What is happening right now is quite stunning, plus a look at gold and silver.
Food Prices The New Crypto?
January 13 (King World News) – Albert Edwards, Former Global Strategist at Société Générale: Are food prices the new crypto? While many risk assets are ‘correcting’ from Bitcoin to copper, Agric commodities are surging higher today. Unless my screen is wrong, both Wheat and Corn is up 5% today! And Soybeans up a more moderate 4%, are continuing their vertical ascent!
The risk in the equities is feeling less like Q4 2018 and more like Oct 1987. Back then I was at BoA IM. After a pause in growth in 1986 the equity market accurately predicted a robust economic rebound. A rising bond yield eventually broke the equity market- quickly and suddenly.
Gold & Silver
Fred Hickey: They move around prices in the short run, but long-term they will not affect where gold & silver are heading (decidedly higher). And when they drive prices too low, that provides opportunity. When they’re instrumental in pushing gold to overbought – that’s an opportunity too.
Commodities On A Tear
Peter Boockvar: I’m going to mention commodities again. … The CRB raw industrials index yesterday rose for the 12th day in 13 and is just a hair below the highest level since August 2014.
CRB (Commodities) Highest Since 2014!
Also, if you didn’t see the move in agriculture the past few days, corn rallied 5.1% yesterday after crop data was released and showed a 7 yr low in inventories and is up another 3.5% today. At $5.35 per bushel, it’s a level last seen in July 2013.
Corn Prices Highest Since 2013!
Soybeans at $14.35 per bushel is the highest since June 2014. They rallied 3.5% yesterday and up 1% today.
Soybean Prices Highest Since 2014!
I mention this because in a chart below, look at the relationship between the CRB index and the 10 year note yield and the 30 year bond yield over the past 5 years. I remain positive on metals, energy and agriculture stocks.
CRB vs 10 Year Yield
CRB vs 30 Year Yield
Mortgage apps jumped by almost 17% for the week ended January 8th. Purchases were higher by 8% w/o/w and 9.8% y/o/y while refi’s were higher by 20% w/o/w and 92.5% y/o/y. These are impressive numbers but as people got back to work and life after the holidays, I don’t put much stock in it. Wait until next week as the MBA doesn’t do a good job in seasonally adjusting their data.
We get another torrent of Fed speak today with Lael Brainard in particular at 1pm.
Did You Miss Kirkland Lake Gold’s 50-Fold Share Price Increase?
Kirkland Lake Gold Skyrocketed From $1 To Over $50!
Two Billionaires Bought Huge Stakes In The Next Kirkland Lake Gold!
To find out which company two billionaires bought huge stakes in what they believe will be the next Kirkland Lake Gold click here.
To listen to Alasdair Macleod discuss the takedown in the gold and silver markets and what to expect next CLICK HERE OR ON THE IMAGE BELOW.
To listen to a brand new audio interview with Doug Casey CLICK HERE OR ON THE IMAGE BELOW.
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