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BMR Morning Market Musings... - BullMarketRun.com

January 5, 2017

BMR Morning Market Musings…

Gold has traded between $1,170 and $1,186 so far today…as of 11:00 am Pacific, bullion is up $18 an ounce at $1,181…Silver has jumped 13 cents to $16.53…Copper has slid 3 pennies to $2.52…Nickel, at $4.67, has added 2 cents…Crude Oil has gained 21 cents to $53.47 while the U.S. Dollar Index has plunged a full point to 101.46

While yesterday’s minutes from the Federal Reserve’s December meeting showed almost all policymakers thought the economy could grow more quickly due to fiscal stimulus under the incoming Trump administration, members “emphasized their considerable uncertainty” about future economic policy changes….

Gold has benefited this week from a U.S. Dollar Index that may have hit a temporary top around stiff resistance just below 104…improving physical demand out of Asia, particularly China, in conjunction with an apparent drying up of ETF selling should give Gold a chance to soon test important new resistance at $1,200…China’s currency also made a big jump today which has helped Gold buying there ahead of Lunar Year festivities…

“Although the wider picture hasn’t changed and U.S. growth is improving, there shouldn’t be any further significant appreciation in the dollar after the strong run of the past few months and given uncertainty about economic policy changes going forward,” Commerzbank analyst Daniel Briesemann said, adding this should be supportive for dollar-denominated Gold

Aggressive selling of Gold ETFs since early November appears to be over…holdings of the SPDR Gold Trust, the world’s largest Gold-backed exchange-traded fund, were unchanged yesterday at 813.87 tonnes after dropping about 14% since the Trump victory…

Palladium is on course for its biggest weekly gain since July after record U.S. car and truck sales for 2016 were released yesterday…the metal is off slightly at $733 as of 11:00 am Pacific, putting this week’s surge at 8.1%…Platinum has also had a great week, up nearly 8% to $970 and its highest level in a couple of months…

As we mentioned in our special New Year’s Day piece (“The Venture and Gold Entering 2017“), the extent of the thrashing that Gold took from traders following the Trump election victory should be viewed with some serious skepticism…markets, we believe, have set themselves up for disappointment in the sense that they’re anticipating too much too early in terms of economic growth…the Trump agenda of regulatory relief and broad-based corporate and individual tax cuts is the right one to fire up the American economic engine after 8 years of Obama steering a course toward socialism…however, not to mention the fact that Trump can be unpredictable, two rules of the sea also apply to the U.S. economy…

Big ships cannot stop on a dime…

Big ships do not turn very well…

“Uncertainty” is one way Gold can find its way higher…the Venture appears to be in agreement…

Goldman Sachs Ups Target For U.S. 10-Year Yield

Goldman Sachs raised its forecasts today for bond yields around the world in the coming years, predicting that the global fixed income selloff has further to run as inflation and economic growth accelerate…Goldman now expects the 10-year U.S. Treasury yield to end this year at 3.0%, up from its previous call for 2.75%, as investors price in further U.S interest rate increases and an expected fiscal boost from the Trump administration…the U.S. investment bank also said it expects higher British and Japanese yields than previously anticipated, especially UK gilt yields amid the economic and financial uncertainty surrounding Brexit and increased UK bond supply…

If the U.S. and global economy performs as well as Goldman expects, the U.S. 10-year yield will rise to around 3.25% at the start of 2018 before stabilizing around 3.503.75% in 201920

The 10-year U.S. yield, considered the global benchmark long-term interest rate, was trading at 2.379% as of 11:00 am Pacific…according to Goldman’s analysts, that’s closer to their estimates of ‘fair value’ than at any time since 2013 but still on the low side…

The yield fell to a multi-decade low of 1.3210% in July last year but has been rising since, driven by a global bond market selloff as investors bet that U.S. and global inflation is coming back to life…

First Nations’ Financial Accountability

While most First Nations continue to comply with Stephen Harper’s financial transparency law that was controversial but long overdue, a National Post analysis has found the compliance rate fell after Justin Trudeau’s government dropped a key enforcement mechanism…the National Post reviewed all the filings published online by INAC for the fiscal year that ended March 31, 2016 and found that, of the approximately 580 First Nations required to file financial documents, 496 had done so as of January 2, 2017…that represents a compliance rate of about 85%…by comparison, for the previous fiscal year, when the enforcement provision was in effect, 534 bands filed their papers for a 92% compliance rate…how the money is being spent – well, that’s another story for another day…

