In today’s briefing:
- What the Surge in Gold Tells Us About the Stock Market
- Trump Raises the Ante on Tariffs as Treasury and Fed Start New Relationship Under Secretary Bessent
- Will the Real Stock Market Please Stand Up?
- Due February 28 – U.S. January Personal Income and Spending
What the Surge in Gold Tells Us About the Stock Market
- The gold bull is just starting, with strong upside potential in the coming investment cycle.
- The market is undergoing a regime shift. Gold will be useful to hedge against bond weakness in the coming cycle, which will see small-caps dominate large-caps and value dominate growth.
- Gold mining stocks present a long-term opportunity, but may be vulnerable to a short-term setback.
Trump Raises the Ante on Tariffs as Treasury and Fed Start New Relationship Under Secretary Bessent
- The prospects for wider trade wars have risen given the announcements by the Trump administration of reciprocal tariffs and a blanket tariff on steel and aluminium.
- Treasury Secretary Bessent has announced his desire to reduce the US interest term structure across all maturities instead of focusing on short-term interest rates. Less profligate fiscal policy will help.
- President Trump is committed to a strong dollar policy. Secretary Bessent believes China will be forced to absorb the impact of tariffs via lower export selling prices and profit margins.
Will the Real Stock Market Please Stand Up?
- Even as the S&P 500 tests overhead resistance at its all-time high, we are seeing negative divergences everywhere.
- We interpret this as a market poised for a corrective pullback.
- The most likely bearish catalyst is a negative reaction to a Trump trade war announcement.
Due February 28 – U.S. January Personal Income and Spending
- We expect a 0.3% rise in January’s core PCE price index, slower than the 0.4% seen from core CPI, while we expect a modest 0.3% rise in personal income.
- Core CPI rose by 0.446% before rounding in January, but the components of PPI that contribute to core.
- PCE prices were mostly subdued and core PCE prices usually underperform core CPI. Overall CPI rose by 0.5% but before rounding was similar to the core at 0.467%.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
