With the Dow trying to mount a rally, the dollar trading lower and gold higher, here is a look at what is happening around the world.
A Look At What Is Happening Around The World
March 13 (King World News) – Here is what Peter Boockvar wrote today as the world awaits the next round of monetary madness: After 9 straight weeks of increases in the number of Bulls according to II, they retreated a touch this past week to 52.4 from 52.9. The number of Bears rose by .8 pts to 21.4 with a 31 pt spread between the two still pretty wide. This is a marked difference from the negative spread of 4.7 on January 2nd after the December market selloff. Bottom line as stated the last few weeks, from strictly a contrarian standpoint, the wide spread between bulls and bears is no longer a help to the market. Yesterday the S&P 500 closed at 2792. Three weeks ago Friday when the spread got stretched again we closed at 2793.
The dip in the average 30 yr mortgage rate to 4.64%, the lowest since February 2018, helped to boost purchases according to the MBA. They grew by 4.3% w/o/w but are still only up by 1.7% y/o/y. Thus at least right now, we really haven’t seen much of a bounce in home buying in response to the drop in mortgage rates. Refi’s didn’t budge, falling by .2% w/o/w and are down 4.4% y/o/y as comparison’s are really easy…
Mining legend Ross Beaty (Chairman Pan American Silver) is investing in a company very few people know about. To find out which company CLICK HERE OR ON THE IMAGE BELOW.
The industrial powerhouse that is Japan remains under economic pressure. The always volatile core machinery orders in January fell 5.4% m/o/m, well worse than the estimate of a decline of 1.5% and follows a .1% drop in December. This marks the 4th month in the past 5 of declines. While this number certainly bounces around month to month by a lot, it still is a key capital spending data point. The Nikkei didn’t like it and fell 1% overnight and the 10 yr JGB yield got further negative by 1.4 bps to -.042% and is now the most negative since November 2016. The yen is little changed. China’s stock market took a breather too.
Policy wise in Japan, will they raise again the VAT as planned this October in the face of the economic weakness? Will Kuroda ease again (I mean tighten because that’s what it’s now doing) in response to the slowdown?
Meanwhile, In Europe
We’ve seen a bunch of regional industrial production figures over the past week in Europe that came in better than expected, particularly from France, Italy and Spain and today’s full EU figure confirms that with a 1.4% m/o/m gain, 4 tenths more than expected. Let’s hope this is more than a temporary stabilization but on a y/o/y basis, its still lower for a 3rd straight month. As the slight beat was not a surprise after the country surveys seen, the euro is little changed with a modest move up in bond yields and a mixed stock market regionally. We’re going to have to assume that the best the European economy will give us this year is about 1% growth.
The pound is really hanging in there, rallying back above $1.31. So May didn’t get her vote but now we’re most likely going to see an extension of the Article 50 deadline with a vote possibly tomorrow. Thus, the market still believes there will be no hard leave regardless of how messy this process is. Gilt yields are also rising to a one week high.
As you know I’ve been screaming from the roof tops for a while that the negative interest policy of the ECB was greatly damaging the profitability of the European banks. I finally have some company today as the chief economist of Deutsche Bank is saying the ECB is the problem. I don’t have the report though and am getting color from Bloomberg News who is reporting “The ECB’s policy of negative rates has created a ‘smell of panic’ that has eroded confidence among investors and savers while penalizing European banks by about 8b euro per year, according to the note.” Remember, the Euro STOXX bank stock index is down 40% since June 2014 when rates first went negative.
King World News note: We have the dollar trading lower and gold moving higher today, but the reality is the gold market needs to breach $1,340 to gain attention short-term. The good news is that is only a stone’s throw away.
K92 Hits All-Time High As Plans To Double Gold Production Announced
John Lewins, K92 Chief Executive Officer, stated: “I am extremely pleased to report that today, the Company is formally announcing that it has committed to the expansion of the Kainantu Gold Mine. This expansion will double plant and mining capacity and increase production to an average of over 120,000 ozs AuEq per annum over the next 13 years, with potentially more to come as we ramp up our exploration efforts.
This decision follows the completion of the PEA in January, which showed a robust project capable of producing almost 650,000 ozs Au and 10,000 tonnes of copper over the next five years and over 1.3 million ozs and 60,000 tonnes of copper over a 13-year life. With cash costs of only $429/oz AuEq and AISC of $615/oz AuEq.
The Company sees this expansion as another step in developing the Kainantu Gold Mine into a world class operation with costs potentially in the lowest quartile. The Company is committed to a major program of exploration with three diamond drill rigs operating underground and major development focused on expanding the Kora/Kora North resource with a target of 5 million ozs by the end of 2019. With the Kora deposit open along strike and at depth, this target is considered realistic with the current 2019 drilling program scheduled to double the number of metres drilled underground to 20,000 from less than 10,000 in 2018.
The Company has already spent almost US$3 million on mobile plant, fixed plant and the camp in Q1 2019, all of which is part of the initial capital expenditure required for the expansion. The Company will continue to fund expansion capital and sustaining capital from cash flow from production. However, it is anticipated that negotiations on a possible debt financing will be completed by the end of Q1 2019 to ensure that the timeframe for the expansion is met.
This ability to restart operations at Kainantu, move to profitable operations and then initiate a significant expansion of production in just over two years has been made possible in no small part by the support and assistance of the PNG Mineral Resources Authority (“MRA”), the Office of the Mining Minister and all levels of Government in PNG. Most important, however, has been the support of our Local Landowners for the operation; they are not only some of our most important stakeholders, but also make up the largest group of employees and are partners in many aspects of the operation.
We look forward to working with all of the stakeholders in the Kainantu Gold Mine to successfully complete this stage of development and move forward to the next.”
***Also just released: One Of The Greats In The Business Just Warned “Gold & Copper Are Going To Reach New Levels That We Haven’t Seen Before” CLICK HERE TO READ.
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