With the Dow surging, here is a look at gold, silver and restarting the global economy.
Restarting The Global Economy
April 7 (King World News) – Peter Boockvar: “So if parts of the world are past the worst of this virus spread then we’re going to hear more stories like this reported in il Corriere della Sera newspaper in Milan today. They report that May 4th “could be the date of the real restart, with caution and gradually…And so we will proceed in stages. As early as mid April, immediately after the Easter holidays, some business and trade sectors could be allowed to start working again.” Of course distance and masks will be the key part of this…
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This paper also reports that “Austria and Denmark, within hours of each other, have announced the start of the exit phase from the coronavirus emergency which in both countries will begin immediately after Easter.“
The caveat to all of this is if there is a 2nd wave, most everything shuts down again but at least we are seeing more rays of light. Parts of Asia are opening in fits and starts but there have been steps back as seen right now in Hong Kong and Singapore which have closed up again for a few weeks. While it doesn’t seem possible today, hopefully we start to see reopen plans in parts of the US begin at the end of April and which will be also “with caution and gradually.”
Gold, Silver & Stocks
As for the markets, right now the level to watch is 2800 in the S&P 500 as its about the 50% retracement of the decline from the record high and the March low. The downside captured the virus panic and economic shutdown. This rally is now pricing in containment and an eventual reopen. What is not priced in and of course still unknown is what the reopen and pace of it will look like. The best assumption right now is that the pace will be slow. There will be V bottoms in some things and not the case with many others. And to say again, we’ll have years of corporate deleveraging to come just as we did on the household side after 2008-2009. Keep your eye also on the dollar index as it comes back down to the 100 level. Gold is at a fresh 7 yr high and silver is getting its legs again.
92% Would Wear Masks
What will help in the reopening is the acceptance that wearing a mask is important. I saw this comment a few days ago from the chair of a WHO advisory panel on infectious hazards who said to the BBC that “It might be that wearing a mask is equally as effective or more effective than distancing.” As to whether wearing a mask will be accepted by our people, I saw a poll over the weekend asking whether you will wear one, of about 20,000 people responding (not a lot but something), 92% said they would.
Lowest Since 2016
The NFIB small business optimism index began to capture the economic shutdown as it fell to 96.4 from 104.5 and that’s the lowest since October 2016, the month before the election. Not surprisingly every component fell m/o/m and that decline from February is the largest on record. The NFIB said what any of us could have written: “The outbreak has left few, if any, owners unscathed. The economic impact is immense, and now, the questions are how long will it last and how quickly can the small business sector recover once on the other side.” Numbers like this are no longer market moving to the downside because we know the current situation. What we don’t know, as the NFIB states, is what the other side looks like. (See below).
Man Who Predicted Global Collapse
***Also Released: Alasdair Macleod: Comex June Gold Now Trading At $1,712 – This Could Be Disastrous For Bullion Banks, Plus Hansen On Record Deleveraging CLICK HERE.
Corrupt Bullion Banks
To hear James Turk discuss what the corrupt bullion banks are up to in the gold and silver markets and much more CLICK HERE OR ON THE IMAGE BELOW.
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