibiting extreme valuations, but that is not the definition of a bubble, as many disgruntled bears are trying to claim. Nor is the correction in the sector a bubble bursting. Valuation is a horrible timing tool for markets, sectors, and stocks, as all can remain overvalued or undervalued for extended periods of time. To form a bubble, you need excesses in the economy and markets beyond the valuation of one sector, but they don’t exist. BloombergThe economy proved its resilience once again by growing 2.8% in the second quarter, according to the initial estimate by the Bureau of Economic Analysis. That was well ahead of the consensus expectation for 2% growth, but it is important to note that inventory building contributed 0.8% to the overall number. Still, when we exclude inventories, government spending, and trade, which results in “core” growth, the number was a healthy 2.6%. Most importantly, consumer spending rose 2.3% and was the largest contributor to growth. Despite some signs of fatigue, the consumer is alive and well. BloombergThe GDP price index (inflation) increased at a 2.3% annual rate during the quarter, which should comfort the Fed as it embarks on an easing cycle, because it can ease for all the right reasons. The most important one is that the rate of inflation is gracefully falling to its target of 2% at a much faster rate than the Fed forecasted in its more recent Summary of Economic Projections. The soft landing taking place is the primary reason that the correction in the technology sector is probably nearing its end. I surmised last week that we would see a 10% decline in the Nasdaq 100 (QQQ), which would bring the index down to approximately $450 before we found support. That support would coincide with the Relative Strength Index (top of chart) falling from an extremely overbought 80-plus into oversold territory below 30. Yesterday, the index closed at $458, and the RSI fell to 33. Stockcharts While I think we are close, I am not inclined to load the boat on the largest technology names, and there is no guarantee we don’t see this index fall to a more deeply oversold level that tests the 200-day moving average at $425, although I see that as a low probability. Still, these companies need to grow earnings into what are still expensive stock prices, which means we probably see churn between here and their 52-week highs in the weeks and months ahead. Meanwhile, the rest of the market continues to narrow the performance gap, which has been my expectation all year long. This improvement in breadth is a sign of strength, reinforcing the foundation of the bull market. The Russell 2000 index (IWM) has nearly closed the gap with the Nasdaq 100 on a year-to-date basis. Portfolios that have been well diversified across market caps and sectors should be enjoying outsized gains as this rotation takes place. Stockcharts Continue reading →

J Studios/DigitalVision via Getty ImagesBy Chris Turner Does Donald Trump really want a weaker dollar? Q: Why is the issue of weak dollar policy back in the headlines now? A: Bloomberg Businessweek published an interview with Donald Trump on 16 July. His opening gambit focused on problems in the US manufacturing sector and the ‘big currency problem’ that the US faces today. He singled out USD/JPY and USD/CNY, focusing on the unfair competitive advantage that a company like Komatsu has over Caterpillar. These comments and his choice of JD Vance as running mate point to the focus on key mid-western swing states – with a heavy manufacturing presence – in the run-up to November. Q: What does a weak dollar policy actually mean? A: The US Treasury (i.e. the politicians) is in charge of FX policy and can express its views on the dollar through key G7 & G20 Communiques. Over the years, the language in those has settled on the need for flexible exchange rates which reflect underlying fundamentals and the need to avoid competitive devaluations. US Treasury Secretaries can be asked their views on dollar/dollar policy and were Donald Trump to win in November, the choice of any potential Treasury Secretary will be important for markets. So you might have, for instance, Jamie Dimon, who’s unlikely to seek a weaker dollar, versus Robert Lighthizer who’s seen as very protectionist and who could pursue a weaker dollar policy. Q: What other tools does the US Treasury have to impact FX markets? A: In theory, the US Treasury could intervene to sell dollars and buy unlimited FX, but that seems very unlikely. More in focus will be the use of UST’s semi-annual FX report to label China a currency manipulator and threaten/extend tariffs should China weaken its currency any further. That is what UST did in August 2019 when China gave into market pressure and allowed USD/CNY to trade higher. The chart below shows that the manipulator tag did not make much difference to FX markets, although likely created more space for US tariffs. USD/JPY is different. Tokyo wants a lower USD/JPY and is currently intervening to achieve it. The US will not be seeking particular tariffs for Tokyo over its FX