Ottawa’s Financial Accountability

Governments are dangerous when they’re convinced they can make better decisions with your money than you can…that’s why Canadians should have been more outraged when the federal government in effect introduced a potential significant tax increase for individuals when it slashed the maximum annual tax-free savings account (TFSA) contribution limit from $10,000 to $5,500…the move certainly wasn’t part of any broad strategy to save the government money because there was none…after just 1 year in office, the Trudeau Liberals took a small federal surplus and magically turned it into a $30 billion deficit, 3 times higher than they promised in the election, driven by major increases in program spending that will undoubtedly become a long-term structural problem…if you don’t think that doesn’t affect you as an investor, think again…

Today we learned that the federal government, awash with money that grows on trees in Ottawa, is spending $500 million to celebrate Canada’s 150th birthday July 1…who doesn’t love a big birthday bash, but what’s really scandalous is that the largest share of the money – $300 million – is being delivered by “regional development agencies”, mostly to Liberal-friendly ridings, through the Canada 150 Community Infrastructure Program…the previous Conservative government created that fund to fix up public facilities and for community infrastructure, culture and recreation…it was given a $150 million budget shortly before the 2015 election…at the time, Liberal MPs called the program a “slush fund” because cheques were quickly handed out before the fall campaign (the accusation was apparently correct)…however, the Trudeau government’s first budget doubled the program’s size…

The Canada 150 Fund, run by Canadian Heritage, is spending $180 million on projects ranging from small and local to national cross-country tours…in just one specific example of how Canada 150 has essentially become a scam on Canadian taxpayers, the Globe and Mail reported today that Vox Pop Labs was awarded $576,500 to create a website called “Project Tessera” to offer Canadians a chance to “reflect on and develop meaningful associations with the myriad interpretations of being Canadian,” said Vox Pop CEO Clifton van der Linden, a PhD candidate in political science at the University of Toronto…he regularly appears (of course) on CBC News…the firm was also given a non-competitive $326,570 contract last year to create the MyDemocracy.ca website for the Liberals’ electoral reform drive…

Slush funds, government spending out of control, uncompetitive tax rates, stalled resource projects, climate change fanaticism, national defence and security issues, the list goes on…thankfully, our stock markets are performing well due to a rebound in commodity prices and historically low interest rates…but where are we headed as a nation is the real issue we should be reflecting on as Canada 150 approaches…

Fintech Investment On The Rise In Canada

Canada is underachieving on the resource side at the moment, but here’s a little bit of good news…Venture capital-backed investment in Canadian financial technology companies hit its highest level in almost 2 decades last year, even as the flow of funds into major fintech markets like the United States declined…according to PitchBook, used by the U.S.-based National Venture Capital Association, venture capital financing in Canadian fintech totaled $137.7 million (U.S.) in 2016, up more than 35% on the year…5 years ago, it was $21.8 million and in 2000 it was $7.3 million…

In Today’s Morning Musings

1. A broader-based bull market bodes well for the Venture

2. The BIG U-turn as Uranium stocks continue their uptrend…

3. Updates on 8 Venture plays on the move…

4. Investors are going to cope very well with KOPN!…

And more!

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…

6 Comments

  1. CEM has traded it’s biggest volume of the year today, someone at Scotia is a big believer picking up 470,000 shares, everything seems to be lining up.

    Comment by Danny — January 5, 2017 @ 11:39 am

  2. That’s a nice 30 degree uptrend on GGI chart, liking it Jon.

    Comment by dave — January 5, 2017 @ 1:22 pm

  3. Dave, have you heard anything re PMA? Is it still looking good for the paperwork to finish up shortly? Stock-wise, it seems to be inching up in anticipation..

    Comment by Johnz — January 5, 2017 @ 3:20 pm

  4. LIC- to resume trading at Jan 6 open. completion of the transaction is subject to a number ofconditions, including, but not limited to, exchange acceptance, there is a risk that the transaction will not be accepted or that the terms of the transaction may change substantially prior to acceptance. should this occur, a trading halt may be reimposed.

    Comment by kelly — January 5, 2017 @ 4:05 pm

  5. Hi Jon, wondering if you had your meeting with Adam from Cxo this week?

    Comment by Greg — January 5, 2017 @ 7:03 pm

  6. Interviewed Adam this afternoon by phone, Greg, went extremely well. We’ll have that together for Monday at the very latest.

    Comment by Jon - BMR — January 5, 2017 @ 7:34 pm

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