Wednesday, July 22, 2020

Morning Note

Asian equities (save, ironically, for China and Taiwan) were rocked overnight on news that the U.S. ordered China to close its Houston consulate within 72 hours. U.S. equity futures tanked on the news as well, but, being that traders are eyeballing other factors these days, no big deal (would've been a colossal deal for markets a year ago), at least at the moment. The Dow's up 72 points (.26%), the S&P's up .24%, Nasdaq's .27% higher, Russell 2000 is essentially flat as I type. Europe's mixed, 12 markets that we track down, 7 up.

The VIX (SP500 volatility) is up 2% at an always troubling 28.08. VXN (Nasdaq volatility) is up 1.5%. 

Oil's down 1.6%, gold's up $13 and silver continues its impressive technical breakout, up another 4% this morning. Copper's getting hammered, down nearly 2%, while ag is rallying -- save only for soybeans -- across the board this morning.

Per Sunday's video commentary, we're happy to continue to hold silver right here, whether or not this is the real deal hinges, however, on the notion that the economy is indeed in cyclical reflation mode, as opposed to something more on the lines of 70's stagflation. Most macro analysts, yours truly included, would lean toward the latter, at least at this juncture. So we'll keep our eye on our silver. 

Our silver position is up a whopping 6% this morning, with our Ag ETF in second place, up 1%.  Our core portfolio is up .29% as I type: So, again hanging in there with the overall stock market (with hugely less risk!). Working against us this morning are financials, staples, emerging markets, Asia-pac, the yen, Verizon, energy and base metals. 

Yes, this is the definition of a fragmented market. Not a bullish sign, by the way...

Look for intense volatility across most asset classes, particularly commodities (well, stocks too, per above). That is if their respective vol measures have anything to say about it: Silver VIX is up 17% this morning, gold's is up 9%, oil's is up 5%.

Great news on the economy this morning; existing home sales just experienced the largest monthly increase on record! Thing is, they're down 11.6% on a year-over-year basis. I.e., we've a long ways yet to go...

Stay tuned....

Have a great day!

P.S. I'll be on the road all day today and likely won't have anything else for you until tomorrow...

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