The proverbial Wall of Worry provided plenty of foot holds for investors this week. The major averages continued to make new highs (or hovered just below them) despite bad news and focused instead on anything that could justified higher prices. The belief that the Delta variant of the coronavirus may be peaking in the worst-hit states was enough to cheer investors. Not that the extremely contagious infection ever had much of an impact on the markets anyway. Still, the hope that Delta has peaked gave added umph to large cap growth stocks. Helping this summer’s move higher was almost $30…
Insights & Advice
Tag: precious metals
Fed feels inflation heat
This week’s Federal Open Market Committee meeting was a game changer. Fears that inflation may be rising faster than expected forced the Fed to adjust their timing on when to begin withdrawing monetary stimulus. The markets didn’t like that. It was a downside surprise that sent the U.S. dollar soaring, commodities plunging, and some equities sinking. What investors feared most at first was another “Temper Tantrum.” In 2013, and again in 2018, the Fed’s decision to withdraw monetary easing sent interest rates soaring and stocks plunging. However, it looks like this time around, the markets are taking the change in…
Market rotation continues
One day, it’s all about technology. The next day, back to commodities. And on the third, defensive plays like healthcare shine. Next week, we could see a new player lead the markets higher. The Russell 2000 Index, which is chock full of small cap stocks, has been trading back and forth, but basically going nowhere over the last month. I detected a stirring of upside momentum this week and will be watching that index closely after the Memorial Day weekend for additional follow-through. The small cap universe, (one of my picks to outperform this year) has done “okay” so far…
Gold regains its mojo
In inflationary environments, investors historically have hedged their bets by buying gold. However, this time around, the precious metal has languished as investors bought alternative investments. But times are changing. The primary alternative to buying gold has been cryptocurrencies. Bitcoin and Ethereum, two of my 2021 buy recommendations (for those with a strong stomach) have enjoyed spectacular gains in 2021. Bitcoin, at one point in May, had gained almost 100%, while Ethereum saw gains of more than 400%. In addition, other commodities held more interest than gold for most investors. In January 2021, I recommended investors focus on some specific…
Stocks soar on stronger economy
A combination of stronger economic growth, declining interest rates, and expectations that the economy will get even better pushed the U.S. stock markets to another set of record highs this week. As fears of higher bond yields continue to fade, sectors that do well under lower interest rates took off this week. Commodities in general came back in favor and even the greatest laggard of all—gold—saw some fresh demand. That’s right, the precious metal I least favored at the beginning of the year actually came to life, although it has a long way to go before recapturing its former luster….
Stocks grind higher as bond yields retreat
April is usually a good month for markets. Historically, it is one of the three best months of the year for equities. We all know what happens in May (‘sell in May and go away’) but we will worry about that later. Over in the bond market, the bond vigilantes may have started to doubt their conviction that inflation is a fait accompli and so yields must go up. This week, yields declined a bit, which gave a boost to some sectors (gold and silver, for example), while banks pulled back a little. But Friday’s Producer Price Index report for…
Stocks versus Bitcoin
There was no contest this week. Cryptocurrencies took center stage as the stock market churned, chopped and gave investors a little indigestion. Welcome to the market’s brave new world. It appeared that Bitcoin was the answer to whatever ails you. Higher interest rates, the threat of higher inflation, weaker (or stronger) dollar, no problem, just buy Bitcoin. By the end of this week, the crypto coin had chalked up a 15% gain and was trading above $52,000. Ethereum, Bitcoin’s younger cousin, was also up 10%. None of the financial market’s usual suspects—stocks, bonds, or commodities—could come close to those kinds…
Stocks regain momentum
What a difference one week makes! Stocks recouped all their losses this week, and then went on to make new highs. The outcome of President Biden’s proposed stimulus bill will determine the market’s next move. Let me set the record straight. Last week, I wrote that I expected stocks to stumble, hopefully preparing readers for a possible decline of 10-15%. That was a mistake. Instead, traders bought last week’s 3% dip, and, at this point, we are now back to square one. Well, not quite. The U.S. dollar, the Ten-Year U.S. Treasury Bond, and the price of gold have all…