Nothing Much On The Surface

Nothing much going on the surface of things. 

Bonds bouncing after some mild correction down in yields - except for the very short term where yields remain higher than the long end, and have been for many months (inverted yield curve).

Stocks seemed to be doing better. But nothing at all happened over the last week. Headlines had stocks up, then down. But the reality: nothing.

Gold seems correcting after a run up. Correcting after a run up hits folks who just bought. Otherwise, it's just a sink from a rise. At the end of the day: nothing.

But beneath the surface, lots going on. But since April's been able to forestall anything dramatic, let's settle for notes from one of our Brain Trust. Since three of our top folks all published within a few days, we'll just pick one for now. Maybe we'll share the others soon, if it makes sense. This source starts off with potential wild cards, then concludes with remarks about various assets. Check out the potential wild cards. One of these could create a lot of ruckus any day. Or maybe something completely different with be the trigger. But we suspect some trigger's waiting to be pulled. 

In any event, enjoy a restful weekend. If fireworks don't go off this week, they likely will pretty soon.

Here are the notes:

-   Uncertainty up a notch: Wild Cards all around: China/tensions over Taiwan; Russia/Ukraine; Middle East heating up; Domestic (and Int’l) Banking Crisis;

-   Stocks: Recessions always bearish for Stocks – Stocks still expensive – Most Indexes remain below 65-week MA – If they decline below 2022 lows, bear market next leg down will commence.

-   Stock/Copper ratio now shows resources stronger than stocks

-   Interest Rates: Increast to 4 ½ % in less than one year even more dramatic than Paul Volcker’s move from 11% to 19%.

-   To help banks, Fed has Bank Term Lending program: Will buy bond debt at par with one-year loan: Fed will temporarily absorb bank losses.

-   NB: Real Interest Rates still negative

-   Thinks Fed will begin to lower rates after next raise – Will push mortgage rates down too.

-   USD breaking down – Will fuel inflation – coincides with strong C Rise in Gold

-   Recommends buying FXE and FXF (cf Weber who sticks with UDN and Gold)

-   Resource Markets strong

-   PM M&A activity strongest in a decade

-   Stagflation would be good for Gold and Commodities (as in 1970s)

-   Gold strong > 1910 – Long-term trend Bullish > 1815

-   Silver should start outperforming Gold

-   If Copper stays above 4.25, will be very strong for Resource Sector overall.