Earnings Lottery

Shareholders are are probably asking themselves every quarter how the earnings of companies in their portfolios will turn out. Whether they will beat or miss analyst expectations often seems akin to a lottery.

 

The beatings will continue until morale improves… [PT]

 

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A Worrisome Trend

If you read gold analysis much, you will come across two ideas. One, inflation so-called (rising consumer prices) is not only running much higher than the official statistic, but is about to really start skyrocketing. Two, buy gold because gold will hedge it. That is, the price of gold will go up as fast, or faster, than the price of gold.

 

CPI monthly since 1914, annualized rate of change. In recent years CPI was relatively tame despite a vast increase in the money supply. However, relative prices in the economy were massively distorted as a result of the latter – and this is driving ever larger boom-bust cycles. [PT]

 

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A Growing Gap

The first quarter of 2019 is over and done.  But before we say good riddance.  Some reflection is in order.  To this we offer two discrete metrics.  Gross domestic product and government debt.

 

US nominal GDP vs total federal debt (in millions of USD) – government debt has exceeded  total economic output for the first time in Q4 2012 and since then its relative growth trajectory has increased – and it seems the gap is set to widen further. [PT]

 

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Digital Asset Rush

The only part of our April Fools article yesterday that was not said with tongue firmly planted in cheek was the gold and silver price action (though framed it in the common dollar-centric parlance, being April Fools):

 

“Gold went down $21, while silver dropped about 1/3 of a dollar. Not quite a heavy metal brick in free fall, but close enough.”

 

Bitcoin, hourly – a sudden yen for BTC breaks out among the punters. [PT]

 

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A Gentle Nudge

The America we thought we knew – the country we learned about in grade school – vanished long ago.  In truth, it was gone well before we stepped foot in our first classroom.  But America’s myths and legends remain.

 

The Wild Bunch… where are their stetsons? Contrary to myth, cowboys rarely sported a stetson. They wore bowler hats instead. The stetson only became available in 1865 and wasn’t really considered fashionable before the turn of the century. [Myth buster PT]

 

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Maurice Jackson of Proven and Probable Interviews Jayant Bhandari

Maurice Jackson of Proven & Probable has just conducted another interview with Jayant Bhandari, who is known to long-time readers as a frequent guest author on this site.

 

Jayant Bhandari

 

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Keynesian Rot

The prices of the monetary metals rose $11 and ¢27 last week. The supply and demand fundamentals is the shortest section of this Report [ed note: we are excerpting the supply-demand section for Acting Man – readers interested in the other part of the report can find it here].

 

The eruption of Mt. St. Helens in 1980 – prior to the cataclysmic event, numerous small earth quakes and steam venting from fissures warned that something big was about to happen, even if no-one suspected the actual magnitude of the outbreak. The eruption was so powerful that a fairly large chunk of the mountain went missing in the proceedings. There are always accidents waiting to happen out there somewhere, and the modern-day fiat money system is clearly one of them. There will be warning signals before it keels over – in fact, the final cataclysm usually happens fairly quickly, while the period that leads up to it tends to be a drawn-out affair. [PT]

 

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Extrapolating The Recent Past Can Be Hazardous To Your Wealth

Those who cannot remember the past are condemned to repeat it,” remarked George Santayana over 100 years ago.  These words, as strung together in this sequence, certainly sound good.  But how to render them to actionable advice is less certain.

 

George Santayana – purveyor of eminently quotable wise words by the wagon-load, but what shall one do with them in practice? [PT]

 

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The new IGWT report for 2019 will be published at the end of May…

…and for the first time a Mandarin version will be released as well.

 

Gold compared to other financial assets – from the IGWT chart book

 

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In 6 of 10 Countries a Single Day Outperforms the Entire Week!

In the Seasonal Insights issue of 13 February 2019 I presented a study illustrating the power of intraweek effects. The article was entitled “S&P 500 Index: A Single Day Beats the Entire Week!” The result of the study: if one had been invested exclusively during a single day of the week since 2000  – namely on Tuesday – one would have outperformed a buy and hold strategy, beating the broad market.

Moreover, one would have achieved opportunity gains, as it would have been possible to invest in other profitable assets over the remaining 80% of the time.

But what is the situation on the global level? Perhaps there are intraweek profit opportunities in international markets as well.

 

Putting the 10 Largest Countries to the Intraweek Test

Today I want to examine whether intraweek effects can be detected in the stock markets of other countries as well, and what they actually look like.

For this purpose I have used the benchmark stock indexes of the ten largest countries in terms of market capitalization from the year 2000 onward.

The charts below show the average weekly patterns of the stock markets of all ten countries. The annualized performance of the stock markets of the respective countries since the turn of the millennium is depicted in black and that of individual days of the week in blue.

Daily changes are measured from close to close; thus the performance of e.g. Tuesday is the average return delivered from the close of trading on Monday until Tuesday’s close.

 

Canada: performance by days of the week, 2000 until 2/2019

 

Only two days of the week delivered a significant positive return

 

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The Week Ends with a Surprise

The weekly closing prices of the precious metals were up +$5 and +¢11. But this does not tell the full story of the trading action. Prices were dropping until Friday. More precisely, Friday 8am in New York, or 1pm in London.

 

Gold and silver – back in demand on Friday… [PT]

 

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Europe at an Important Juncture

European economic fundamentals have deteriorated rather noticeably over the past year – essentially ever since the German DAX Index topped out in January 2018. Now, European stock markets have reached an important juncture from a technical perspective. Consider the charts of the Euro-Stoxx 50 Index and the DAX shown below:

 

The Euro-Stoxx 50 Index already peaked in early November 2017, the DAX followed suit in January 2018 – such divergent peaks are a hallmark of major turning points. The recent rally has pushed European stocks back up to trendline resistance and they are now severely overbought.

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