TMI Snapshots:  More Signs Of Pressure on Inflation Expectations, USD Upside, And A Silver Lining

TMI Snapshot: Update on Text-Mined Inflation Indicators & How They Line Up With the Value Rotation

Introducing TMI Data Science: Delivering Alpha With Custom NLP-Based Leading Indicators

TMI Snapshot:  Cross-Currents In The US Rental Market Hint At Pausing Inflation Expectations

Managing Director

Elan Gore

TMI Data Science

TMI Data Science utilizes Natural Language Processing to build custom leading indicators using unstructured data sourced from the global financial, trade & traditional media.  Our proprietary software, TMI Machine, is a text-mining platform designed with the buy-side & capital markets professional in mind, text-mining the global media to discern and quantify nuanced qualitative shifts in press coverage as they apply to macroeconomics, equity indexes/ETFs, commodities, currencies, fixed income & individual equities.  TMI provides custom leading indicators and systematic trading strategies, operating at the nexus of linguistics & statistics drawing on vast experience in investment banking and hedge fund settings in senior quantitative and fundamental roles.  

TMI Data Science was founded by Elan Gore, an award-winning Senior Global Basic Materials Equity Analyst & China Economist with 15 years of experience in North American hedge funds & institutional managers; and Alessandro Porrino, Ph.D., an Algorithmic Trading Analyst and Programmer with 10 years of front-office experience ranging from complex FX option pricing to auto-hedging strategies at Bank of America Merrill Lynch and Standard Chartered.  Mr. Gore holds an MBA in Finance from New York University Stern School of Business, and Mr. Porrino holds a Ph.D. in Systems Engineering from Brunel University London.

Commodities

<p>Parsing through our thematic database we find that the most recent leg up in gold, a +$200/oz move to &gt;$2000/oz in July-August, has been largely associated with the "fiscal cliff" of US benefit expiration and its potential impact on growth.  Thus, gold had been eagerly anticipating a macro-driven risk-off phase which did not materialize throughout the summer.  Unprecedented central bank balance sheet expansion drove great conviction in a secular bull market for gold on the premise that a multi-year inflationary phase has begun, but the increasing popularity of the trade may lead to conflation of short-term with long-term inflation; and as we highlighted earlier this week, we expect a downshift in short-term inflation expectations (<a href="https://www.smartkarma.com/insights/tmi-snapshot-cross-currents-in-the-us-rental-market-hint-at-pausing-inflation-expectations" target="_blank" data-smartkarma-citation="insights:43259" rel="noopener">TMI Snapshot:  Cross-Currents In The US Rental Market Hint At Pausing Inflation Expectations</a> , 9/15.) </p><p>Our text-mined indicators suggest sentiment on gold has been trending lower recently, both directly and indirectly via gold's macro drivers.  Ironically, softer short-term inflation expectations and shrinking estimates of the next phase of US stimulus are both USD-friendly, and thus potentially gold-unfriendly at this stage.</p>

Parsing through our thematic database we find that the most recent leg up in gold, a +$200/oz move to &gt;$2000/oz in July-August, has been largely associated with the "fiscal cliff" of US benefit expiration and its potential impact on growth.  Thus, gold had been eagerly anticipating a macro-driven risk-off phase which did not materialize throughout the summer.  Unprecedented central bank balance sheet expansion drove great conviction in a secular bull market for gold on the premise that a multi-year inflationary phase has begun, but the increasing popularity of the trade may lead to conflation of short-term with long-term inflation; and as we highlighted earlier this week, we expect a downshift in short-term inflation expectations (TMI Snapshot:  Cross-Currents In The US Rental Market Hint At Pausing Inflation Expectations , 9/15.) Our text-mined indicators suggest sentiment on gold has been trending lower recently, both directly and indirectly via gold's macro drivers.  Ironically, softer short-term inflation expectations and shrinking estimates of the next phase of US stimulus are both USD-friendly, and thus potentially gold-unfriendly at this stage.

TMI Indicators: Gold Sentiment Seeking Catalysts Following Latest Leg Up On US Benefit Expiration