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TSX Venture Exchange And Overall Markets

The Venture continues to consolidate and declined 13 points or 1.6% last week, its worst weekly performance since August 22–26.  However, investors may be surprised to know that for the month of September so far, the Venture leads all the broader markets with a gain of 1.7%.  The TSX is off 1% through the first half of this month, the Dow has fallen 1.5% while the NASDAQ is up just a fraction.

This continued outperformance by the Venture, against not only other equity markets but Gold and Oil as well, is a very positive sign (consistent with a Venture bull market) and confirms in our view that the Index is merely going through a temporary consolidation phase prior to another major push to the upside.

To the peddlers of fear, if stocks in general were about to “crash” there’s no way the Venture – the most speculative market in the world and a reliable leading indicator – would be outpacing the broader indices and even Gold at the moment.  Not a chance.

Keep in mind, in each and every bull market year going back to 2003, the Venture has climbed powerfully from its August close to year-end.  The average gain is nearly 30% which means it’s not unreasonable to expect the Venture to find its way to 1000 by the close of 2016.  That’s 25% higher than where it is now, and in that kind of environment there are countless stocks that will perform exceedingly well.

Don’t be fooled by Fed bafflegab or the mainstream media’s obsession with the possibility of the central bank hiking rates next week or later this year for just the 2nd time in more than a decade – not only is that possibility highly remote in our view, but there’s no need to even fear another hike in the context of the current cycle.  Remember, the initial one last December got this amazing Gold and Venture bull market started (Ma Yellen, please give us another hike as soon as possible!).

The coming week features central bank meetings in both the U.S. and Japan.  It’ll be “business as usual” at those gatherings, and you know what that means based on how markets have traded this year.

Click here to read the rest of today’s Week In Review And A Look Ahead, and learn more about where the Venture is headed in the coming weeks, with a risk-free Pro, Gold or Basic subscription featuring a 100% money-back guarantee, or login with your username and password.

Gold has traded between $1,306 and $1,317 so far today…as of 9:30 am Pacific, bullion is down $6 an ounce at $1,308…Silver is off 18 cents at $18.77…Copper has slipped a penny to $2.15…Crude Oil has fallen 82 cents a barrel to $43.09 while the U.S. Dollar Index has surged three-quarters of a point to 96.01 (strong band of resistance between 96 and 97)…

According to calculations by analysts from Commerzbank, August Gold imports into India fell 81% compared to last year while imports during the first 8 months of the year were down by 300 tonnes. “It would not be appropriate to blame only the numerous restrictions imposed by the government, either, as these were already in place last year. Clearly buyers are price-sensitive and not willing to pay the sharply risen Gold prices. Although we are confident that imports will soon recover again thanks to the wedding and festival season in India, the Gold price will also lack support from this side in the near future,” they conclude…

CPI Increase Boosts Dollar

U.S. consumer prices increased more than expected in August, causing the dollar to firm this morning (won’t last) which in turn has put some mild pressure on Gold…rising rents and healthcare costs offset a drop in gasoline prices last month with the CPI jumping 0.2% after being unchanged in July…in the 12 months through August, the CPI increased 1.1% after advancing 0.8% in July…the so-called core CPI, which strips out food and energy costs, rose 0.3% last month, the biggest increase since February…overall, however, U.S. inflationary pressures remain rather muted, and the slew of economic data that was released this week strongly suggests the Fed won’t be hiking interest rates at its meeting next week…that leaves December as the Fed’s best “window” (at the moment) for raising rates, but November’s election results – not to mention other factors – could very easily close that window…at that point the Fed will have a really serious problem on it hands…

U.S. consumer sentiment (preliminary), reported by the University of Michigan after the Labor Department’s CPI this morning, came in at 89.8 in September, the same as August and shy of the consensus estimate of 90.8…

Mexican Peso Hits New Low, Loonie Drops To 200-day SMA

This is good news if you’re headed to Mexico on vacation – the battered peso hit a new record low this morning, weakening by more than 1% to reach 19.6235 pesos to the dollar…that surpasses the previous record low on June 24, the day after the United Kingdom voted to leave the European Union…

Meanwhile, the Canadian dollar is also weak this morning, touching its rising 200-day moving average at 75.5 cents for the first time since breaking out above that SMA early this year…

Oil Update

Further to Daniel’s piece the other day in Daniel’s Den, Oil discoveries have fallen to the lowest level since 1952 and the global economy is becoming dangerously reliant on Crude supply from political hotspots, the world’s energy watchdog has warned…that means there are more upside risks to Oil prices than most people appreciate…

Annual investment in Oil and Gas projects has crashed from $780 billion to $450 billion U.S. over the last 2 years in an unprecedented collapse, and there is no sign yet of a recovery next year…

The International Energy Agency said wells are depleting at an average rate of 9% annually…drillers are not finding enough Oil to replace these barrels, laying the foundation for an Oil price spike and raising serious questions about energy security…

“There is evidence that cuts in exploration activities have already resulted in a dramatic decline in new Oil discoveries, dropping to levels not seen in the last 60 years,” said the IEA’s World Energy Investment 2016 report…

