|Bid||0.00 x 40000|
|Ask||0.00 x 40000|
|Day's Range||25.47 - 25.52|
|52 Week Range||23.09 - 25.67|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||10.71|
|Expense Ratio (net)||0.76%|
Yesterday, the Federal Reserve released the minutes from its September 25–26 meeting. Read When Will Fed Tightening Start to Hurt the US Economy? for a summary of the Fed’s actions at the meeting and the market’s reaction to them. The meeting minutes were slightly more hawkish than expected, and they signaled that most Fed officials believe that interest rates must continue to rise.
BAML (Bank of America Merrill Lynch) conducted a survey that polled 231 global investors with $646 billion in total assets under management from October 5–11. The sell-off and concerns of peaking growth in the US might have tempted investors to shift into emerging markets (EEM). The emerging market currencies were in a free fall with many countries like Argentina, Turkey, India, Indonesia, and Brazil bearing the brunt.
Gold, Miners Have Surged on the Market Rout—What’s the Upside? The Commodity Futures Trading Commission reports the positions of major players in the futures market in its COT (Commitment of Traders) report. It’s released every Friday and shows the open interest recorded on the previous Tuesday.
Gold prices have failed to draw a bid in 2018 despite many market uncertainties, including trade war tensions, the emerging market (EEM) currency crisis, and other geopolitical concerns. Year-to-date, gold prices have fallen 6.4%, and they’re currently down 9.6% from their April peak. The SPDR Gold Shares ETF (GLD), a proxy for physical gold’s price, rose 2.6% yesterday, bringing gold’s gains in the last three days to ~3.0%.
Does the Sell-Off Imply Market Repositioning for Lower Growth? One of the major market worries at the core of the current market sell-off is the coming earnings deceleration. The stock market rally in 2018 has been fueled in part by the tax reform windfall.
The Dow Jones Industrial Average Index (DIA) tumbled more than 800 points yesterday as Treasury yields (TLT) (AGG) continued their upward march. Rising bond yields and signs of firming inflation have spooked investors. Investors worry that because the era of near-zero rates has ended, companies’ margins might get squeezed.
The budget balance is the difference between what a country’s government garners from taxes and other sources and what it spends. A budget deficit occurs when spending exceeds earnings. In such a situation, the government borrows money from its citizens as well as foreign entities. As this debt accumulates, it’s possible that the value of its currency could decrease. The US (SPY) (VTI) budget deficit is creeping up.
As we discussed previously in this series, the SPDR Gold Trust ETF (GLD) has fallen ~9.0% year-to-date and ~12.0% from its April peak. While gold prices have generally disappointed in 2018, there are many reasons to believe that this could be about to change and gold might be in the process of bottoming out. As we have discussed previously in the series, this buying is expected to continue going forward and with greater vigor, which should support gold prices.
The trade balance is the difference between a country’s monetary value of exports and imports. A positive balance is known as a trade surplus where exports are greater than imports. A negative balance is known as a trade deficit.
Central banks have been net buyers of gold (SGOL) since the beginning of the financial crisis of 2008. According to Atsuko Whitehouse at BullionVault, “Central banks are buying gold for their reserves at the fastest pace in 6 years.” Macquarie reports that a total of 264 tons have been added to the official-sector gold holdings in the first nine months of the year. As usual, the central banks of Russia (RSX), Turkey, and Kazakhstan were leading the pack.
Gold prices dropped for the sixth straight month in September, which is gold’s longest monthly losing streak since January 1997. Year-to-date, gold prices are down by 9%, and they are down 12% from their April peak. Gold’s price decline is especially puzzling given the presence of many factors that would have usually supported its safe-haven appeal and thus its price.
The robust U.S. dollar has weighed on gold since May, and in August the U.S. Dollar Index (DXY)1 again reached new yearly highs. U.S. dollar strength was mainly due to emerging markets (EM) currencies that weakened in response to a currency crisis in Turkey. President Trump tweeted that he would increase steel and aluminum tariffs and impose sanctions against two officials in an effort to gain the release of a U.S. pastor detained in Turkey.
Cryptocurrency IPOs Getting Nervous Could the latest round of crypto-volatility be tied to potential IPOs fighting to levitate the market in the face of falling speculative interest? Could be. Bitcoin Cash (BCH-USD) for one is up 26% on the day, blowing past Bitcoin (BTC-USD). Bitcoin Cash happens to be one of the main coins that […] The post Market Morning: Bitcoin Nerves, Dollar Surges, Amazon Go’s, Gas Prices Woes appeared first on Market Exclusive.
As widely expected, the Federal Reserve increased the interest rate (TLT) yesterday by 25 basis points to 2%–2.25%. It’s the third rate hike this year and the eighth since the Fed started raising rates in December 2015. It began its quantitative easing process and ended its near-zero interest rate policy after the Great Recession ended to encourage more borrowing and boost the economy.
In Why the Bottom for Gold Could Be Close, we highlighted how gold prices have been weakening since April but why the bottom could be close. Year-to-date (or YTD), the SPDR Gold Shares (GLD) has declined 8.2% as of September 24. Gold’s weakness in 2018 could be mainly attributed to the US dollar’s (UUP) strength and the higher interest rate outlook (TLT).
The Fed has addressed trade disputes on many occasions. In the Fed’s latest policy minutes, the committee sounded concerned about ongoing trade disputes and the possibility of the disputes escalating. According to the meeting minutes, most Fed members “expressed the view that an escalation in international trade disputes was a potentially consequential downside risk for real activity.” The Fed was also concerned about how the uncertainty regarding trade policy led to a reduction and delays in business investment spending while putting pressure on input prices.
Asia Up, Treasuries Flirt with Bear Market Hong Kong and China are up strongly today, with Hong Kong’s Hang Seng up 6.1% since bottoming earlier this month. China is in a similar situation, wiggling around and teasing a new uptrend, but both could fall especially now that the trade war between the United States and […] The post Market Morning: Treasury Bear, Fed Fuss, Square FANGAS, And Dunkin’ Not Donuts appeared first on Market Exclusive.