rate/policy. But USD/JPY will probably be at the forefront of any adjustment were the weak dollar policy theme to gain traction. USD/CNY versus the broad dollar trend Source: Refinitiv, ING The macro context is key Q: Should we distinguish between Donald Trump wanting a stronger CNY/JPY and wanting a broadly weaker dollar? A: Yes. Mr Trump’s focus is on the competitive advantages enjoyed by China and Japan from weak currencies. During his last Presidency, he avoided going near a weak dollar policy. Assuming he has sensible people at the US Treasury, the risk of a weak dollar policy destabilising US Treasuries, driving borrowing costs up and equities lower, would likely discourage the UST from actively pushing for such an FX policy. Q: Will US Treasury FX policy make much of a difference anyway? A: The macro context will be key. Were Mr Trump to win the Presidency and Congress and then extend tax cuts while broadly raising protectionism to a new level, then this would be a dollar-positive policy mix. And the ongoing threats against the alleged undervalued renminbi (while still present) would not have much impact on the FX market. Should the economy weaken for whatever reason, the pressure to seek more stimulus through a weaker dollar will grow. In reality, a newly-elected Trump cannot try to suppress China (= less CNY demand), create four years of unprecedented US prosperity (= stronger USD), and really expect USD/CNY to trade lower. Q: If UST did try to push a weak dollar policy, how far could the dollar fall? A: We have models that try to gauge ‘risk premia’ in pairs like EUR/USD. For example, how far could EUR/USD trade away from levels suggested by short-dated rate spreads, yield curves and global equity markets – inputs which normally work quite well in determining short-term pricing. Our chart below shows that over the last 10 years, EUR/USD has traded +/- 5-6% around its short-term fair value, which could be a way to isolate/evaluate the impact of any weak dollar policy from the UST. EUR/USD deviation from Financial Fair Value Source: ING Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user’s means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Original Post Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks. Continue reading →

The US economy grew at a faster than expected pace in the second quarter.The Bureau of Economic Analysis’s advance estimate of first quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 2.8% during the period, well above the 2% growth expected by economists surveyed by Bloomberg. The reading came in higher than first quarter GDP, which was revised down to 1.4%.Meanwhile, the “core” Personal Consumption Expenditures index, which excludes the volatile food and energy categories, grew by 2.9% in the first quarter, above estimates of 2.7% but significantly lower than 3.7% gain in the prior quarter.The data’s release comes as investors try to gauge when the Federal Reserve will start cutting interest rates and if the central bank can achieve a soft landing, where inflation comes down to its 2% target without a significant economic downturn.Entering Thursday, markets had priced in a 100% chance the Fed would cut rates by the end of its September meeting.”The data today will reinforce the notion that the Fed has the benefit of time,” Renaissance Macro head of economic research Neil Dutta wrote in a note following Thursday’s release. “In the Fed’s mind, there is no need to rush with private domestic demand growing at a solid pace over the second quarter. July remains a set up meeting for September.”Soccer Football – FIFA World Cup Qatar 2022 – Group B – Iran v United States – Al Thumama Stadium, Doha, Qatar – November 29, 2022 Fans display a United States flag in the stands before the match REUTERS/Fabrizio Bensch (REUTERS / Reuters)Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.Click here for in-depth analysis of the latest stock market news and events moving stock pricesRead the latest financial and business news from Yahoo Finance Continue reading →

(Bloomberg) — The assumptions that have driven this year’s global financial markets are being rapidly rethought.Most Read from BloombergIn bond and currency markets, investors are racing to redeploy money amid mounting doubt over the outlook for the US economy, which has led to speculation that the Federal Reserve may need to cut interest rates faster or deeper than planned. Helping to drive the shift: A weakening American consumer, which is showing up in a rash of disappointing corporate earnings.At the same time, stockholders have suddenly grown skeptical that technology companies’ massive investments in artificial intelligence will pay off any time soon. As a result, investors have been frantically dumping shares of big winners such as Nvidia Corp. and Broadcom Inc.Copper and other industrial metals are also reversing a recent run-up, with China’s slowdown playing a role in their decline along with the worries over the US and tech.