As we kickoff trading in the final week of April, look at what just hit an all-time record high.

Record High
April 29 (King World News) – Here is what Peter Boockvar wrote today as the world awaits the next round of monetary madness:  If you didn’t see it over the weekend, the net speculative short position in the VIX futures hit a record high. The feeling that the Fed again has medicated and immunized the markets from any and all pain is likely the thought behind the bets. Playing Dr. Feelgood time and again only plants the seeds for future financial instability but that only matters for another day. This sort of stat only matters when an extreme is reached which it has but figuring out when a higher VIX follows as these shorts are covered is always tough to say.

I’ll talk more about the Fed meeting tomorrow but on the debate with inflation, the implied inflation rate in the 10 yr TIPS is at 1.97%, only a few bps from the one year average of 2.01%, above the two year average of 1.96% and slightly above where it was on March 20th at 1.96% when the Fed last met, Jay Powell had his press conference and patience was reiterated and the plan to end QT was laid out…

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The Weakest Since 2016
April has provided no respite to the downbeat attitude with the Eurozone economies. The Economic Confidence index in the month fell to 104 from 105.6 and that was 1 pt less than expected. That’s the weakest since September 2016 with manufacturing confidence a particular soft spot, still. Consumer confidence, construction and retail also fell. Services confidence was unchanged m/o/m.

The 64k Question
European markets have rallied of late on hope that the stimulus and stabilization in some of the economic stats in China will spill over (China is Germany’s largest trading partner). That really is the $64k question. Will it or will it be somewhat landlocked in China in only helping to lift consumer spending on local things and provide some credit to small and medium sized businesses that won’t be felt outside of China. I’m not sure yet. European markets are down across the board as at least in April, there has been no spillover as per today’s data. Also, the reelection of a socialist in Spain has the IBEX stock index down by .8% as of this writing but Spanish bond yields are little changed as is the euro.

Lending growth in the Eurozone slowed in March according to ECB data. Loans to businesses rose 3.5%, a step down from 3.8% growth in February. The peak this cycle was 4.3% in September. Household loans grew by 3.2% vs 3.3% in March. Money supply growth though did pick up to a 4.5% y/o/y growth rate so we’ll see if that leads a pick up in lending growth in coming months. Either way, the cost of money is a binding constraint on NOTHING with it so cheap so lending data is really only going to go by the way of where demand goes. That said, without robust profits, banks still have to be real careful with who they lend money to. The Euro STOXX bank stock index is up .3% after last week’s almost 4% decline.

CONTRARIAN ALERT: Two Markets Everyone Hates
If there are two market regions that everyone hates, it’s European and Japanese stocks according to the Barron’s Big Money Poll. Only 3% like Japan and 6% want to buy Europe. Of course US stocks are the top pick with 39% saying it will do the best in the coming 12 months. Emerging markets are the #2 pick. With US stocks specifically, 83% are net buyers (thus only 17% are net sellers). Thus, from a contrarian standpoint, let’s look at Japanese and European stocks.

This caught the market by surprise…

Eric King:  “Ivan, you guys have had an incredible year to date, hitting a new 52 week high again today in Canada. This has all been about Sombrero and now you have stunned the market by announcing that you have drill holes pending. This came completely out of left field and caught the market by surprise.”

Ivan Bebek:  “Eric, we are off to an exciting start this year with our Sombrero project – an opportunity for a major copper gold discovery in Southern Peru. Today’s news of historic drill holes from 2013 and our ability to sample them is truly a surprise and one of the most fortuitous events that an exploration company can experience while waiting for drill permits. And yes, this caught the market totally by surprise. These will be the first ever holes sampled entirely for copper and gold on the project and it is happening 3 months ahead of when we expect to receive our first permits. So investors will not have to wait until Q4 for drill results on Sombrero. We will have them in June.

Auryn recently sampled 232 meters of 0.55% of copper equivalent (0.47% copper and 0.13 g/t gold) on surface. Michael Henrichsen, Auryn’s COO & Chief Geologist commented:

“We are looking forward to receiving the assay results of the historical drill core as it is from the well- mineralized area of Fierrazo where Auryn recently completed surface channel sampling. The results from this core will provide a critical first look at the third dimension of mineralization at the Sombrero project.”

The symbol for Auryn Resources is AUG in Canada and the NYSE.
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KWN has now released the powerful and timely audio interview with Andrew Maguire and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.

***Also just released: BUCKLE UP: Greyerz Says Swiss Refiners Confirm Supply Of Silver Is Now Extremely Tight CLICK HERE TO READ.

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