The drop is so drastic that the effects are likely to overwhelm slow gains from fuel efficiency and the switch to electric cars, at least for the rest of this decade…

Furthermore, the IEA said global spare capacity is wafer thin at just 1.7 million barrels a day (b/d), stripping out idle capacity in war-torn Libya, Iraq, and Nigeria…this implies that the market will swing from glut to scarcity with lightning speed once the energy cycle turns…

In Today’s Morning Musings…

1. How this stock is gearing up for one of its typical upside moves (at least 50%)…

2. Great value in Orex Exploration (OX, TSX-V), especially after financing and management shuffle…

3. Gold update – dollar bulls have it wrong (again)…

4. Daniel’s Den – Part 2 from Day 1 at the Precious Metals Summit in Colorado…

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…

Gold has traded between $1,309 and $1,329 so far today…as of 10:00 am Pacific, bullion is down $7 an ounce at $1,316…Silver is up 6 cents at $19.00…Copper is flat at $2.15 after a big jump yesterday…Crude Oil has added 50 cents to $44.08 while the U.S. Dollar Index is flat at 95.33…

More disappointing economic data out of the U.S. today (retail sales, industrial production), but the Gold market took a minor hit after an unexpectedly sharp improvement in the Philadelphia Fed business survey for September…the general business index that covers the factory sector showed a gain of 12.8 in September from 2.0 in August (the reading was –2.9 in July)…this report fits into the narrative of U.S. monetary policy hawks who want to see an interest rate rise sooner rather than later…good luck, it won’t happen!…

U.S. retail sales, key to overall economic growth, were disappointing last month, falling 0.3% amid weak purchases of automobiles and a range of other goods…this points to cooling domestic demand that will no doubt play a factor in the Fed almost certainly holding off of an interest rate hike next week…core retail sales are up just 2.8% year-over-year, the slowest pace of gains since March…to put this level into perspective, the 5-year average is 3.5%…the average seen in the mid 2000’s mortgage equity withdrawal bubble was 5.4% and the late 1990’s average was 5.6%…

Meanwhile, industrial production fell more than expected in August, hurt in part by a sharp decline in utilities output, according to data from the Federal Reserve…the industrial sector measured by the central bank comprises manufacturing, mining, and electric and gas utilities…there were some positive signs for the hard-hit energy sector, however, with mining output rising 1.0%, it’s 4th consecutive monthly increase…

Washington Gridlock Hurting Economy

Americans blame political gridlock in Washington for the country’s declining economic competitiveness and hold both Democrats and Republicans responsible, a Harvard Business School study released yesterday found…

The study noted that U.S. GDP grew at a rate of only about 2% since 2000, well below the 3 to 4% average in the prior half-century…it said a range of factors including a complicated corporate tax code, tangled immigration system and aging roads have contributed to the slow growth…

The study contends that factors including a growing wealth gap, declines in productivity growth and a rise in the number of working-age people neither employed nor seeking jobs show that the U.S. economy is becoming less competitive…

A majority of the school’s alumni surveyed said they believed the U.S. political system was hurting the economy…that view crossed party lines, with 82% of Republicans, 74% of independents and 56% of Democrats agreeing…

Tightening U.S. Election – Gold’s “Trump” Card

“Groupthink mentality” still assumes Hillary Clinton is going to coast to victory in the November Presidential election, but polls released over the past few days show Clinton losing to Donald Trump in several key swing states in a trend will set off alarm bells for Democrats and the liberal mainstream media…these new polls, from several different outlets, show Trump ahead in some states where he hasn’t led any polls in months (Ohio, for example), and some are the best general election poll results Trump has ever gotten…the market (and the world) likely won’t start paying serious attention to the election until after the first debate in 11 days (September 26)…expect Gold to firm up considerably on a growing perception that Trump could win…

More Powers To First Nations?

The National Post reported last night that Defence Minister Harjit Sajjan is considering a request to give First Nations the power to directly call in the military when their treaty, environmental and other rights are threatened…Ron Swain, vice-chief with the Congress of Aboriginal Peoples, told Sajjan during consultations with indigenous groups yesterday that aboriginal communities deserve the same rights as provincial governments, which have the authority under the National Defence Act to call in the military to fight civil unrest and during other crises…

“We believe, in protecting our sovereign territory and our issues around environmental concerns, we should be able to trigger the same response and have our Armed Forces defending our treaties and our territories,” Swain said during a break in the closed-door meeting in Winnipeg that included about a dozen aboriginal leaders and academics…give us your thoughts on this issue in our comments section…

In Today’s Morning Musings…

1. Fresh funds ($1.5 million) and a new CEO and Chairman (PDAC President takes the helm!) bode well for Orex Exploration (OX, TSX-V) and its 730,000-ounce Goldboro Gold Project in Nova Scotia…

2. The Snip comes back to life – Skeena Resources (SKE, TSX-V) hits high-grade intercepts in each of its first 8 drill holes adjacent to the original mine workings with widths and grades consistent with historical results at this past-producer in the Heart of Gold Camp…

3. What’s the Venture’s next move?…

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…