“It does seem that an unwinding has begun of popular trades that brought valuations to stupid levels,” Louis-Vincent Gave, chief executive officer of Gavekal Research, wrote in a note to clients Thursday.At Apollo Global Management, chief economist Torsten Slok told clients on Thursday that “if the economy starts slowing down, the speed of the slowdown becomes essential. A faster slowdown would have negative implications for earnings and increase the probability of a selloff in stock markets and credit markets.”Here’s a look at some of the notable market moves and the underlying assumptions that have changed:Government BondsIn the bond market, this bleaker global growth outlook is bolstering wagers on rate cuts. Investors are snapping up short-dated securities amid concern monetary policy is proving too tight, acting before borrowing costs come down.At one point on Thursday, the yield on the two-year US Treasury note traded just 12 basis points above the 10-year — the closest the market has come to ending an inversion in place since the middle of 2022, and a far cry from a spread of more than 50 basis points a month ago.While the chances of rate cut by the Fed at next week’s meeting look very slim, the market is now pricing in deeper cuts later this year.Traders see about 30 basis points of easing by September, suggesting about a 20% chance of a supersized cut. More than 70 basis points of cuts are seen through 2024, seven basis points more than on Wednesday.The repricing is also bolstering the yen, one of the biggest victims of tighter monetary policy in the US over the past two years. The Japanese currency has rallied around 6% from a low touched earlier this month, by far the biggest advance across the Group-of-10 peers.Investors have liked to borrow in the low-yielding yen to fund investments in higher yielders such as Mexico’s peso or the Australian and New Zealand dollars, but now reckon change is underway with the gap between the Bank of Japan’s benchmark and its counterparts set to narrow.Stock marketsUS and European equity markets have been driven this year by a consensus that inflation was coming under control, allowing the Fed to ease monetary policy later in the year and thus avoid a recession.By mid-May, the Stoxx Europe 600 Index was sitting at a record, giving investors a 12% return to date in 2024. The S&P 500 set a record as recently as July 16, with tech leading the charge.Now many investors are taking the view that the Fed is falling behind the curve — not only is inflation quieting, but the economy is weakening too much. China is already easing monetary policy amid a slump in the world’s Number 2 economy.Hence the predictions from some market watchers that the Fed could indeed act as soon as next week to lower borrowing costs or be forced to do more later if policymakers wait.Almost a third of S&P 500 companies have reported second-quarter results so far, and the spotlight is increasingly on the sales figures, where the slowdown in economic growth is starting to become visible. Only 43% of companies have managed to beat revenue expectations, which would be the lowest reading in five years, according to data compiled by Bloomberg Intelligence.And that AI frenzy no longer looks so positive. Investors were taken aback this week how much Google parent Alphabet Inc. is spending on the technology, with little to show for it yet in terms of revenue.The Nasdaq 100 Index has sunk almost 8% from its July 10 record, wiping $2.3 trillion off the market value of companies in the benchmark. The index is still up 13% this year, and an investor survey by Bank of America Corp. this month showed that positioning in the so-called Magnificent Seven was the most crowded trade since exposure to growth stocks in October 2020.“Valuations of mega-cap tech were increasingly impossible to justify with anything but the most heroic forecast for future growth, earnings and monetary policy,” said James Athey, portfolio manager at Marlborough Group. “It’s inevitable that these kinds of extremes cannot persist.”MetalsMounting pessimism about demand and the tech industry is also infecting the metals market.Copper fell below the $9,000-a-ton threshold for the first time since early April and is down by about a fifth since reaching a record in mid-May.What’s changed there is investors who previously bought the metal on concerns of tightening supply and higher usage in data centers and other areas are shifting to fretting about rising inventories and weak conditions in the Chinese spot market.Tin and Aluminum have also fallen.What Bloomberg’s Strategists are Saying…“In the perennial tussle between fear and greed, the former has seized the upper hand as a raft of consensus positions have suffered losses this week. It all represents a collective trip to the pain cave, one of those periodic episodes when positioning is just about the only fundamental that matters as investment risk gets reduced across the board.”— Cameron Crise, macro strategistSee MLIV for more–With assistance from Sagarika Jaisinghani, Constantine Courcoulas and Mark Burton.Most Read from Bloomberg Businessweek©2024 Bloomberg L.P. Continue reading →