Originally published at: https://peakprosperity.com/daily-digest/gold-soars-magnificent-7-stocks-tumble/
The financial markets are currently experiencing notable shifts, with significant movements in both precious metals and major stock indices. Michael Oliver from Momentum Structural Analysis, in a discussion with Chris Marcus of Arcadia Economics, highlighted the acceleration phase of a bull market for gold and silver. Oliver traced gold’s bull market back to December 2015, noting key breakout points and corrections, with a significant rally in March 2024. Silver, outperforming gold on a percentage basis since March 2024, is predicted to potentially surpass its previous high of $50. Broader economic factors, such as potential Federal Reserve rate cuts and shifts in the stock market and dollar index, are expected to further influence these metals’ prices. Oliver also speculated on possible major economic changes, including the abolition of the Federal Reserve and income taxes, and the potential for gold to become a global currency again.
In parallel, Yan Vanek, CEO of Vanek, discussed the global economy’s current state with Adam Tagger of Thoughtful Money. Despite some economic concerns, Vanek remains optimistic due to global growth and low U.S. unemployment. He emphasized the importance of diversifying equity portfolios away from overvalued mega-cap stocks and suggested considering equal-weight S&P indices or other sectors. Vanek also pointed out the U.S. government’s significant budget deficit and warned of a potential fiscal reckoning in 2025. He highlighted the positive contributions of countries like India, Brazil, and Saudi Arabia to global growth and discussed the growing use of blockchain technology, particularly Ethereum, while noting the competitive landscape in blockchain platforms.
Meanwhile, the carry trade strategy is gaining attention due to low U.S. borrowing rates. Patti Hutchins from Marketplace explained how this strategy involves borrowing money at a low interest rate in one currency and converting it into another currency with higher deposit rates to earn a profit. This practice, exemplified by Mrs. Watanabe from Tokyo in the 1980s, can have broader economic implications, such as weakening the currency being borrowed. The current concern is that low U.S. borrowing rates might lead to similar activities, potentially weakening the U.S. dollar. A weaker dollar could make U.S. exports more competitive but also make imports more expensive.
In the corporate sector, Deere & Co. announced layoffs due to an agricultural downturn. The Illinois-based manufacturer of tractors and combines is laying off 103 workers in Iowa, citing projections that large farm equipment sales will fall 20% to 25% below last year. Deere has already cut about 1,830 workers this year across various locations. The company is providing severance pay, pro-rated incentives, and job placement services to affected employees. Despite these layoffs, Deere emphasized its commitment to U.S. manufacturing, having invested $2 billion in American factories since 2019.
On a historical note, the execution of Russia’s last emperor, Tsar Nicholas II, and his family by Bolshevik secret police in 1918 remains a significant event. Research by Edvard Radzinsky and others confirmed that Lenin and Yakov Sverdlov ordered the execution to prevent the Tsar from becoming a rallying symbol for anti-Communist forces. The Bolshevik Revolution saw a disproportionate number of Jews in key roles, leading to a complex legacy and growing anti-Jewish sentiment. The murder of the Romanov family symbolized the broader Communist effort to eradicate the old social order, contrasting sharply with the relative freedoms and economic growth of the Tsarist era. In recent years, there has been a resurgence of interest in Tsar Nicholas II, with many Russians viewing his execution as a tragic and unjust crime.
In the stock market, the Nasdaq and S&P 500 experienced significant drops, with the Nasdaq down 3.65% and the S&P 500 down 2.3%, marking the worst day since 2022. The “Magnificent 7” stocks—Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla—fell 4.8% in one day and are down 10.4% from their July 10 peak. Tesla saw the largest percentage drop, falling 18%, while Nvidia experienced the largest dollar loss, shedding $208 billion in market cap in one day. Despite these declines, the percentage drops are not catastrophic, but the substantial dollar amounts involved have a significant impact on the broader market indices.
Sources
Gold and Silver Enter Acceleration Phase: Market Experts Predict Dramatic Surge
No matter which way we look at this thing, we come up with the same conclusion: we’re in the acceleration phase, and the final dramatic part is about to happen.
Source | Submitted by rhollenb
Navigating Market Extremes: Insights from Vanek CEO Yan Vanek on Global Economy, Mega Caps, and Fiscal Policy
“There are definitely some big dark clouds on the horizon, but we have global growth, we have low unemployment in the US, and the ability to generate forward momentum in the economy despite higher interest rates.”
Source | Submitted by rhollenb
The Carry Trade: How Borrowing Cheap Dollars Could Weaken the US Currency
“People are worried that what’s going to happen is that people are going to borrow that money and do Mrs. Watanabe’s trick and buy, you know, euros or yen or whatever it may be that’s going to be higher yielding and then invest in that other country.”
Source | Submitted by rhollenb
The Carry Trade Conundrum: High Returns, Hidden Risks, and Hedging Strategies
“The interesting thing about the carry trade is that if uncovered interest rate parity held, the expected return to the carry trade would be zero.”
Source | Submitted by rhollenb
John Deere Announces Layoffs Amid Agricultural Downturn, Cites Economic Challenges
“As the largest global manufacturer of agricultural equipment, John Deere, like many others in our industry, faces significant economic challenges, rising operational and manufacturing costs, and reduced customer demand,” Deere said in a statement Wednesday.
Source | Submitted by Mysterymet
Unveiling the Jewish Influence in the Bolshevik Revolution and Early Soviet Regime
“Although officially Jews have never made up more than five percent of the country’s total population, they played a highly disproportionate and probably decisive role in the infant Bolshevik regime, effectively dominating the Soviet government during its early years.”
Source | Submitted by 0007
Magnificent 7 Stocks Plummet: $1.77 Trillion Lost in 10 Days, Tesla and Nvidia Lead the Decline
The Magnificent 7 – Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla – dropped 4.8% today and are down 10.4% from their July 10 high.
Source | Submitted by rhollenb